How free games are designed to make money

How free games are designed to make money


After Pokemon Go was released in the US, it
took less than a day before it was making more money than all the other apps in both
Apple’s and Google’s app stores. “It’s already earned $14 million in revenue
since launching last Wednesday — not even a full week.”
But users didn’t have to pay a cent for the game. All that money was coming from optional
purchases people were making as they played. This is the world of Freemium apps — a business
model that, in the past few years, has largely wiped out the market for paid games.
Now game designers have to monetize the gameplay and one way to do that is by applying some
fundamental lessons of behavioral psychology. The first thing these games do is set up a
virtual currency so that it doesn’t feel like you’re spending real currency, even
though you are. This is a variation on something we’ve known
for decades – which is that people find it harder to spend money when they’re paying
in cash than if they’re using a card. “So when you pay cash for something, you
see it leave your hands and you get a very immediate sense of how much your cash reserves have
dropped, how much your wealth has dropped.” Games add yet another layer. You pay for lollipop
boosters with gold bars and you pay for gold bars with your credit card, which is already
distanced from actual payment. And then on top of that, they don’t make
the exchange rate simple. It’s not 50 gems for 50 cents.
“They’re always something weird like 1 dollar will get you 12 purple diamonds, and
that sort of off kilter exchange rate is the same thing you see with people spending — tourists
spending money that they’re not familiar with in foreign countries.”
If incense costs 80 pokecoins and a batch of 550 pokecoins costs $4.99, how much real
money does incense cost? Yeah i don’t know either.
So you’re spending money that doesn’t seem real and it only takes a second because
the app store already has your credit card. The whole payment process is designed to be
painless. Other parts of the game, however, are designed
to be painful. A key finding of behavioral research is that
people tend to experience unexpected losses more intensely than comparable gains. That
can inform the timing of purchase prompts. In Puzzle & Dragons, players progress through
a dungeon before facing a boss, and if they die, they stand to lose all the rewards they
just earned. That’s when they’re presented with the option to save their coins and their
points by spending magic stones, which you can by in the store with real money.
Other developers actively embed inconvenience into the games, so that you can purchase convenience.
In Clash of Clans and Game of War, everything you try to build has wait times that get progressively
longer but are skippable, for a price. “So they build incentives to remove pain
points into the games and then if they want that, then they have the incentives to insert
pain points into the game.” Ultimately though, only a tiny percentage
of players actually become payers. And a small percentage of payers are those so-called “whales”
— people who will pay hundreds, sometimes thousands of dollars in the app.
The marketing firm Swrve estimates that about half of the revenue for mobile games is coming
from less than a half of a percent of all players.
Which means that for some of these games, non-paying users, which is most people, are
essentially pouring time into a game designed to hit the pain points of a small, susceptible
group of players. If you’re really having fun, that’s fine.
But it might be worth rewarding games that find another way. As of now, the monetization
in Pokemon Go is unobtrusive, it’s kind of tucked away. And that lack of manipulation
is a pretty good reason to buy some lure modules and some incense. One argument in favor of free-to-play games
and in-app purchases is that they give developers a reason to keep updating the games. And they’re
collecting tons of data in order to inform those updates — things like where you get
stuck, where you close the game, which features are most popular. All that data can help them
keep making a game that you want to keep playing. But it also means that they can tweak the
prices based on individual profiles and behavior. If it seems like you’re about to quit, hey
here’s a discount. Or if you’re the type of person who will spend a lot of money, maybe
they bump up the prices a bit. They can even look at how fancy your phone is and what country
you live in and set the prices accordingly. According to one survey, 40% of game developers
said they were setting different prices for different players. But the survey was anonymous
and it’s pretty hard to tell which games those are.

100 Comments

  1. Charlie Thai says:

    Clash of clans gives you a lot of gems atleast for me

  2. GhoulZ says:

    Now fortnite

  3. JMarkJ says:

    Just play Geometry Dash

  4. NeilDaNub says:

    cough cough* ea

  5. Konsumi Turvamees says:

    so paid games loose money?

  6. Yasser Ben says:

    How do games without in app purchases and without adverts make money ?

  7. Matix 777 says:

    Battlefront 2: hold my microtransactions

  8. TeleTranTM says:

    Why was this recommended

  9. Lucid says:

    The only game that does this right is Team Fortress 2.

  10. Remy says:

    the only game ive spent money on was bitlife, because bitizenship is kinda essential

  11. Magma Fang says:

    Game of war!!!!

  12. Mike Gorman says:

    I don't need sleep, I need answers.

  13. SURGE 2 Development says:

    Mobile games are trash

  14. DatMemeKid says:

    Well you see. I spoof on pokemon go

  15. a Tree says:

    Cool math games

  16. Jerry Jin says:

    Cough cough Fortnite cough cough

  17. Alek Curiel says:

    Good vid

  18. Percy Arthur says:

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  19. Doggo :3 says:

    I have a friend who spent 20$ on gems in Calsh of Clans for himself and his other friend, a couple months pass by and he deleted the game and blames me for wasting his money and trys to get easy cash out of me……I dont even know why i consider him a friend.

  20. CJ Londonio says:

    Where's the money in your iPhone?

  21. h says:

    – o – what a surprise

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  23. Omar T. says:

    Pokemon😂😂😂😂😂😂😂😂l am from the future and you dont know how much money fortnite makes aday

  24. Elias Ortiz says:

    Just download modded APKs

  25. 50 subscribers without any video CHALLENGE says:

    Can i get some subscribers? 😭

  26. Ahmad Murchad says:

    South Park S18E06

  27. gaurab talukdar says:

    Let me tell you a SOLUTION
    JUSTTT!! DOWNLOAD MOD2ED GAMES

  28. sam louis says:

    Fortnite rules them all

  29. E-Andres99 _ says:

    Ads

  30. Rauhaan Shoes says:

    Ads

  31. NightcoreSyan says:

    ADS

  32. Rasyid Al Faruqi says:

    it's easy for us players to decide, for me i'd just quit the game when the free players stand no absolute chance to compete agains whales, because free players who spend tons of time generating traffic for the game needs to be rewarded too.
    other than that, the game is purely a business, with an excuse of a game.

  33. mr. ah says:

    how free games are designed to make money
    Me: wow, who would've knew.

  34. Daredevil says:

    That is why Pocket City is better than City Mania.

  35. Mayank Rawal says:

    I knew it was a TRAP!!

  36. Barcio says:

    3:02 Lords mobile

    Trust me, I know, I played it for some years

  37. nancy says:

    im sorry was that whole video an ad for pokemon go incense

  38. exe GODMODE says:

    This goes against everything games stand for to such a big extent that I don`t think they can be considered actual games but paid interactive animation sequences. You just pay so you can see the next thing that happens.

  39. Xandria Ravenheart says:

    I just have Plant Nanny and I Love Hue as games on my phones. Plant Nanny actually helps me keep up with drinking 2 litres of water a day, and I Love Hue tends to calm me down. It's sad that some people can cheat their way and actually purchase things in Plant Nanny though. But yeah that's my game history.

  40. Alina M. says:

    1:55 I paused the video to actually calculate it, it's about 1,37/ Incense ✌🏻

  41. gab the pesh says:

    Just use game guardian or download a modded apk

  42. Damnit Bobby says:

    Thank you whales.

  43. Mayooran Jayamohan says:

    THIS IS WHY I PLAY GTA SAN ANDREAS

  44. Kitsune says:

    aaahhh… microtransactions

  45. Benny Martinez says:

    Gta 5 online shark cards be like…

  46. trinityproj3ct says:

    GRID Autosport (pay once) VS. Real Racing 3 (freemium) is a perfect example of this.

  47. MonstieBoyNL says:

    Fortnite..

  48. KourtneyZenovia says:

    Sooooo they couldn’t have interviewed any millennials cause im VERY aware of my bank account status and refrain from swiping my card JUST AS MUCH as breaking a big bill 😭😭

  49. Distinctio says:

    1:45 Incense costs 0.7258 dollars

  50. ODS_Cobbtune says:

    I have payed for Clah of clans, The game of life and Roblox

  51. Gury Singh says:

    i knew it before watching this, but i still dont want to
    believe this

  52. Faris Hamdan says:

    Ea sports 1 diamond 60000 dollars 💵

  53. Chris Ang says:

    Essentially this sounds like gambling where the sensation of loss encourages us to spend more money for the satisfaction of winning

  54. Klim simanchev says:

    lemme tell u so u don't have to watch this 5 min vid. ads, in game purchases

  55. midori says:

    Am I the only one who hates to wait for those buildings to “build” but still waits 7 hours?

  56. Ismat Ara says:

    f2p players: im gonna end this whole mans career

  57. MM Aviation says:

    Just watched and advert and gave you money

  58. MM Aviation says:

    1:56 why use your credit card, you could get hacked !!!

  59. Mishas Channel says:

    69k likes

  60. Gaming channel says:

    E arts has left the chat…

  61. Yulia Federoma says:

    1:44 it cost 0.88 dollars

  62. Jesus Franco says:

    I just pay by watching adds

  63. Anuj Choudhary says:

    EA wants to know your location

  64. David Perry says:

    One word: Microtransactions.
    They have been used in free to play games on mobile phones since the late 00s.

  65. Alina Bakhvalova says:

    1:40 OMG that's a simple proportion: (4,99×80)/550=0,725… So incense costs 73¢. Easy.

  66. musicizair says:

    Try explaining this to a Warframe player

  67. Civan Erdoğan says:

    1 40 the turkish lira isnt like that. It was like that from 2005 to 2008 or something

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  69. OjaruFan says:

    Who do some people hate these types of games?

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  71. Barcio says:

    Lords Mobile!

  72. yas says:

    YouTube recommendation has brought us here again

  73. VEEJAYBAGO RAGEGAMER says:

    Pffft download lucky patcher if you wan't free gems with no credit card lol

  74. Sanu Kumar says:

    I just hacked in app purchase or through a mod apk

  75. Diyor Khalilov says:

    Any business is good. All the game which is free, they are paid. our brain is simply designed so that we don’t notice how we spend money on free games

  76. Swyvvrynn says:

    anyone else notice the android ui on the iphone?
    oof

  77. Michelle and Christ.E.L pusheens! says:

    Just like roblox and CocoPPaPlay
    And cocoppaplay is suppost to be a gacha game and you already spend like 50 in a week

  78. Goth Nerd says:

    I wonder how many bankrupt parents will it take for mobile games to get banned?

  79. Color Code says:

    In April purchases

  80. Diego Da Rocha says:

    Free app = no spending money because I don't have money to spend in the first place hence why I got the free app🥰

  81. Ernie Jones says:

    Hey YOU yes YOU , you can earn CASH by DOWNLOADING :
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  82. Swastik Singh says:

    They have never heard of the app called FREEDOM on Google play

  83. Trinifity says:

    Jailbreaks: allow us to introduce ourselves

  84. IceCreamFrost says:

    I think I’ve watched dis video alredeh

  85. ArchtansterPG says:

    Can't forget ads!

  86. Phantomdude says:

    Almost 4 years later : This is how 60$ games make more money

  87. The Leaf Flyer Team/The Clear Lakes 44 Theorist says:

    Free games need redesign.

  88. Venicouse says:

    Pay to win
    Remove ads
    ___ Premium/pro

    Some examples

  89. ZERO says:

    Yayyy…………………………ahhhhhhhh

  90. Herbatile says:

    How much real money does incense cost?
    Ans: $0.73

  91. Herbatile says:

    If you feel that sort of pain while playing the game, then what’s the point of even playing it?

  92. Monado Boy 16 says:

    Apple should introduce a new rule on the app store quality control.
    Apple: From now on, any app that is considered "games" must be AT LEAST 1 DOLLAR AND NO MTX

  93. Zyga says:

    this is the boomer take on freemium, normal people know what theyre getting into, boomers get tricked by this stuff lol

  94. Chef Pee Pee says:

    And this, is why I don't play Fortnite. Such a terrible game.

  95. MoviesClipOfficial says:

    In app purchases made me a hacker thanks to that no money required .

  96. Lolita Subliminals says:

    I spent a tiny amount to get some robux so I could look presentable

  97. Phong Trần Thanh says:

    Oh you mean "surprise mechanics"

  98. Thomy Fun says:

    A wise man once said, "Fremium is latin for 'not really'."

  99. Recheal j says:

    Through payingmecash,wordpress,com i made my first cash online

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