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How do game websites make money?

How do game websites make money?
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I remember when I first learned about game websites in grade school. You guys know what I'm talking about... Websites like Y8 or Girl Games that offer a ton of those micro games on their website. I am a big fan of the time management games where you can be a waitress. I know, I'm a lame. Anyway, a lot of these games were created by a variety of people for pure enjoyment and so that they could make money, obviously. 

I found myself playing some of these games today and I started wondering how the creators of websites like these make money, in addition to how do some of the creators of the actual games make money themselves. So I took sometime to analyze a variety of websites and came to some different conclusions.

Question: How do game websites make money?

They make money through advertisements.

Some of these games have advertisements that you have to either watch or they have advertisements as side banners. I am wondering about how the installation process is done within watching ads on the game itself, but these advertisements are some how embedded into the game player before you are allowed to play the games.

What kind of advertisements do these game websites use to make money?

I think it would be ideal to use CPM or CPC advertisements.

CPM = Cost Per Thousand Impressions

CPC = Cost Per Click

CPM would be the better choice in my opinion because every time a person visits a page on a website to find a game to play or play the actual game, that would count as a view towards the thousand impressions. However CPC would be better if there was a higher chance of people clicking advertisements, for example if the advertisements were directed at games similar to the ones being played on the screen... People playing the games would most likely click those ads. A combination of both would be promising overall within producing a decent amount of profit.

How do game websites make money?
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Would it be easy to create a gamer website that makes money?

I think that it would be possible to create a gamer website, but the person would have to gain access to games through certain copyrights I'm assuming. It is possible that someone could download a game and upload it onto their website without having a person's say so... which would cause them to run into some legal problems unless the game creator did not mind it or the game could be embedded into a website with direct connection to the creator's site. However there are websites where people can acquire games and put them on their website for their viewers to play.

Another big factor within creating a gamer website would be how well it is marketed. Years ago when people would create websites on the internet, it did not take much to gain traffic because it wasn't too much competition. However now, there are so many websites that are trying and creating similar things. The ways in which a person markets their website is what makes or breaks whether it will be successful.

Do any of you guys play games on these websites?
What are your favorite ones?
Would you start your own game website?
Leave a comment down below and let me know what you think.