In free to play games, significant money may be spent in user acquisition. The business model for many games is: effective cost per new unique user <= life

In free to play games, significant money may be spent in user acquisition. The business model for many games is: effective cost per new unique user <= life time value of the user That gives you a profitability margin. Then, you need to acquire a lot of users, put them in the game and, move them from 1 to 3: 1. New user 2. Recurring user 3. Paying user Additionally, if users invite other users, that lowers your effective cost per new user, increasing your profitability. The process of getting paying users is very lossy, with only a small minority becoming paying users. That's why paying users have to pay so much. For a while it was generally accepted that freemium games monetize more than premium games. But with the recent proliferation of games I am unaware if that is the case anymore.