humble-bundle-business-model

How Does Humble Bundle Make Money? The Humble Bundle Business Model In A Nutshell

Humble Bundle is an online marketplace for the purchase of bundled video games. The platform was founded in 2010 by Jeff Rosen and John Graham, who met in elementary school. Humble Bundle revenue generation depends on the donations it receives for game bundles. Humble Choice is a subscription service giving customers access to several games for a flat monthly fee. Humble Store is an online marketplace enabling users to purchase games in a more traditional process. Humble Games also works with developers to have their games published and then promoted True to its origins.

History of Humble

Humble Bundle is an online marketplace for the purchase of bundled video games. These games are sold at a price determined by the buyer with a portion of the proceeds going to charity and the game developer.

The platform was founded in 2010 by Jeff Rosen and John Graham who met in elementary school. In 2003, Rosen had started a development company with his brother called Wolfire Games while the pair were still in high school. After graduating in 2008, the brothers sought to assemble a team and make Wolfire a dedicated development studio. 

As an independent producer, the founders experimented with promotional strategies to get their products noticed. Initially, they teamed up with developer Unknown Worlds to promote the new release Natural Selection 2. The game would be offered for a limited period and at a significant discount if pre-ordered with Overgrowth, a game Rosen was developing. The experiment proved successful, with both companies seeing record sales days.

Bundling was then combined with the pay-what-you-want model after Rosen saw it employed to great effect elsewhere. The first Humble Bundle launched in May 2010, with a collection of six games netting $1.27 million in just ten days. Rosen and Graham then decided to join start-up accelerator Y Combinator and focus on the bundling strategy full-time. The platform expanded to include music bundles, games, and a digital products store.

In 2017, Humble Bundle was acquired by media giant IGN in an undisclosed deal. The company continues to operate as an independent organization with a focus on charitable donations and promoting unknown developers.

Humble Bundle revenue generation

Donations

Humble Bundle revenue generation depends on the donations it receives for game bundles.

It’s helpful to note that donations are defined as the total price a customer wishes to pay for each bundle. The donation as such is then split amongst the charity and the game developer. In some cases, customers can opt to send a portion of the donation to Humble Bundle itself.

To encourage donations, the company publishes a list of top contributors. Some entities have been known to spend a lot of money to appear on the list and promote themselves as charitable. More importantly, this enables Humble Bundle to make more money.

Subscription service

Humble Choice is a subscription service giving customers access to several games for a flat monthly fee.

For $12/month, additional features include 20% off purchases in the Humble Store (see below). Subscribers also get access to Trove – a collection of Humble-owned games and other classics.

Humble Store

Humble Store is an online marketplace enabling users to purchase games in a more traditional process.

For each sale, revenue is again split between three parties:

  1. 75% to the game developer.
  2. 15% to Humble Bundle.
  3. 10% to charity.

Humble Games

True to its origins, Humble Games also works with developers to have their games published and then promoted. The company provides initial financing and a team to help produce and market the finished game. 

Pricing for this service is based on a contractual agreement between the company and the developer. Revenue may be in the form of royalty fees or a commission for each sale facilitated on the Humble Bundle platform.

Key takeaways:

  • Humble Bundle is an online marketplace for the production, development, marketing, and promotion of video games. The platform was created by Jeff Rosen and John Graham in 2010 to promote games as an independent developer.
  • Humble Bundle accepts donations for each game bundle it sells. This donation is then split with the game developer and a charity in a proportion determined by the buyer.
  • Humble Bundle makes money by offering a monthly subscription service giving users access to additional games and discounts. It also makes money through the sale of single games in the Humble Store digital marketplace.

Read also: Inside The Epic Games Empire, How Much Money Has Fortnite Made?Gaming IndustryEA Sports Business ModelHow Does Discord Make Money, The Free-To-Play Business Model, The Nintendo Business Model, How Does Unity Work And Make Money, Roblox Business Model.

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Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"