The Perils of Freemium Gaming: Part Two - What They Are and How They Profit at your Expense

Updated: 8 hours ago



In the last article, I recounted my near-miss with freemium gaming. I was lucky, in that I came out of the experience unscathed, with only my pride bruised a little. The game’s predatory monetization methodology almost got its claws into me. Almost…


I was one of the lucky ones. All too often, the claws of freemium gaming do manage to sink in. Once hooked it can be difficult to escape, especially for people who are particularly vulnerable to its callously calculated trickery.


I will warn you now, you may be disgusted by the consumer-hostile and outright exploitative business practices you will hear described in this article series. I know I was when researching them. What’s more, few, if any, of the case study stories that might be included have a happy ending like mine did, and some may well still be ongoing at the time of writing.


I hope that after reading this article series you will better understand just how underhand the freemium gaming industry can be. We will see that freemium ‘games’ are designed from the ground up to be as addictive as possible. We will learn that those who fall prey to them and run up enormous debts are not its best players; they are its victims. So, if you are ready for it, let’s dive in now.


Full Disclosure



I have very little first-hand experience of freemium gaming other than my brush with Family Guy, the Quest for Stuff. Therefore, much of the information that follows comes from second-hand sources. I have left links and references where possible should you wish to follow them up.


This relatively limited first-hand experience of freemium gaming is partly due to my ‘Once bitten, twice shy’ attitude and partly due to many freemium games being repetitive, boring, and frankly not particularly fun to play. With an X-Box 360, PS3, Wii, gaming PC, and a library of 500+ games to play between them, why would I want to waste my time playing sub-par games on a tiny iPhone screen? “I wouldn’t” is the obvious answer, and considering the nature of this site and its core readership, I imagine most of you wouldn’t either.


However, gamers such as ourselves are not freemium gaming’s preferred prey. Far from it in fact…


Target Audience



Most freemium gaming is mobile gaming - i.e. smartphones and tablets - and the mobile market is very different. There have been attempts to make ‘proper’ single-player, story-driven mobile games in the early days of tablets and smartphones, games such as Dead Space iOS and Mass Effect: Infiltrator. However, these are very much in the minority.


The majority of the mobile gaming audience consists of people who are not traditionally gamers. Several of my older relatives - who wouldn’t know the difference between a PS4 and an Atari 2600 - regularly play mobile games, and this appears to be the norm. Due to the target audience’s relative ignorance of the gaming scene as a whole, they are not acquainted with what is - and what isn’t - acceptable common practice in video games.


This may include being ignorant of what is ‘the done thing’ in a video game’s design, gameplay mechanics, and crucially - monetization methods.

Lacking this valuable frame of reference, they may be naive and easy prey for the unscrupulous - and the companies behind freemium games know this all too well.


What are Freemium Games and how do they Make Money?


Before we dive in, a distinction should be made between freemium games and games that are supported by ads. Many of these ad-supported games give players the option of purchasing the game and thus play it add-free. The ‘pay to remove ads’ method is arguably more ethical and was common after Apple’s October 15, 2009 decision to allow free games to include in-app purchases.


However, the practice fell out of favor and the freemium model took over. Why? Most likely profit margins. A customer who pays to get a game ad-free pays only once. A consumer under the freemium model may pay again, and again, and again - with no upper limit on how much they might spend.


The freemium game business model is relatively straightforward. The games are free-to-play (F2P), so theoretically players could enjoy a F2P game without spending a single penny. However the games feature in-app purchases, and this is where the money is made.


These in-app purchases are not mandatory of course, which is how such games have historically ‘gotten away’ with describing themselves as free-to-play games. However, the worst offenders are created in such a way as to make playing - but not paying - a longwinded and frustrating experience, as we shall see later in the series.

Most free-to-play/freemium mobile games are simplistic, both in terms of graphics and gameplay. Most freemium game devs would probably give the following ‘official reasons’ why this is so;


One: The hardware limitations of mobile devices - such as their relatively weak processing power and the need to tailor the controls to a touchscreen interface.


Two: That the games are designed so they can be picked up and played on the go or for when you only have a few minutes to spare.


Three: To make them accessible to casual gamers.

Whilst these reasons are undoubtedly true, they may not be the only reasons, and rarely the primary reason.


There is another reason. This perhaps is the primary reason and it is something few unscrupulous devs are likely to admit. This reason is that it makes creating such games far quicker and easier. In turn, this allows small teams or even solitary creators to create and maintain a freemium game, whilst larger teams could create and maintain several games at once - especially so if they are using more-or-less the same game engine, mechanics, and assets.


Quantity over quality appears to be the name of the game, since the more games a company is running concurrently the more games they can profit from. To put this into perspective, King - the makers of the insanely popular (and profitable) Candy Crush Saga series has created 23 games between 2011 and 2019.


There are freemium games of almost every genre. Examples include puzzle games such as the aforementioned Candy Crush Saga, JRPGs such as Final Fantasy All the Bravest, MMORPGs such as Raid: Shadow Legends, Strategy games such as Clash of Clans and even Augmented Reality games such as Pokémon Go.

What unites these disparate games is their monetization methods.


Revenue and Market Share




The sheer number of free-to-play games available is immense. What’s more, they make up the bulk of the mobile gaming market. Sensor Tower’s list of the top 250 grossing mobile games in the USA in 2019 features 249 ‘free’ games and just one paid game - Minecraft.


The site’s lists for Canada, The UK, Australia, China, Japan, South Korea, and Russia all paint broadly similar pictures. I would not be surprised if the lists for most of the other developed world’s nations looked much the same.

With such a vast quantity of games, it is little wonder that the quality of many of them are so poor.


The profitability of the top-performing mobile games is staggering, with Candy Crush Saga grossing $6.37 Billion by April 2019. The global freemium gaming market is enormous, with 2018 end-year estimates by Nielsen-owned research company Super Data suggesting gross earnings of $88 Billion. But how has freemium gaming become so huge?



Deliberately Addictive



Because the devs behind such games know what they are doing, and their practices are based on proven biology and psychology. When it comes to biology freemium games are designed to harness - some would say hack or abuse - the human body’s reward system.


In a nutshell, the body's reward system has evolved to reinforce behavior that promotes survival and reproductive fitness by making us want to do said things.

This is achieved by activating the ‘pleasure centers’ in the brain, which activate when the neurons within them are stimulated by the neurotransmitter dopamine. Dopamine release is triggered by ‘reinforcers’, which come in two types, primary reinforcers, and secondary reinforcers. The greater the reinforcement the more dopamine is released, the more dopamine is released the more the neurons in the pleasure centers are stimulated, and thus the greater the pleasure response.

(This is a gross oversimplification of course - feel free to check out the links to read about it in detail - dopamine pathway and Dopaminergic cell groups).

Primary (intrinsic) reinforcers are biological - food, drink, sex, parental care, etc.- and they *usually* have a satiation point. This satiation point places a hard limit on this reinforcement - with food, for example, you will eventually feel full and thus not want to eat anymore. Therefore, primary reinforcers are *usually* self-regulating.

Secondary (extrinsic) reinforcers are non-biological and ‘artificial’. These may include money, reputation, power, status, and feelings of winning or accomplishment. Secondary reinforcers do not have a satiation limit, and therefore there are no hard stops to limit reinforcement. This makes them potentially more addictive in the short-term. What’s more, they remain addictive over a longer time frame.

Freemium games are secondary reinforcers that are designed to be as addictive as possible over the longest time frame possible, which is why they have the potential to be so damaging.


As with any reinforcement, too much of it for too long can lead to downregulation and desensitization. In short, you will no longer find it as pleasurable. With a game, this means you will get bored of it.



Conclusion of Part Two



Freemium games, however, use a Smörgåsbord of gameplay mechanics and psychological tricks to prevent this, with the aim of keeping players hooked long term. We will investigate these in the next article: The Perils of Freemium Gaming Part Three: Dirty Mind-Tricks.

Did you know the freemium industry was so large and lucrative? Were you aware that some foreign markets such as China have an enormous range of freemium games all their own? Did you know of dopamine and its effects on the brain’s reward system? Feel free to write your answers or any comments you have in general, in the comments section below.



Iain is a 40+ author and gamer from England, who started his gaming journey on the Atari 2600 36 years ago. His specialities include obscure cult classics, retro games, mods and fan remakes. He hates all sports games and is allergic to on-line multi-player. Since he is British, his body is about 60% tea. He can be reached via Twitter at https://twitter.com/IainBaker17, and contacted via email at the_nomad78@outlook.com


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