How Do Free Apps Make Money?

How Do Free Apps Make Money?

Written by: Anders Lee

I recently was on the App Store and found a new game: Dream League Soccer 2026. It cost me nothing to download. Then it got me to thinking, Wait a second. If the game is free, how does the company that made it earn any money at all? Someone had to design it, draw the characters, write the code, and pay for the computers that keep it running online. So where does the money actually come from?

After playing for about twenty minutes, it decided to show me. A little box popped up: "Starter Bundle: Unlock Jude Bellingham, 2500 coins, and 375 gems for just $4.99!"

It turns out "free" apps are one of the smartest business tricks around, and they are everywhere. About 97 out of every 100 apps in the Google Play Store are free to download. Here are the three main ways they really make money.

1. Ads

The short videos for a different game that pop up between levels are not just for show! Companies pay to put those ads in front of you. The app doesn't charge you a penny, but it charges other businesses to show you their stuff. If millions of kids see one ad, that adds up to a lot of money fast.

2. In-App Purchases

This is that $4.99 pop-up. The game is free, but the fun extras cost money, like new outfits, extra coins, a bonus level, or more lives when you run out. In free games, most players never spend a cent. One study found that fewer than 2 out of every 100 players bought anything at all, and a tiny group of big spenders, nicknamed "whales," covered about half of all the money. I must admit I might be one of them.

3. Going "Premium"

Some apps are free with ads, but you can pay a monthly fee to remove the ads or unlock everything. Businesses even have a word for this free-and-paid combo: freemium. Free to start, but premium if you want the good stuff.

So why give the app away at all? Because free is how you get millions of people to try it, and it adds up to real money. In 2024, people around the world spent about $150 billion inside apps on things like extra coins, subscriptions, and no-ad upgrades. A game with ten million free players and only a few paying players is still a big business.

Next time an app says "free," see if you can spot the trick. Is it showing you ads? Selling you extras? Offering a premium version? Once you know what to look for, you start to notice that almost nothing online is truly free. You're either paying with money or with your attention.

References

“Distribution of Free and Paid Android Apps in the Google Play Store from June 2019 to September 2025.” Statista, 16 Sept. 2025, www.statista.com/statistics/266211/distribution-of-free-and-paid-android-apps/. Accessed 21 Aug. 2026.

Sensor Tower. “2025 State of Mobile.” Sensor Tower, Jan. 2025, sensortower.com/blog/2025-state-of-mobile-consumers-usd150-billion-spent-on-mobile-highlights. Accessed 21 Aug. 2026.

Takahashi, Dean. “Only 0.15 Percent of Mobile Gamers Account for 50 Percent of All In-Game Revenue.” GamesBeat, 26 Feb. 2014, gamesbeat.com/only-0-15-of-mobile-gamers-account-for-50-percent-of-all-in-game-revenue-exclusive/. Accessed 21 Aug. 2026.