How Free-to-Play Games Like Pokemon GO Actually Make Money

Many of the world's most popular games are free-to-play, yet they still manage to make a lot of money. Here's a simple explanation of how they work, and why they're able to get people to for over their cash for something that's technically 100 per cent free.

This video from the Vox YouTube channel explains the complicated world of "freemium" games and their business models. These games are using the fundamentals of behavioural psychology to get you hooked and get you spending on basic gameplay. Here are a few of the biggest tricks they use:

  • They have a virtual currency with a complicated exchange rate, like gems, gold, or coins, so you don't feel like you're spending real money. It's similar to how it's easier to spend money with a card than it is with cash.

  • Buying the virtual currency is instant and painless. With a single tap or click, your money is spent and you barely even realise it. But other parts of the game are tedious and painful, making the desire to "pay-to-win" much stronger. Essentially, developers take away convenience, but offer it to players for a price.

  • Only a small percentage of players actually end up paying to play freemium games, but this group spends a lot of money. These so called "whales" are who keep these games afloat.

Of course, some freemium games are worse than others. The real money shop in Pokémon Go, for example, is fairly unobtrusive. And while the items in the shop do increase convenience somewhat, they're more about enhancing the way you play, not removing painful barriers.

Still, that hasn't stopped the game from making more money than any other app in both Apple's and Google's app stores.

How free games are designed to make money [YouTube]


    They're just relying on users' short attention spans and impatience.

    I remember reading a report on one game that estimated it would take 30 years of playing every day to reach the highest level of a freemium game without forking over money. But only 30 days with purchases.

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