Free online games have become increasingly popular over the years, with millions of people across the globe indulging in these games every day. With the rise of smartphones and access to the internet becoming more affordable, the number of people playing free online games has skyrocketed. It’s no surprise then that the gaming industry has become one of the most profitable industries in the world, with a revenue of over $152 billion in 2019 alone.
But the real deal is how these platforms make money in the end. Let’s get some business insights into the gaming industry!
How Do Free Online Games Make Money?
- App Purchases: In-app purchases are a feature in many free online games that allow players to buy virtual goods or currencies using real money. These virtual goods could be anything from extra lives, special weapons, or even new levels. Games like Candy Crush and Clash of Clans have mastered this feature and have become some of the most profitable games in the world. Players can choose to buy these virtual goods to progress faster in the game or to gain an edge over their competition.
- Advertisement: Another way that free online games make money is through ads. In-game advertising is a huge industry, with companies paying millions of dollars to have their products and services advertised in popular games. These ads can be anything from banners that appear at the bottom of the screen to video ads that play during loading screens. Gaming platforms make money by charging companies for the placement of these ads. The more popular the game, the higher the cost of advertising.
- Partnerships and Sponsorships: Gaming platforms also make money through sponsorships and partnerships. Many popular games have partnerships with big brands or companies, which provide additional revenue streams. For example, Fortnite has partnered with Marvel, Nike, and the NFL, among others. These partnerships allow companies to create custom content and in-game events, which keeps players engaged and excited. Gaming platforms make money by charging these companies for the partnership and access to their player base.
- Subscriptions: some free online games make money through subscriptions. These games offer exclusive content, features, and perks to players who subscribe to a monthly or yearly plan. This type of revenue model is popular in massively multiplayer online role-playing games (MMORPGs) like World of Warcraft and Final Fantasy XIV. Players who subscribe to these games gain access to exclusive content like new quests, items, and even playable races. Gaming platforms make money through these subscriptions by charging players a recurring fee.
- Data Selling: gaming platforms can also make money through the sale of data. Free online games collect a vast amount of data on their players, from their gaming habits to their purchasing behaviors. This data is incredibly valuable to companies looking to target their advertising to specific demographics. Gaming platforms can sell this data to advertisers, allowing them to create more effective and targeted ad campaigns.
- Game Tournaments: another way that free online games make money is through game tournaments and competitions. Many popular games, like League of Legends and Dota 2, host tournaments and competitions with large cash prizes. Players can compete against each other to win these cash prizes, and gaming platforms can make money by charging a percentage of the prize pool or through sponsorships from companies looking to advertise during the event. These tournaments and competitions also help to keep players engaged and excited about the game, which can lead to increased revenue from in-app purchases and subscriptions.
Free online games have become one of the most popular forms of entertainment in the world. The gaming industry has grown exponentially over the years, with gaming platforms earning billions of dollars in revenue. There are several ways that free online games make money, from in-app purchases to advertising, partnerships, and subscriptions. As the popularity of free online games continues to grow, so does the potential for gaming platforms to make even more money. Whether you’re a casual player or a hardcore gamer, it’s clear that free online games are here to stay.