The Success of the Freemium Business Model. How Riot Games flourishes with a free to play game

Falko Lucht ()
Additional contact information
Falko Lucht: Leuphana Universität Lüneburg, Luneburg, Germany

Manager Journal, 2019, vol. 29, issue 1, 114-124

Abstract: Freemium is an emerging business model mostly used in the online software market and mobile application market that offers a free basic version and premium version of a product or service. One of the most successful companies that uses the freemium business model is Riot Games Inc. with their multiplayer online game League of Legends. The growing number of successful freemium businesses requires scientific analysis and evidence. In this paper, first we analyze the general concept of the business model,especially focussing on the benefits of paying and non-paying customers and second, we analyze the fastgrowing and still young market of eSports which contributes to the success of the game. The finding then will be compared to the actual business model of Riot Games. The results show that Riot Games success is based on several factors that are all affiliated with the freemium business model: micropayments, sunk cost and network effects, data collection and sophisticated reward systems that foster customer retention.

Keywords: Freemium Business Model; Riot Games; Network Effects; eSports (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://manager.faa.ro/download/1003_29_m_114_124.pdf (application/pdf)
http://manager.faa.ro/en/article/The-Success-of-th ... -play-game~1003.html (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:but:manage:v:29:y:2019:i:1:p:114-124

Access Statistics for this article

Manager Journal is currently edited by Paul Marinescu

More articles in Manager Journal from Faculty of Business and Administration, University of Bucharest Contact information at EDIRC.
Bibliographic data for series maintained by Cosmin Catalin Olteanu ().