Here's How Free Phone Apps Make Money

If you’ve ever wondered exactly how free games make money in the wake of the impossibly popular Pokémon Go, you’re not alone. Inspired by Pokémon Go’s monumental success, Vox decided to take a look at exactly how free games make a profit.

In the video above, Vox explains that free-to-download games monetize gameplay, making items available for purchase at different points in the game. While that should come as no surprise to anyone who has played Candy Crush or Clash of Clans, you might be surprised to learn that game developers are actually employing lessons from behavioral psychology to incentivize spending. For instance, developers make spending money within the game as easy as possible, while making certain kinds of gameplay frustratingly difficult if you refuse to make an in-app purchase.

Even more surprisingly, developers aren’t trying to convince the majority of players to spend money on games—instead, they’re trying to lure those rare customers known as “whales,” who are willing to spend hundreds, or even thousands of dollars within a free app. While most of us are able to resist the temptation to spend money to make it to a new level, some players are particularly susceptible to these apps’ call to spend, and they’re the ones helping the games make a profit.

“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,” Vox explains. “If you’re really having fun, that’s great, but it might be worth rewarding games that find another way.”

Fortunately, if you’re a Pokémon fan, Vox notes that the Pokémon Go app uses fewer manipulative tactics than other games—which, they claim, is a “pretty good reason to buy some lure modules and some incense.”

Banner Image Credit: Vox, YouTube