Monetization, Virtual Goods, iPhone → Tapulous Pirates
Virtual Goods News reports that:
Over the weekend Tapulous head of business development Tim O’ Brien announced that the company was successfully monetizing pirated copies of its iPhone game Tap Tap Revenge 3 by selling the pirates virtual goods as in-app purchases. Tapulous estimates that Tap Tap Revenge 3 has been downloaded 2.5 million times, but that 1 million of those downloads are pirated copies.
Ok, first of all, if you’re pirating a $.99 game, that’s pathetic and you are a loser. Full stop.
But, it’s nice to see that you can upsell pirates with virtual goods. 
Pirated copies can still communicate with the Tapulous network and their in-game virtual item shops still work. According to O’Brien, this has lead to some pirate users spending far more than the app’s initial cost on virtual items like additional songs and avatar customization pieces.
So, what if–for non-pirates–you offer the app/game for $.99 (or more, if it’s not on iPhone), and then if the potential customer balks and decides not to buy, you could then offer to give them the game for free?
At least then you have a chance to monetize them later in the cycle. Pirates would have nothing to pirate, and chances are you would end up making more money in the long run even if you give away a majority of copies. (I’m assuming, too, that there’s no physical COGs and it’s exclusively digital delivery.) It sounds like a decent idea and a great experiment to try.
(P.S. My time is being consumed with a non-game business venture right now, but I want to try to blog short little ones like this to keep myself in touch with my most beloved game development universe.)