How Does Humble Bundle Make Money?
Established in 2010 in San Francisco, Humble Bundle has become a head-turner in the gaming industry. This is an online marketplace for developing, producing, and marketing video games. Interestingly, the most attractive feature of this site is its heavily discounted digital games and products.
Then, how does Humble Bundle make money? Initially, the platform sold bundles of games starting from $1. However, the platform has expanded to sell music, e-books, software, etc. You might be thinking of how the site makes any profit if it sells products so cheaply. Indeed, the site is also popular for donating some of its proceeds to different charities.
Let’s see how Humble Bundle works and makes money in this highly-competitive gaming industry.
A Quick Overview of Humble Bundle
Let’s learn more about the platform before checking how Humble Bundle makes money. Humble Bundle is the place where bundled video games are sold at a price decided by the buyer. A portion of the buyer pays goes directly to a charity and the game developer.
Founded by John Graham and Jeff Rosen, the first Humble Bundle came out in May 2010. It consisted of 6 games worth of $1.27 million. Later, the site included music, e-books, and more, becoming a digital products store. However, IGN acquired Humble Bundle in 2017 without disclosing the deal.
Still, the digital store operates as an independent platform while donating to charities and supporting unknown developers. So, how does Humble Bundle work and make money to pay its developers? Let’s find out.
4 Ways Humble Bundle Makes Money
As you already know, Humble Bundle is a digital store that sells books, game bundles, music, software, and more. The best part is that you will find them at jaw-dropping rates. Sometimes, the discounted prices are up to 90%. Additionally, the store doesn’t force customers to purchase digital items in bundles only.
So, customers can also purchase single products. However, the fundamental deal of bundles is that they come with their own set of tiers, and only buyers can unlock them by paying a definite price, such as:
- Customers determine what to pay for the bundle, and the minimum purchase price is $1. This is called ‘Pay What You Want’ but reveals the least content.
- In addition, you can opt for the ‘Beat The Average’ deal that lets you purchase the first-tier content. This means that you can own the best items from the particular bundle. However, you have to pay more than average customers pay for unlocking the bundle.
- On the other hand, unlocking the highest and third-tier will get you access to premium and additional content.
In addition, customers get the portion to be divided between charities and product developers. As a customer, you can specify the percentage of the price that should go to the product developer, charities, or Humble Bundle while checking out. Humble Bundle works with Make A Wish, WWF, Worldreader, GamesAid, etc.
So, how does Humble Bundle make money when it offers games at cheap rates and donates to different charities? Reportedly, Humble Bundle makes a profit via the 4 following sources:
1. Donations
The first and foremost source of Humble Bundle’s income is through donations it receives for game bundles. The donation to Humble Bundle refers to the price customers wish to pay for every bundle they buy. Although customers have to split the donation among developers and charity organisations, they can send a portion of the proceeds to Humble Bundle.
In fact, Humble Bundle encourages donations by publishing a list of top contributors. Moreover, entities can spend more on Humble Bundle to make it to the top of the list and represent themselves as charitable. The more customers purchase from Humble Bundle, the more the digital store makes revenue.
2. Commissions
Apart from donations, much of Humble Bundle’s revenue originates from commissions. These commissions come from the Humble Store, the platform’s online storefront. As a matter of fact, items sold in the Humble Store are available at great discounts.
Every time a user purchases anything from this site, the store charges the user with a 25% commission. Now, the 15% of this goes to charities. The rest of the commission straightly goes into the fund of Humble Bundle.
3. Subscriptions
How does Humble Bundle make money besides the above-mentioned methods? Users preferred Humble Monthly, a subscription-based offering from the same digital store. This subscription allowed users to access different games in exchange for a monthly charge.
The platform reported in 2019 that it had more than 400,000 users to this subscription. However, the online store rebranded the same subscription-based service as Humble Choice. Now, users must pay a flat $12 monthly to access intended games. 5% of this charge goes straight to charities.
4. Humble Games
Are you aware of Humble Games? Humble Bundles operates this unit as part of its business model. What does Humble Games do, by the way? This platform encourages corresponding users to publish and promote their developed games.
Like every other platform of Humble Bundle, this is available with upfront financing. Additionally, this facility has a team of developers. Game developers can get full ownership of their intellectual property on Humble Games. Developers have to pay Humble Bundle a portion of their games’ sales.
How Much Money Does Humble Bundle Make?
As a curious user, this query might pop up in your mind. However, Humble Bundle never discloses its financial records to their customers or the public as this is a private company. However, Greg Lipstein wrote about the business model of Humble Bundle back in 2015.
According to the writing, Humble Bundle had already made $200 as its lifetime profit in 2015. However, the article also mentioned that $50 million of that net profit went to charitable organisations.
What’s the current worth of Humble Bundle? The exact figure is out of anyone’s league because the company is privately held. Edmund McMillen, the popular developer behind Super Meat Boy and Binding of Isaac, shared that bundles were not as successful as they seemed.
Additionally, THQ collaborated with the Humble Bundle digital store and faced financial difficulties. In fact, the company had to let go of many developers. Still, its stock price rose 30% after the sale.
How Will Humble Bundle Make Money in The Future?
Hopefully, the guide helps you understand how Humble Bundle works and makes money. Humble Bundle might promote its storefront as a competitor against GOG.com, Epic Games, and Steam. On the other hand, the platform has already started to publish its games. So, this can be another added source of income. Humble Bundle would publish their games on Xbox and PlayStation for more revenue.
