Free to Play is one of the biggest financial models at the moment with massive games such as Clans of Clans, Dota 2, League of Legends and plenty more all choosing to make their game free to play and download. However, some people question how games make so much money despite having a game that’s free to buy from the app store, surely it makes no sense and they aren’t getting enough income to pay for their production costs, staff and servers and such. However, there are actually quite a few ways in which companies like this make money, and in fact, make a hell of a lot of money. We’ve done a bit of research and have managed to find the main ways that these companies earn their money, with one of the options being quite obvious and likely the biggest money earner in the business.
The biggest and most obvious revenue for big companies such as these is the in-app purchases that are made available to users of the apps and games. It’s proven to be a huge success with the likes of Clash of Clans who offer their app as free but then offer gems which can help you progress quicker within the game. League of Legend’s biggest in-app purchase is obviously skins and new heroes. The system works on a rotation where there’s a new hero to play with every once in a while which players think is generous but in fact, works in favor for LoL. If you give a player the chance to play as a hero and they really enjoy it, they’re more likely to want to buy that character and then change up their look with a few skins. It’s one of those games where even the poorest man could end up spending hundreds quite easily if they played it for long enough.
The ability to purchase new looks, boosters, new play styles and more within games is a business model that most games are taking on mobile these days. This business model is becoming slightly more popular with desktop games, however due to the much larger development costs that go into making a game like this, the studio often finds themselves in huge debt or paying off loans for a long time before any profits start getting made.
The other big money earner within the world of free-to-play is the huge market that is in-app advertisements. You’ll often find within games such as Clash of Clans, or especially newer free-to-play games with advertisement buried into the application. Whether this is YouTube videos for other apps or maybe other services, there’s usually some form of advertising in there. Dota and League don’t actually use advertising choice other than promotion for their own competitions which happens via eSports. However, you shouldn’t be surprised to find videos, clickable ads and pop-up ads within other mobile free to play games as this is far more common and regular.
Once you’ve built up a respectable brand and recognition among fans then it’s not hard to go on and sell merchandise based on your branding. There are 32 million monthly active users playing League of Legends and 3 million playing at any one time in July (people off school/uni/work). In comparison, World of Warcraft, at its peak had 10 million monthly subscribers. Now, League of Legends IS free-to-play whereas WoW requires you subscribe to a $15 monthly fee. This makes the numbers more acceptable. However, there are still 32 million people playing the game every month. This means there are 32 million people who’d likely be willing to buy a t-shirt or a poster or a mousemat or anything else that has ‘League of Legends’ printed on it. That’s a huge number of people willing to spend $10-$40 in League’s Merchandise store.
So, as you can see, there are many different routes for free-to-play games to go down to receive money for their game that cost them a heck of a lot of money and then they’re selling off for free. The main income for apps like these is things they offer for money within their free game, whether it’s new looks for characters, new characters altogether, a way to improve your character/city quicker or even just a way to have more gems to upgrade something about yourself. They also offer up the opportunity for lesser games or other games looking to get more players to advertise their trailer within the games for their players to see. Finally, there’s the opportunity of merchandise which is only really likely for the biggest and the baddest of the names out there who have players who are proud to play and want others to recognise their passion for the app/game.