Have you wondered how free games earn revenue? You download a game without the need to pay for it, but there still is a revenue path. Games can do this through something called game monetization models. These game monetization models help developers monetize while providing the consumer with the game for free.
This blog will cover the different types of game monetization models, how they function, and how game-makers figure out which one is best. We will also highlight some forms of ad-based monetization, in-game advertising, and how to select the best game monetization model.
What Are Game Monetization Models?
Game monetization models are various means for game developers to monetize their games. Many games are free to play nowadays, mainly when it comes to mobile. So rather than asking players to buy the game upfront, developers are using other creative methods to make money.
There are several different types of game monetization models, and each will work differently. That depends on which way of monetization fits the model based on the type of game, the players, and what the developer wants to achieve.
Common Game Monetization Models
Now let’s explore the four most common game monetization models, and see how they provide ways for developers to make money.
- Ad-Based Monetization
Ad-based monetization works by having ads in a video game. It’s probably the most popular monetization model for free games.
There are different types of ads as follows:
Banner Ads – These ads usually take the form of a small ad that exists at the top or bottom of the screen.
Video Ads – Players watch short video clips to earn rewards like coins or lives.
Interstitial (Between Levels) Ads – Ads appear between game levels or appear after a pause in the game.
Players do not spend any money, but the developer earns money for each ad viewed. This is an effective game monetization model for casual gamers that incur large audiences.
- In-Game Advertising
In-game advertising is a sub-type of Ad-based monetization. This method of ad monetization feels less disruptive to the player experience because it is more organic. Instead of pop-up ads in a racing or sports game, a player could see a soda brand billboard or an ad for sneakers, respectively.
In-game advertising can feel less obvious to the player, while ads that interrupt play will give the game less appeal.
In-game advertising is probably one of the more clever game monetization models particularly if the game is intended to be fun.
“In 2023, in-game advertising revenue reached approximately $94.53 billion, highlighting its significant role in the gaming industry’s monetization strategies.”
- In-app purchases
Another common monetization method for games is to sell items in-game. These are called in-app purchases.
Examples include:
- New outfits or characters
- Unlocking levels or skipping difficult parts
- Coins, gems, or power-ups
Some players become so engrossed in the game that they want to spend money. This model can be incredibly lucrative, especially for games that include customization or competition.
- Subscription Model
In this game monetization model, players pay a monthly or yearly fee. For this fee players get:
- Ad-free experience
- Special content
- Exclusive perks or rewards
This model works well for games that plan to roll out regular content. It’s a lot like a Netflix subscription but for your favourite game.
5. Paid Games
While many games are free, some still follow the old-school game monetization model: pay once to download the game. These games usually don’t have ads or extra purchases inside.
It’s a simple model but works best if the game offers high-quality content or a strong storyline.
Choosing the Right Game Monetization Strategy
Choosing a game monetization plan is not a simple task. Developers need to consider:
- Type of game – is it casual, competitive or story-based?
- Target audience – are the player’s kids, teens or adults?
- How often do players come back – will players open the game every day or once in a while?
For example, a simple puzzle game may rely on ad-based monetization, because players tend to come back every day and a short ad won’t annoy them. While an RPG may rely more on in-app purchases because players want to be able to purchase more characters/builds/tools/whatever.
An effective game monetization plan is one that keeps players happy and also makes enough money to allow developers to grow and update the game.
Final Thoughts
When it comes to mobile gaming, the choice of game monetization models is an important one. It often determines whether games are successful or fade into obscurity. Whether it is ad monetization, in-game advertising, or selling items in the game, each form of game monetization has its own merits. For a better understanding of some of the best game monetization models, Apptrove is surely a saviour.
By understanding game monetization models, players can see how games can be free and fun, and developers can earn revenue from the player’s fun experiences and continue building their experiences.
So, the next time you see an ad or get prompted to buy a cool item in a game, remember this as part of a smart game monetization strategy!
