The evolution of monetization mechanisms in free-to-play games

With billions and billions of players all over the world, the video game market is currently worth around $400 billion in global revenue. This record is notably due to the developments of different models such as the premium option, “free-to-play”, play-to-earn or even freemium. By 2025, this figure is expected to even double.

Although some video games are available for free, you should not be fooled by appearances, because they are a gold mine and generate enormous returns for their creators. This is what we are going to talk about in this article.

The explosion of the video game market in 2020: A year of unprecedented growth

In 2020, the video games industry experienced a spectacular explosion, amplified by the exceptional circumstances of the Covid-19 pandemic. While many sectors have been hit hard by health restrictions, the video gaming field has not only resisted, but thrived thanks to the widespread use of online activities. In France, the market for video games recorded an impressive turnover of 5.3 billion euros, as indicated by the Union of Leisure Software Publishers (SELL). A significant portion of this amount, almost 50%, comes from game console sales, highlighting the continued importance of these devices in digital entertainment.

Globally, the growth has been even more remarkable. The video games industry generated an estimated turnover of around $180 billion in 2020. To put this sum in perspective, this corresponds to the total value of wealth produced by New Zealand during the same year. This phenomenal growth is a testament to the scale and growing influence of video games on the global stage.

In France, video games have become a preeminent leisure activity, with around thirty million people having played at least once in a year. This figure illustrates not only the massive appeal of video games, but also their integration into the daily lives of French players. A notable finding is that more than half of gamers French people use smartphones to access their games, a trend that reflects the accessibility and growing popularity of mobile games.

Thus, the video game industry continues to evolve rapidly, with technological innovations. The pandemic has played a role in this evolution, highlighting the importance of video games as a form of entertainment and social connection in a virtual world.

The Free-to-Play Model: How Free Games Generate Revenue

The “free to play” model is increasingly seen as the future of the gaming industry. video games. Appearing in the early 2010s, this approach quickly gained popularity, particularly with the rise of mobile games such as Candy Crush and Angry Birds.

The concept of “free to play” refers to games that can be downloaded and played for free. In theory, these games are accessible at no cost, which facilitates their adoption by a wide audience. However, to enrich the experience, these games offer paid options and services, often in the form of micro-transactions. Players can thus purchase items, characters or special upgrades, which allows developers to generate considerable revenue despite the absence of upfront cost.

This economic model is based on the idea of ​​maintaining a constant link with players throughout their journey. Small expenses made regularly by players add up, providing game publishers with significant profits. Each payment is small, but the frequency of in-game purchases contributes to significant revenue. This strategy has transformed the way games are monetized, making free-to-play games financially profitable while providing a seamless experience for players.

Free-to-Play on mobile: Explosive growth

The use of mobile devices to play video games is booming. In France, the mobile games market recorded a 16% increase in turnover compared to 2019. This growth indicates that more and more players are accessing free games via their smartphones and tablets, without the need for expensive consoles. Microtransactions allow users to purchase additional items or features that enrich their gaming experience.

Titles like Candy Crush, Clash of Clans and Angry Birds stand out among the most popular free games on mobile. Additionally, online multiplayer games like Fortnite also attract a large audience. These free games, financed by in-app purchases, illustrate how the free-to-play model is establishing itself as a major force in the mobile ecosystem, generating significant revenue for developers.

The different forms of In-App purchases: Pay-to-Win or Pay-to-Accelerate

In-app purchases in video games are mainly divided into three categories: "pay-to-win", "pay-to-accelerate" and "cosmetic" purchases. Guillaume Rambourg, France manager at Riot Games, explains that cosmetic purchases, such as additional characters and costumes in their games, offer no competitive advantage. According to him, these purchases are purely aesthetic and do not affect gameplay. Players can also earn these items through "Influence Points", a virtual currency acquired through play, making League of Legends a true free-to-play game rather than pay-to-win.

This ethical approach is also adopted by Grinding Gear Games, publisher of Path of Exile. In this game, purchases do not influence progression or performance but improve playing comfort and allow aesthetic customizations. Competitions of decoration have even been organized, emphasizing that spending confers no direct advantage over other players.

However, the "pay-to-win" model, where players can purchase significant perks or additional levels, is still used in some games. Candy Crush Saga, for example, is a notable example on mobile, offering purchases that make progression through the game easier.

The pay-to-accelerate model is also very popular, with Pokémon Go leading the way. This free mobile game, without advertising revenue, generated around 12 million euros on the day of its launch in the United States thanks to the sale of "gems", which improve the performance of professional players. This concept, popularized in 2013 by Clash of Clans, allows players to accelerate their progress by paying, even if the game remains entirely accessible without purchase.

Stimulate impulsive purchases by encouraging your community

Once the community of players is established, the objective is to maintain their engagement and encourage impulse purchases, or “in-app purchases”. For example, Riot Games offers chests containing fragments of "skins" or "champions", enticing players to pay money to enrich their experience. Likewise, limited-time offers and promotions on various games, such as the message "Unlock more levels?" in Candy Crush Saga, use notifications to encourage players to make micropayments.

In addition, some publishers, such as Blizzard Entertainment with Hearthstone, implement reward systems to encourage player loyalty. By offering benefits based on playing time and online activity, these publishers increase the chances of players making purchases and increasing their engagement in the game.

Continued innovation to captivate players

To maintain player interest and expand your community, it is crucial to constantly innovate and respond to user feedback. Word of mouth plays a key role in the growth of gaming communities, making responsiveness essential. For example, after a controversial update called "Rubicon", Wargaming implemented a "sandbox" system to improve communication with players. As Stéphane Vallet explains, a selection of experienced players work directly with developers to test and refine new ideas before their official launch.

Likewise, Riot Games favors a transparent approach by avoiding aggressive marketing. Guillaume Rambourg specifies that the team regularly collects opinions from the community through social networks, forums such as Reddit, and community and e-sport events. This constant feedback helps developers better understand player expectations and adjust their development planning accordingly.

Adaptability and community engagement are at the heart of innovation in the free-to-play sector. By transforming business model challenges into opportunities, developers seek to strengthen their connection with players and optimize their offering to maximize profits.