are “free” games of the month (PS+, Xbox Live, Epic Game Store) actually free? Are the developers giving unlimited copies to the platform for them to hand out/are the developers making money?
In: Economics
The developers of the games are paid by the platform company. The details of that deal isn’t public knowledge as far as I’m aware. I think it’s likely they are paid a lump sum to make the game available for free for a limited time, but it’s also possible they are paid per download.
They are not completely “free” for the consumer because the consumer has to make/have an account and claim/download the game from one source/launcher. Certain services that require subscription also prevent you from downloading and playing “free” games if you stop paying for the subscription.
Digital goods are much easier to distribute than physical ones. They don’t take up space and don’t need manufacturing. All you need is a place to download it and a way to set that an account owns the item.
For the developers, they usually get a payment from the service if their game gets distributed for free. This makes sense for older games that probably will not get much more money in sales. For others, exclusivity on one platform guarantees some known amount of income rather than leaving the game to face off against others in the often saturated market.
For the service, offering free games is known as a [loss leader](https://en.wikipedia.org/wiki/Loss_leader). By getting you into their service or rewarding you for having it, it makes you more likely to keep spending money later. This is much like stores offering door-buster deals to get you in the store so you’ll end up staying in the store to buy other items.
I don’t know about other services, xbox let’s you keep the game forever even if you stop paying for the Gold subscription, if you at the point of time had Gold access and claimed the game its yours. The details of the deals with publishers/developers are not known and it is speculated it varies between titles. Indie games are most likely bought in one time lump sum, big titles are probably bought based on the actual volume claimed, e.g. 2 dollars per claimed copy up to 1 million and amount per copy decreases with volume, so if game gets downloaded 5 million times, anything above 1mil is costing Microsoft less than the initial price per copy, e.g. 1,50 per copy up to 3mil, 1USD per copy above 3mil and so on.
Epic game store is the only one that I’d consider free, because they only require that you have the launcher installed to play them, whereas the others require a monthly subscription that you pay for. Epic did this to get people to adopt their platform and certainly takes a loss with the games, but it’s safe to assume they make it back up with other sales. They get you checking in weekly with the free games, then post ads for exclusive games that can’t be found on any other platform with the expectation that you’ll eventually buy one, two, or ten of them.
Ps+ and xbox live are not free at all, you pay for the right to go online and they give you some “free” games. If you aren’t getting them for paying 0 dollars and 0 cents they aren’t free.
Tl;dr
Xbox live and ps+ are like barcades with free games but a cover charge. Epic game store is a barcade with free games, no cover charge, and drinks/food you cannot find anywhere else. You could go there and just play the free games, but for a lot of people that’s just a bonus to the drinks/food.
Since distribution cost for these purely digital platforms is essentially zero, this basically boils down to what kind of agreement is made between the distributor (Like Epic) and the developer (like the people that made Celeste)
These deals are not public, and aren’t made public, so its probable that part of the deal is not shouting about it.
But yes, the developer will be compensated in some form. This can be a lump sum, or the distributor can just give the sell price per copy to the developer. Though its likely that this is not a 1-1 conversion, to account for the large volume of copies handed out. (Lots of people will get the game just cause its free.)
Though i wouldn’t refer to PS+ and Xbox live games as “free”, that’s like saying you get a free newspaper if you sign up and pay for a newspaper subscription.
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