How Games makes Money?

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If you are a kid or you are an adult we all love to play games. Games and Music are the two things which makes us feel better no matter how worst situation we are in.

When you were a kid you might have played FIFA, GTA, NFS and many other series or you might still be playing games like PUBG, Clash of Clans, Fortnite, Apex Legends. So have you ever given a thought how does these games makes Money?

In 2020 Gaming Industry generated $155 Billion. Analyst have predicted that till 2025 this industry will generate around $260 Billion.

So how does Gaming Industry makes Money? We will tell you all about it…

So basically there are two types of games available Paid Games and Free to Play Games.

How do Paid Games earn Money?

Like the name says these games are needed to be purchased before you can play them. So to play these games there is a premium price to pay. So because of this premimum price Paid Games earn money.

It cost around $265 million to develop Grand Theft Auto V. A team of hundreds of developers working for many years all of them need paying plus cost of office, software, taxes etc. But GTA V has made over $6 Billion in revenue. It was the best return of investment.

There are other games that have cost more to develop since GTA V came out, including Cyberpunk 2077. But current record holder is Rockstar’s another game Red Dead Redemption 2, which cost $540 millions to make.

Call of Duty Modern Warfare 3 has generated a profit of $775 million after just 5 days of its launch.

Call of Duty Franchise worth is equal to Avatar, Titanic and The Avengers all combined.

How to Free to Play Games earn Money?

Like the name says these games are freely available in Steam, Epic Games, Play Store and App Store. If these all games are free then how does they generate money?

As these games are free so the downloads of these games are very high. So these game do the following things to generate money:

1)Use Ads

These games use Banner or Video ads in between of their games. You might have seen these ads in the games like Flappy Bird, Asphalt 9 Legends etc. But these ads are very annoying so many people gets irritated. So the games need to balance these ads. For this the solution they use is they give Rewards after watching an Ad which help you levelling up in the game.

It’s a clever technique, people watch ads and gets rewarded and Games generates profit.

2)In-App Purchase

Inside every game they have their own currency like Gems, Diamonds, Gold etc. which boosts our gameplay. So these currency can be bought by real money. If we want to buy some skin in games we need to pay actual money.

As it’s downloads are higher then many people use In-App Purchase around 2-5% of people playing game use In-app Purchase which helps games generate money.

Then there is Season Pass which can also be bought using actual money. They include many rewards in Season Pass.

Then occasionally they gives Special Offers where they give many things in discounts and people buys it which help them in generating money.

This all is a very tough task because Developers needs to make their game very addictive so people gets addicted to the game and then decides to do In-app purchase. Games like Clash of Clans, PUBG, Clash Royal, Candy Crush include In-app Purchase.

Clash of Clans generate around $5 Million a day. That’s a huge number.

CONCLUSION

So this is how Paid Games and Free Games earn money.

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