There are adverts about games that say you can generate ridiculous amounts of money just by doing/playing x. Although this is obviously not efficient for the user, how do companies that claim these things gain profit?
In: Other
They’ve calculated that the economic profit is worth giving you the money to do X. Say you invite 10 friends and they give you $1. Well if they can convert 20% of new users and the average user spends $10, they’ve theoretically just earned $2. So they get to keep a dollar after giving you a dollar.
That’s just the 5 year old explanation btw. It can get very complex.
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