Free Gaming: Is It the Key to Turning a Profit for Operators?
If you had asked the question a decade ago, most people would have laughed in your face. Why use freebies when gamers will buy titles for $60? It’s a waste of resources, or so it seemed at the time. Now, we’re well aware of the impact free gaming has on the industry.
Still, there’s more than one way to skin a cat. Therefore, not every operator uses the strategy to make a profit. But as the sub-sector continues to grow, the dilemma is whether they should turn their focus to freebies.
Carrot, Not the Stick
Gaming platforms need to appeal to users, and users are being engaged in a way that the industry has never seen before thanks to free-to-play offerings. Valorant and League of Legends are two examples of titles that command audiences in the tens of millions, making them insanely popular. As a result, operators that follow the lead they set usually benefit as it helps them to appeal to people who wouldn’t typically buy their products or services.
Gambling services are perfect examples because they combine freebies with paid content to maximize earnings, especially in the online casino sector where free online offerings such as remote slots and traditional table games don’t have to cost a penny. Since free games don’t charge, they remove the risks that are involved with real money services; for example, investing cash in games they don’t enjoy. Once players get to grips with games risk-free, they are more likely to move onto the casino games real money vertical as there are fewer surprises, something that’s reflected by the number of industry leaders that use the tactic, from BetMGM to Borgata and DraftKings.
They use it to great effect, too, hence why the US online casino market was valued at $1.98 billion in 2020 and will grow by 17.32% by 2026. At the heart of these figures are free versions of developers’ games.
A Precedent Has Been Created
The performance of free games is astonishing. In 2018, they generated $88 billion in revenues. Fortnite alone was the top earner with $2.4 billion. Overall, the total gaming market is valued at over $110 billion, and it hasn’t peaked yet. What this highlights is not just the popularity of the market, but the precedent that modern gamers expect.
Like with any business, a company that doesn’t follow a tried and tested method, one that its peers are using effectively, will fall behind. Considering the numbers above, it’s easy to see how operators can give up their market share by omitting free games from their strategies. On the flip side, implementing the plan can revitalize organizations and industries, as online casinos have proven. The same applies to sports betting, which was worth $66.98 billion in 2020, and is predicted to grow by 13.6% from now until 2026 in the US.
The health of the sectors that understand how to use free games to their advantage showcases how powerful they are, and why it may be necessary for operators to incorporate them into their business plans.