—TechRound does not recommend or endorse any financial, investment, gambling, trading or other advice, practices, companies or operators. All articles are purely informational—
When it comes to online gaming, size matters. This is especially relevant when discussing the global market capitalisation of the iGaming sector. Recent studies claim that its net worth now exceeds $225 billion dollars, and it is projected to grow to more than $330 billion dollars by the year 2030.
However, what might surprise readers is that the majority of this revenue is not generated from paid downloads, subscription packages, and loyalty programmes. More than 85 per cent of these profits are derived from free-to-play (FTP) games.
Try Before You Buy
This strategy has existed since the dawn of the online gaming sector, and it actually makes a great deal of sense. An example will help to illustrate why trying before you buy is so successful.
Slots are one of the most popular genres within any online casino. Casinos will often group slot themes into categories such as Megaways software, “book of” themes, and bonus buy features. New titles always generate a significant amount of interest, and these are frequently offered as demonstration versions to players. It costs nothing to provide a demo, and assuming that the game boasts an immersive experience, the user is likely to play for real money in the future. This can be considered a form of passive marketing.
PPC Advertising
Users who regularly play games with their smartphones might be aware of this tactic. Many free-to-play games will embed advertisements within their basic mechanics. These games then earn a small amount of revenue when the player clicks on the ad. This is known as pay-per-click (PPC) advertising. While the profits associated with each interaction are minimal, they can still accumulate over time.
The Notion of “Freemium” Games
While many games are technically free to play, a caveat may still be present. Some platforms are known as “freemium” games. In other words, players can access basic features. If they wish to leverage more advanced options, they will need to make small purchases, commonly known as microtransactions.
Diablo Immortal is a perfect example. This game can be downloaded and installed at no charge. However, a host of features will only be unlocked by confirming microtransactions. Consider the following perks:
- Character skins
- Unique weapons
- XP (experience points)
- Battle passes
- Legendary gems that can be used to craft various powers
Some claim that microtransactions are unfair to free players, as those with the most money (often known as “whales”) tend to enjoy the lion’s share of benefits. However, this is still a viable strategy.
Real-World Merchandise
Many of the latest games provide options to obtain merchandise (known as “merch”) by making one-off payments. Although this tends to be limited to loyal players, the profits are nonetheless very real. T-shirts, trading cards, and figurines are common examples.
Furthermore, those who make payments may also be rewarded with additional benefits such as a membership to a loyalty programme, prioritised customer support, and access to exclusive tournaments.
A Proven Business Model
Free-to-play games have come to represent the backbone of the iGaming ecosystem, and for good reason. Although it may initially appear as if the developer is “giving away” its secrets, nothing could be further from the truth. On the contrary, this technique is a great way to advertise latest releases, and to cater to an even wider target audience.
—TechRound does not recommend or endorse any financial, investment, gambling, trading or other advice, practices, companies or operators. All articles are purely informational—
