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What is free-to-play? How free games make money

Free-to-play games cost nothing to start, but most earn money from a small share of players. Here is how microtransactions, battle passes and premium currencies work.

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A person playing a free game on a phone with an in-game shop pop-up

Illustration generated with AI

A free-to-play game lets you play a significant part of its content without paying. Unlike premium games, which you buy upfront, it earns money once you are already playing, which is why it is sometimes called free-to-start.

How they make money

  • Microtransactions: cosmetics, boosts, time-savers or extra content
  • Two currencies: one you earn by playing and a premium one you buy with real money
  • Battle passes: seasonal reward tracks with a free tier and a paid tier
  • Loot boxes: paid random rewards, which researchers have compared to gambling
  • Time-limited items that have to be bought again
  • Advertising

Who pays

Depending on the game, between 0.5% and 6% of players spend money. One report found that 1.5% of players paid and that half of the revenue came from about 10% of them, the so-called whales.

The criticism

The biggest complaint is pay-to-win: when paying gives an advantage over other players. Some games avoid it by selling only cosmetics. Other criticisms are constant purchase prompts, children running up large bills and premium currencies that hide the real price of items.

A short history

Nexon’s QuizQuiz, released in South Korea in 1999, was among the first free-to-play games. In the late 2000s many subscription MMOs switched to the model, and in 2011 free-to-play revenue overtook premium revenue among the top 100 App Store games.

Frequently asked questions

Are free-to-play games really free?

You can start and play much of the content without paying, but the game earns money from optional purchases such as cosmetics, currencies or passes.

What is pay-to-win?

When paying gives you a competitive advantage over players who do not pay.

How many players spend money?

A small minority: depending on the game, between 0.5% and 6% of players.

This article was written with AI assistance from the sources linked above.

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