How do free games make money?

I knew a small part of this already, but Vox does a much better job of explaining the complex algorithms and thought processes behind "free" games on mobile devices and how these free games make money. It's a lot of in-app purchases (duh) but mostly from a very small group of people (hmm!).

Case in point: Despite just a week or so from release, Pokemon Go has already made over $14 million dollars. The game is free.