I find there is a strange mindset with the App store. Like on steam for example, if I see a game for $5 I think wow that is so cheap, I better get that. But on the app store, its like really expensive, even if it is the same game. I have nothing to back this mindset up other than general feeling and talking to others. I also think the mindset if different with in-app-purchases, once people have been playing a game for awhile, getting 50 gems for $5 bucks seems more justified, in my mind anyway. Not really sure why this is, I guess there is a lot less risk involved, because you totally know what you are getting. That is why I am trying to go with the model of making it free, but selling level packs.
I have to say that I've never seen a good free to play game with in app purchases, especially when in app purchases is not a pack of levels to explore and play (like in Angry Birds) but when in app purchases are in game currency, abilities, items etc - those games always have a design being corrupt at its core, they are always unfair to the player, and i would render them unethical, like advertisement to children for example.
What are you describing is a classic Zynga model. For example, we are doing freemium games with over 2 million MAU and no one is actually hating us for being freemium. We're not pushing anyone, you can play whole game without a penny and still have fun. We have ingame premium currency which allows you to buy content, speedups or boosts, however all those things are also available with standard ingame materials. You are basically buying time in our games, that's all.
