Games are made available freely so as to generate web traffic to the site, which generates a small amount revenue each time users view the site, however this revenue is generated on each visit and does not require any purchase from players.
There are two possible routes for this: self-hosting and third-party hosting.
With self-hosting, the creator gains all the revenue from advertising and does not require to share it with anyone else. However he has to pay for the hosting of his application, manage the advertisements (usually through Google's AdSense) and handle publicity of his game.
With third-party hosting, the creator can publish his game to one (or more) of the many game sites which will host if for free, manage the advertisements and help with the publicity of the game by listing it on their site (and sometimes providing reviews, ratings and usage statistics). In exchange for this, the revenue from advertising is shared.
Here are some such game sites:
Newgrounds: They have been paying for embedding advertisements into Flash games for a while, and recently (on 14 May 2009) started paying for any game (or content like animations, music, or even blogs) hosted on their site.
If you make browser games, you know the Flash portal Newgrounds. They’ve had their own embedded ads service since about May 2008, but now they’ve kicked it up a notch. Newgrounds now automatically share their ad revenue whether you sign up for the ads or not.
For example- I made a game recently and got it sponsored by a third party. The terms were that I wasn’t allowed to embed any ads in the game. So I didn’t, there are no ads in the game. Now Newgrounds will pay me regardless just because my game’s on their site. Not just games either, ad impressions come from audio submissions, animations and even my damn userpage. I made 3 cents for having a blog. Thanks!
[Source: TIGSource.com]
GameJolt: Unlike other sites, they deal with not only Flash games but freeware too. They are just one of the new independent gaming sites that have been recently appearing.
Their new Ad Revenue Sharing plan will go into closed beta very soon, at which time every member who has signed up to the site and uploaded at least one game will go into a hat to join the beta and start earning a whopping 50% of the ad monies.
[Source: IndieGames.com]
Kongregate: A flash game site that has been around since 2006, they have built quite a reputation for themselves. Sadly, unless you host on their site exclusively and use their API, the percentage of revenue that they give you is much lower than other sites.
By default, all developers receive 25% of the ad revenue generated from their games. This includes all ads within the games and any potential ads on the game page that may be added in the future. Games that are integrated with all of Kongregate’s APIs earn an additional 10%, and games that are offered exclusively on Kongregate’s site earn an additional 15%. Thus, it’s possible for a game to earn 25%, 35%, 40%, or 50% of ad revenue.
[Source: Kongregate.com]
BigPoint: They host both Flash and downloadable games, however are very selective on game submissions. Their revenue model is not visible and probably depends on the type of game.
We'll take care of the success of your game. In addition, we offer promising developers interesting financing models.
You profit from business and marketing cooperations for single titles or
for your entire portfolio.
In this way we can support you with professional advertising campaigns and an established distribution network with some of the largest media partners and portals, such as Pro7Sat1 AG, Yahoo, Web.de, etc.
[Source: BigPoint.net]
There are a lot more of such sites. And while you will not make a ton of money, they are a good way to build a reputation for yourself or your indie company.
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