Whenever we turn to download any app or game, the first question we think that whether it is available for free or not. In recent years, the number of free-to-play video games and apps has increased exponentially. Not only on mobile platforms, but many big gaming studios offer their popular titles for free on gaming consoles and PCs. However, this question leaves us all in a wonder that if service providers are offering their games for free then, how they are making money.
Before we head towards our title topic, it is important to understand that the revenue from free apps and games has the role of more than 80% in the total revenue. Users always go for free games and that is the first step for the developers to make a real profit. Here, we are going to discuss how free games obtain real profit.
How Free Games Make Money?
Free games are the first choice of the users whether they play on mobile phones, PC, or consoles like Xbox or PlayStation. You might have noticed that the number of downloads of free games is much higher than the paid games. How do they provide free games and how do they make a real profit through them?
This is one of the main sources of income for free games. You might have noticed that most free games or free apps run ads. Developers make a lot of money through advertising. They use a third-party advertising network for this process. This is quite a simple and easiest way to monetize free games. The developers just have to display the ads on their gaming apps, and they get paid.
The payment can vary according to the number of ads displayed on the game and the number of active users. However, some ads generate revenue for the developers when their users click on the ads or do the action asked in the ads.
Attracting Users to Their Paid Games
Many gaming studios offer free games for trials or demo so that users can get acquainted with how games work. Once they get familiar with the game, they can opt for the paid version of the game or play that game with real money. Online casinos are a great example here. Several reputed online casinos provide free demo games, you should take advantage of the free online slots are offered by the casinos where new users can play the games without wagering real money. When they like the gameplay in free versions, they would obviously go for the real money version.
This way game providers convert the free players to premium members. Some free games come with a month of a free trial or 15 days of a free trial. This is the way to invite the players to test the games. And developers generate real profit when users buy the game or wager real money.
Microtransactions or In-Game Purchases
Many free games have in-game purchases function, where players can download various premium things to boost their gameplay. These are known as microtransactions. Many major free games like PUBG, Fortnite, Clash of Clans, and many more earn millions from their in-game stores. Game developers provided virtual things such as skins, exclusive arms or shield, additional game levels, loot boxes, and coins through their in-game purchases. Many players, in order to enhance the entertainment, buy such things and this becomes a major source of income for the free game developers.
This has become a popular method to monetize free games without running intrusive ads. When people get additional features and virtual money to spend in the games, they definitely go for the in-game purchases.
Partnership or Sponsorship
Many free games partner with other companies to provide information on behalf of that sponsor to the target audience. In order to generate profit through sponsorship is quite difficult. Prior to developing a free game, developers have to consider very aspects to add to the game from which sponsors can benefit. This is the reason why most free games promote other games to develop in the same studio. This is a good way to make a profit from the free games, but finding the right partner is a daunting process.
Game developers offer their games for free download and offer some free features with it. However, some premium functions can only be unlocked when users opt for the paid upgrade. This is quite similar to the in-app purchase, but still much different. Here, players can download and play the game for free but in order to reach the next levels, they need to unlock them by paying a price through microtransactions. Well, this option is not mandatory.
Collecting and Selling Data
User data is very important, and it helps to generate a decent amount of money. Most free or paid games collect the users’ data, and this data is sold to buyers (researchers or marketers). This data is used to identify the user behavior and approach towards gaming. This data may include email IDs, interest and preferences, and social network accounts. Without selling such data to others, developers can use this data for their benefit by displaying ads or developing new features.