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.
Aspect
Description
Overview
Humble Bundle operates as a digital storefront that offers video games, software, e-books, and other digital content in a unique “pay-what-you-want” model. The company’s business model is built on combining charitable giving, customer choice, and affordability, creating a platform that appeals to gamers, consumers, and philanthropists alike.
Bundle Sales
Humble Bundle curates and sells bundles of digital products, often grouped by themes, genres, or publishers. Customers can choose the price they want to pay for a bundle and receive the included content. The pricing tiers typically include basic, average, and premium levels, with additional content unlocked at higher price points. Customers can also allocate a portion of their payment to charities.
Charity Integration
Humble Bundle incorporates a strong charitable component into its model. Customers have the option to designate a portion of their payment to selected charities, with a percentage of the proceeds from each sale going to charitable organizations. This approach aligns with the company’s mission of “giving games, doing good.”
Game Publishers and Developers
Humble Bundle collaborates with game publishers and developers to feature their products in bundles. Publishers often see this as a way to promote their games, reach a wider audience, and support charitable causes simultaneously. The exposure generated by Humble Bundle can lead to increased sales and recognition for game creators.
Monthly Subscription
Humble Bundle offers a monthly subscription service called the “Humble Choice” that provides subscribers with access to a curated selection of games each month. Subscribers pay a fixed fee to receive a bundle of games, with the ability to choose and keep a set number of titles. This subscription model creates a steady revenue stream for the company.
Digital Storefront
In addition to bundles, Humble Bundle operates a digital storefront where customers can purchase individual games and software titles. This storefront allows users to browse and buy products at regular prices, similar to other digital distribution platforms like Steam and Epic Games Store.
Customization and Personalization
Humble Bundle offers customers the ability to customize their bundles by selecting which products they want to include. This level of choice and personalization sets it apart from traditional digital storefronts. It also provides flexibility for customers with specific preferences.
Platform Integration
Humble Bundle integrates with gaming platforms like Steam, providing customers with keys to redeem their purchased games on those platforms. This integration enhances the convenience of using Humble Bundle for gamers who are already part of these ecosystems.
Challenges and Competition
Humble Bundle faces challenges related to competition from other digital storefronts and subscription services. Ensuring that a significant portion of proceeds goes to charity while maintaining profitable partnerships with developers is an ongoing challenge. Additionally, customer retention and subscriber growth are essential for long-term success.
Future Growth Strategies
Humble Bundle’s future growth strategies may involve: – Diversifying Content: Expanding the range of digital content beyond games and software. – Global Expansion: Entering new markets and reaching international audiences. – Charity Partnerships: Strengthening ties with charitable organizations and promoting social responsibility. – Innovation: Exploring new subscription offerings and business models.
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 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.
Value Proposition:
Charitable Impact: Humble Bundle offers users the opportunity to support charitable causes while purchasing digital content, empowering consumers to make a positive difference in the world through their entertainment spending. A portion of each purchase is donated to charitable organizations, allowing users to contribute to meaningful causes while enjoying their favorite games, books, software, and more.
Flexible Pricing: Humble Bundle provides a flexible pricing model that allows users to pay what they want for bundles of digital content, giving consumers control over how much they spend and the value they receive. Users can choose their own price and allocate a portion of their payment to charity, creators, and Humble Bundle, enabling personalized and customizable transactions.
Curated Content: Humble Bundle curates bundles of digital content, including video games, e-books, software, and other digital products, offering users access to a diverse selection of high-quality titles and products at discounted prices. Curated bundles appeal to different interests, preferences, and demographics, catering to a broad audience of gamers, readers, and enthusiasts.
Cross-Platform Access: Humble Bundle provides users with cross-platform access to digital content, allowing them to redeem and download products on multiple devices and platforms, including PC, Mac, Linux, Android, and more. Cross-platform compatibility ensures that users can enjoy their purchases across various devices and ecosystems, enhancing convenience and accessibility.
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:
75% to the game developer.
15% to Humble Bundle.
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.
Marketing Strategy:
Bundle Promotions: Humble Bundle promotes its curated bundles of digital content through marketing campaigns, email newsletters, and social media channels. Bundle promotions highlight the featured titles, discounts, and charitable contributions associated with each bundle, encouraging users to make a purchase and support charitable causes.
Charitable Giving: Humble Bundle emphasizes its charitable giving initiatives as a core part of its marketingstrategy, highlighting the impact of user contributions on charitable organizations around the world. Charitable giving appeals to socially conscious consumers and motivates users to participate in bundle promotions and subscription services to support worthy causes.
Content Curation: Humble Bundle focuses on curating high-quality bundles of digital content that appeal to different audiences and interests, leveraging partnerships with publishers, developers, and creators to secure exclusive deals and featured titles. Curated bundles are promoted as limited-time offers, creating a sense of urgency and encouraging users to take advantage of discounted prices.
Community Engagement: Humble Bundle engages with its community of users through forums, social media platforms, and community events, fostering a sense of belonging and participation among its audience. Community engagement initiatives include developer interviews, live streams, game tournaments, and fan conventions, building rapport with users and strengthening brand loyalty.
Distribution Channels:
Humble Bundle Website: The primary distribution channel for Humble Bundle is its official website, where users can browse, purchase, and redeem digital bundles of content, as well as subscribe to Humble Choice and access the Humble Store. The website serves as the central hub for all Humble Bundle offerings, providing users with a convenient and user-friendly platform for discovering and acquiring digital products.
Email Marketing: Humble Bundle utilizes email marketing campaigns to communicate with users, promote bundle promotions, announce new releases, and deliver personalized recommendations based on user preferences and purchase history. Email newsletters and targeted communications help drive engagement, increase conversion rates, and retain subscribers over time.
Social Media Platforms: Humble Bundle maintains an active presence on popular social media platforms such as Twitter, Facebook, Instagram, and YouTube, where it shares updates, announcements, promotions, and user-generated content with its followers. Social media channels serve as a valuable marketing tool for reaching and engaging with a diverse audience of gamers, readers, and enthusiasts.
Affiliate Partnerships: Humble Bundle collaborates with affiliate partners, including content creators, influencers, bloggers, and media outlets, to expand its reach and acquire new customers through referral traffic and promotional campaigns. Affiliate partnerships enable Humble Bundle to leverage existing networks, amplify brand exposure, and drive traffic to its website and digital storefront.
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.
Key Highlights:
Humble Bundle Overview: Humble Bundle operates as a digital storefront offering video games, software, e-books, and other digital content in a unique “pay-what-you-want” model. Revenue generation relies on donations for bundles, subscription services, and sales in the Humble Store.
Bundle Sales: Humble Bundle curates and sells bundles of digital products, allowing customers to choose their price and allocate a portion to charities. This model promotes affordability, customer choice, and charitable giving.
Charity Integration: A strong charitable component is integrated into Humble Bundle’s model, allowing customers to support selected charities with their purchases. A percentage of proceeds from each sale is donated to charitable organizations.
Game Publishers and Developers: Humble Bundle collaborates with game publishers and developers to feature their products in bundles, providing exposure and supporting charitable causes simultaneously.
Monthly Subscription (Humble Choice): Humble Bundle offers a monthly subscription service, Humble Choice, providing subscribers with access to curated selections of games for a fixed fee, enhancing revenue stability for the company.
Digital Storefront (Humble Store): The Humble Store operates as an online marketplace for individual game purchases, similar to other digital distribution platforms, generating revenue through sales of single games.
Customization and Personalization: Customers can customize their bundles by selecting preferred products, offering a personalized experience not found in traditional digital storefronts.
Platform Integration: Humble Bundle integrates with gaming platforms like Steam, enabling users to redeem purchased games conveniently.
Challenges and Competition: Humble Bundle faces challenges related to competition from other digital storefronts and subscription services, as well as ensuring charitable contributions while maintaining profitability.
Future Growth Strategies: Future growth strategies may involve diversifying content, global expansion, strengthening charity partnerships, and exploring innovative subscription offerings.
History of Humble Bundle: Founded in 2010 by Jeff Rosen and John Graham, Humble Bundle began as an experiment to promote games as an independent developer. The platform’s unique model quickly gained popularity, offering curated bundles and supporting charitable causes.
Revenue Generation: Humble Bundle generates revenue through donations for bundles, subscription services (Humble Choice), sales in the Humble Store, and partnerships with game developers (Humble Games).
Marketing Strategy: Humble Bundle’s marketingstrategy focuses on promoting bundle promotions, emphasizing charitable giving, curating high-quality content, engaging with the community, and leveraging distribution channels such as the website, email marketing, social media, and affiliate partnerships.
Distribution Channels: Humble Bundle distributes its products primarily through its website, email marketing, social media platforms, and affiliate partnerships, providing users with convenient access to digital content.
Key Takeaways: Humble Bundle’s key value propositions include charitable impact, flexible pricing, curated content, cross-platform access, and community engagement, making it a unique and popular destination for digital entertainment enthusiasts.
A platform business model generates value by enabling interactions between people, groups, and users by leveraging network effects. Platform business models usually comprise two sides: supply and demand. Kicking off the interactions between those two sides is one of the crucial elements for a platform business model success.
A marketplace is a platform where buyers and sellers interact and transact. The platform acts as a marketplace that will generate revenues in fees from one or all the parties involved in the transaction. Usually, marketplaces can be classified in several ways, like those selling services vs. products or those connecting buyers and sellers at B2B, B2C, or C2C level. And those marketplaces connecting two core players, or more.
A network effect is a phenomenon in which as more people or users join a platform, the more the value of the service offered by the platform improves for those joining afterward.
In an asymmetric businessmodel, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus have a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility.
In an asymmetric businessmodel, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus having a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility. This is how attention merchants make monetize their business models.
The wholesale model is a selling model where wholesalers sell their products in bulk to a retailer at a discounted price. The retailer then on-sells the products to consumers at a higher price. In the wholesale model, a wholesaler sells products in bulk to retail outlets for onward sale. Occasionally, the wholesaler sells direct to the consumer, with supermarket giant Costco the most obvious example.
A retail business model follows a direct-to-consumer approach, also called B2C, where the company sells directly to final customers a processed/finished product. This implies a business model that is mostly local-based, it carries higher margins, but also higher costs and distribution risks.
A B2B2C is a particular kind of business model where a company, rather than accessing the consumer market directly, it does that via another business. Yet the final consumers will recognize the brand or the service provided by the B2B2C. The company offering the service might gain direct access to consumers over time.
The term “crowdsourcing” was first coined by Wired Magazine editor Jeff Howe in a 2006 article titled Rise of Crowdsourcing. Though the practice has existed in some form or another for centuries, it rose to prominence when eCommerce, social media, and smartphone culture began to emerge. Crowdsourcing is the act of obtaining knowledge, goods, services, or opinions from a group of people. These people submit information via social media, smartphone apps, or dedicated crowdsourcing platforms.
While the term has been coined by Andrew Lampitt, open-core is an evolution of open-source. Where a core part of the software/platform is offered for free, while on top of it are built premium features or add-ons, which get monetized by the corporation who developed the software/platform. An example of the GitLab open core model, where the hosted service is free and open, while the software is closed.
Open source is licensed and usually developed and maintained by a community of independent developers. While the freemium is developed in-house. Thus the freemium give the company that developed it, full control over its distribution. In an open-source model, the for-profit company has to distribute its premium version per its open-source licensing model.
The freemium – unless the whole organization is aligned around it – is a growth strategy rather than a business model. A free service is provided to a majority of users, while a small percentage of those users convert into paying customers through the sales funnel. Free users will help spread the brand through word of mouth.
A freeterprise is a combination of free and enterprise where free professional accounts are driven into the funnel through the free product. As the opportunity is identified the company assigns the free account to a salesperson within the organization (inside sales or fields sales) to convert that into a B2B/enterprise account.
In a franchained business model (a short-term chain, long-term franchise) model, the company deliberately launched its operations by keeping tight ownership on the main assets, while those are established, thus choosing a chain model. Once operations are running and established, the company divests its ownership and opts instead for a franchising model.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
Discover more from FourWeekMBA
Subscribe now to keep reading and get access to the full archive.
