How freemium pays
Free to play, and still earning
Garden Defense is free to download. Most players will never spend a cent. So how can a free game earn?
In the freemium model, everyone plays free, and a small share of players choose to buy extras: a new world, "Remove ads", a pack of seeds. Those few purchases, plus ads, pay for the game everyone enjoys.
Conversion rate
The conversion rate is the share of players who buy anything. It is the key number of freemium.
In many free games, only about 1 to 5 out of every 100 players buy something. Reports vary a lot, and some games get less than 1.
Example: 10,000 players with a 3% conversion rate means 300 paying players.
Read the numbers
1Garden Defense, first month (made-up)2Players 8,0003Players who bought 1604Revenue after store share $480
What was Garden Defense's conversion rate this month?
- 0.2%
- 2%
- 5%
- 20%
Show the answer
2%
160 out of 8,000 is 2 out of every 100, so the conversion rate is 2%. That is within the typical range for free games.
One-time and ongoing purchases
- One-time unlocksBuy once, keep forever: the Frozen Garden world, "Remove ads". A Restore purchases button brings them back on a new phone.
- ConsumablesUsed up and bought again, like a pack of 500 seeds. They earn over and over, so they need the most care to stay fair.
- Subscriptions and season passesPay every month or season until someone cancels. They renew by themselves, so in games kids play a parent must agree, and cancelling must be easy.
Quick check
A subscription keeps charging every month until someone cancels it.
- True
- False
Show the answer
True
Subscriptions renew automatically. That is steady revenue for a studio, and exactly why a parent must agree to one and why cancelling must be easy.
The free part must be great
Think about where paying players come from: they are free players who loved the game. If the free part is boring or stingy, players leave before they ever think of buying.
And the 95 or more who never pay still matter. They watch rewarded ads, leave reviews and bring their friends. In freemium, a great free game is the business plan.
Never pay to win
- Fine: things that look coolA golden skin for Sprig, a new garden theme. Fun to own, no advantage.
- Fine: more to playAn extra world, like the Frozen Garden. More game, same fair rules.
- Not fine: power for moneyA plant only money can buy that beats every wave. On a leaderboard, money would beat skill.
Spot pay to win
What if we sell a $4.99 Thunder Sprinkler that wipes out any wave instantly? Leaderboard players would totally buy it.
What should the team do with Kai's idea?
- Ship it, because more revenue is always better
- Skip it: it is pay to win. Sell a cosmetic golden sprinkler skin instead
- Ship it at $49.99 so fewer people buy it
Show the answer
Skip it: it is pay to win. Sell a cosmetic golden sprinkler skin instead
Buying the leaderboard makes free players feel cheated, and they leave. A cosmetic item earns money without changing who wins.
Measuring freemium
Three numbers tell us how the model is working:
- Conversion rate: share of players who buy.
- ARPU (average revenue per user): revenue divided by all players. $480 from 8,000 players is $0.06 each.
- Retention: how many players come back after 1 day, 7 days, 30 days.
Firebase Analytics tracks them. Reading the numbers (Stage 9) goes deep on retention, and Unit economics (Stage 10) on ARPU.
Next: inside the item shop
Freemium players buy items and sometimes in-game currency, like gems. How do gem packs work, how much reaches us, and how do we keep the shop fair?
Bolt says: Next lesson: how in-game purchases pay.
Fact-checked 9 October 2026
- GamesBeat: Swrve finds only 1.35% of players spend money in mobile games gamesbeat.com
- Unity: 2023 Mobile Growth and Monetization Report images.response.unity3d.com
- Apple Developer: App Store Small Business Program developer.apple.com