Exploring Mobile Gaming Revenues: The Price Tag of Impatience, Stress and Release

Abstract

The mobile gaming industry is growing at a rapid pace. Smartphones, tablets and other mobile devices are new channels to deliver games to customers. However, since the birth of Internet, users have been accustomed to getting things for free. How then are mobile game companies able to make billions € in revenue? What are the main drivers of profitability in this sector? Our objective is to dissect the freemium pricing strategy that is frequently used in the mobile gaming sector. With the help of the case study of Gameloft, we explore the method and the path for converting free into profit by playing with the users' frustration and stress.

Keywords: Mobile Gaming, Business Model, Pricing

JEL Classification: D21, L11, L21