What is the Humble Bundle?
Humble Bundle is a digital storefront for video games. Initially, this storefront developed from its original offering of Humble Bundles. These bundles include collections of games sold at a pre-determined price from the purchaser. A portion of it went towards a charity, while the rest got paid to the game developers. It supports various charities, including Action Against Hunger, Child’s Pay, charity: water, the American Red Cross, etc.
Humble Bundle started its operations in San Francisco, California, in 2010. This platform was an idea from John Graham and Jeffrey Rosen. Before Humble Bundle, its founders had also worked on another venture together. They were well-known for founding Wolfire Games in 2008, an independent gaming studio. At the time, they faced various challenges in distributing their games as an indie developer. They also had many friends who complained of similar issues.
These challenges led them to launch Humble Bundle, which acted as a marketing channel. At the time, it focused on independent developers with the added benefit of contributing to charities. The platform garnered significant attention in the media due to its unique features. This hype allowed it to launch to a great affection and welcome. In May 2010, when the platform launched, it only included five pre-selected indie games.
When Humble Bundle launched, it became an instant success. At the time, the company received donations of over $1 million from over 100,000 users. The developers continued to work on launching a game at Wolfire Games. Later, they incorporated Humble Bundle as a separate entity and focused on it full time. In the same year, Humble Bundle launched its second bundle as well. This bundle also faced great reception among users.
The founders continued working on the Humble Bundle. They also received funds from various seed rounds from well-known investors. Similarly, the founders decreased the bundle release time by a month, increasing its revenues further. At the time, the company also include other categories as a part of its bundles. These changes also allowed Humble Bundle to attract many indie developers and major game studios.
In 2013, Humble Bundle also expanded its offerings by launching its storefront. This store was similar to other competitors, which primarily included Steam. Throughout the years, the platform has developed its storefront with innovative features. Although many worried that Humble Bundle would lose its cause due to these changes, it remained the same. However, it has also received some backlash over the years.
How does Humble Bundle work?
Humble Bundle is a platform that collaborates with publishers to receive discounts for games and other items. Once it gets those discounts, it bundles those items and offers them as a combined item to the user. Usually, the price offered to the user is lower than what they would pay for those items individually. However, users do require registration to use the platform first. Nonetheless, creating an account gives them access to a convenient library to store their purchases.
Creating an account on Humble Bundle is optional. However, it is a crucial part of how it works. Users can go to the Humble Bundle website to create an account. This page will require them to provide their email address and choose a password. During this process, they must also agree to the Terms of Service and Privacy Policy. Similarly, users must confirm they are at least 13 years old.
After completing the process, users can continue. However, they will get redirected to an activation page, asking to verify their email address. Humble Bundle will send them an email at their chosen address. Users must open that email and follow the link to continue the process. If they don’t get the email, they can contact Humble’s support team for assistance.
Once users click the activation link, they will get redirected to the platform. It will also log them into their new account. Subsequently, users can go to the main website to buy bundles as normal. This process is similar for non-registered users. However, the account allows registered users to access their purchased items later. Users can log in to this account at any time.
Apart from the account feature, Humble Bundle also offers various tiers. These include the “Pay What You Want”, “Beat the Average”, and an additional tier. Usually, each comes with a price to the user. Each of these tiers has its benefits and drawbacks. Users can choose from these and continue using the platform as needed.
What is the Humble Bundle business model?
Humble Bundle primarily operates through the e-commerce business model. However, the platform also acquires physical games to resell. The platform also sells licenses to those games at a significantly lower price, in collaboration with the publisher. Apart from popular games, the store also welcomes game developers that offer their games on Steam.
Humble Bundle signs deal with less popular game companies as well. These are known as indie game developers who don’t have similar facilities as well-established brands. Consequently, those developers get exposure to a new audience. On the other hand, Humble Bundle generates money from the games they sell through its platform. Most of its users also appreciate the exposure provided to those indie developers.
Primarily, Humble Bundle operates its storefront, where it sells games and other items. In this regard, its business model is similar to Steam. The company offers developers the platform to connect with gamers who can buy their games. This model falls under the definition of the C2C business model. However, it does not explain the revenue streams for the Humble Bundle.
Humble Bundle operates a donation- and subscription-based business model. These sources provide the company with the money required to run operations. On top of that, it also charges game developers a commission for each sale. Some of these commissions go to various charities, while the platform also keeps a portion. Together, these features make up the Humble Bundle business model.
How does Humble Bundle make money?
Humble Bundle makes money from various sources. These sources relate to the Humble Bundle business model, as mentioned above. An explanation of each of these sources is as follows.
Donations
One of the most critical income sources for Humble Bundle is the donations it receives from users. These donations are apart from the amount Humble Bundle withdraws from sales. Essentially, users can donate to the platform at every checkout. Humble Bundle also offers incentives to those users, such as top contributor lists, etc. The company does not specify how it handles these donations.
Commissions
Commissions are another significant income source for the Humble Bundle. These commissions relate to the Humble Store, the platform’s online storefront. As mentioned above, the items sold in this store come with significant discounts. Every time the platform sells a bundle, it charges a 25% commission. 15% of these go to charities, while the residual 10% are revenues for the Humble Bundle.
Subscriptions
Humble Bundle also launched a subscription-based offering known as Humble Monthly. This feature allowed users to access various games in exchange for a monthly fee. In 2019, the platform reported having over 400,000 to this feature. Recently, Humble Bundle has rebranded this source as Humble Choice. Users must pay a flat $12 fee every month to access those games. 5% of these funds go to charities.
Humble Games
Humble Bundle also operates a unit known as the Humble Games. This feature allows users to work with the platform to publish and promote their games. Usually, it also comes with upfront financing and a team provided to the developer. On top of that, developers get 100% of their ownership and intellectual property. However, they must pay Humble Bundle a percentage of the sales for their games.
Conclusion
Humble Bundle is an online storefront that bundles games and other items and sells them to users. These bundles come at a significantly lower price compared to individual goods. Overall, using the platform is straightforward and does not require registration. However, registered users can receive some perks. The Humble Bundle business model involves various revenue streams. Some of the ways it makes money are available above.
