· 9 min read
Exploring game monetization: Traditional strategies
Author’s note: This is the first part of the GameAnalytics monetization series. The second part, focusing on alternative monetization strategies and innovative revenue streams will be published on June 14th.
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Decades ago, you’d place your game with a price tag on a shelf and hope for the best. However, with everything moving into the digital world, there are plenty of ways to earn from your game. Do you charge players upfront, or opt for the freebie route and make money from ads and in-app purchases? It could be a bit of a maze out there, but we’re here to guide you through the world of game monetization.
Why should you monetize your game?
Before exploring typical approaches, let’s take a moment to remember why we monetize our games in the first place. Understanding the purpose behind monetization is important as it guides our approach to implementing these strategies effectively.
- Sustainability: Generating revenue is essential for sustaining business operations, funding ongoing development efforts, and ensuring the longevity of your games. Without monetization, you may struggle to cover the costs associated with game development and maintenance.
- Investment in player experience: Sufficient funds allow you to invest in the quality of your games, including hiring talented developers, artists, and designers, as well as implementing advanced technologies and features. All-in-all, you will be able to create richer, more immersive gaming experiences that engage your players, ensuring their retention.
- Innovation: Having resources is often an incentive to explore new ideas, experiment with different gameplay mechanics, and push the boundaries of your game. Such innovation is attractive to both developers and players alike, supporting the culture of your studio as well as player satisfaction and engagement.
- Support for free-to-play models: Monetization is particularly important for free-to-play games, which rely on revenue streams such as in-app purchases, advertising, and subscriptions. These games offer a low barrier to entry for players, making them accessible to a wider audience. However, they still need to generate revenue to remain viable.
Clearly, monetization affects more than just the revenue you generate. It increases flexibility and scalability, boosting player engagement, and removing barriers to entry.
Through monetization, you can also support ongoing content updates, personalize revenue generation, build a sense of community, and use data to optimize your game development, monetization, and marketing strategies.” – Nicholas Lim, Founder and CEO of Sonamine
Gaming monetization models
The traditional strategies revolve around two primary models: freemium and premium.
What is a freemium game?
Freemium games, usually free to download, entice players with various ways to generate revenue. The income can be derived from in-game advertising, microtransactions (such as individual purchases, loot boxes, or gacha), downloadable content (DLC), or tiered extras like season passes or battle passes.
Many gaming studios combine two or more of these models to maximize profits. These combined models are prevalent in free-to-play (F2P) games – where players are enticed to make purchases for enhancements such as extra lives, virtual currency, customized avatars, ad-free experiences, or extended playing time.
Players who choose not to spend money might experience in-game ads, encounter timers, bump into limited customization options, or have restricted access to content. Note that some companies have faced criticism for implementing aggressive pay-to-win (P2W) strategies, where players must make purchases to progress or compete effectively in the game.
What is a premium game?
Premium games require an upfront payment for full access. Once purchased, players typically have unrestricted access to all content and features without the need for additional in-game purchases. However, some premium games may offer additional downloadable content (DLC) or expansion packs for an extra fee – providing players with new levels, characters, or storylines to enhance their gaming experience. Additionally, premium games can also offer optional cosmetic microtransactions, allowing players to customize their characters or avatars with virtual items or skins for a small fee.
Monetization strategies
Now that we’ve covered the basics of the two primary monetization models, let’s dive into the typical strategies used within these models. The extent of these strategies vary depending on whether the game follows a freemium or premium model, but they all aim to maximize revenue while providing value to players.
Monetization strategies for game publishers:
1. Advertising
Advertising is a very common and popular monetization method used in various types of games across all platforms, including mobile, PC, console, and even web-based games. Game developers integrate ads into their games to generate revenue by displaying promotional content to players during gameplay. Here are some of the examples:
Banner ads: Banner ads are small advertisements that appear at the top or bottom of the screen while players are engaged in gameplay. These ads are typically static or animated images and can be non-intrusive, allowing players to continue playing while still being exposed to the advertisement.
Interstitials between levels: Interstitial ads are full-screen advertisements that appear between levels or during natural breaks in gameplay. These ads often include interactive elements or video content and provide an opportunity for players to engage with the advertisement before continuing with the game.
Video ads: Video ads are short promotional videos that players watch in exchange for in-game rewards or currency. These ads can range from a few seconds to several minutes in length and may include pre-roll, mid-roll, or post-roll placements within the game.
Offerwalls: Offerwalls are interactive interfaces within the game that allow players to earn in-game rewards or currency by completing tasks or engaging with third-party advertisements and offers. These tasks may include downloading and installing apps, signing up for services, or completing surveys.
Branded experiences: Branded experiences involve integrating sponsored content or branded elements into the game to create immersive advertising experiences for players. This may include in-game events, challenges, or virtual items sponsored by external brands or companies.
2. In-app purchases
In-app purchases are a prevalent monetization method employed across various gaming platforms, including mobile, PC, and console. This approach allows developers to offer additional content, features, or virtual goods to players within the game, enhancing the overall gaming experience. Here’s a breakdown of some in-app purchase strategies and their usage across platforms:
Premium version: This model is commonly used across mobile and PC platforms, where players can purchase a premium version of the game to unlock exclusive content or features not available in the free version. While mobile games often offer a free base game with optional premium upgrades, PC games may release a deluxe or collector’s edition with additional content at a higher price point.
Level packs: Level packs are popular across all platforms and are often used to extend the lifespan of a game by offering additional levels, challenges, or gameplay experiences. Players can purchase these packs to access new content and expand their gaming experience. This strategy is particularly common in mobile games and downloadable content (DLC) for PC and console titles.
Battlepasses: Battlepasses are frequently implemented in multiplayer games across all platforms, offering players a progression system with rewards, challenges, and exclusive content over a set period. While mobile and PC games often feature battlepasses as part of their free-to-play model, console titles may offer similar season pass options for additional content updates.
Extra resources and skins: The sale of extra resources and skins allows players to purchase in-game currency, power-ups, or cosmetic items to enhance their gameplay experience. While the availability of these items may vary depending on the platform and game, the concept of offering optional purchases for virtual goods remains consistent across platforms.
“Some mobile genres generate a bigger share of their revenue via purchases than others: engagement-intense genres like strategy or RPG (as well as casino games that are based on player transactions) see most of their revenue from in-app purchases. In contrast, more than 94% of hypercasual gaming app revenues were via in-app revenue. Compared to other app categories, mobile gaming apps had the largest share of free-to-download apps with in-app purchases.” – Statista, 2024
3. Limitation removals
Limitation removal is a monetization approach commonly used in mobile games, where players can opt to remove certain restrictions or limitations within the game by making a purchase. The two common limitation removal strategies include:
Remove ads: This strategy allows players to eliminate intrusive advertisements from the game by purchasing an ad-free experience. This feature is typically found in mobile games, but may also be available in browser-based or PC titles.
More energy, time, etc.: Another limitation removal strategy involves allowing players to purchase additional energy, time, or other resources to bypass waiting periods or restrictions within the game. For example, players may be able to purchase extra lives, energy points, or time-based boosts to progress through levels more quickly or access premium content without having to wait for cooldowns or recharge timers.
4. Vouchers and wallet payments
The use of vouchers and wallet payments addresses barriers to traditional payment methods such as credit cards (due to fx. age restrictions or regional-related payment methods).
Vouchers are digital codes or coupons that players can redeem within the game to unlock special rewards, discounts, or in-game currency. These vouchers may be distributed through various channels, such as promotional events, partnerships with other brands, or in-game achievements.
Wallet payments enable players to store funds or virtual currency within their game accounts, allowing for quick and convenient purchases without the need for repeated credit card transactions. Players can preload their accounts with a certain amount of virtual currency or link their accounts to digital payment platforms such as PayPal, Google Pay, or Apple Pay.
As we wrap up our exploration of traditional monetization strategies, it’s important to acknowledge that the gaming revenue landscape is vast and always changing. While we’ve covered the basics, there are plenty more ways to make money from your games just waiting to be discovered.
Compare, analyze and optimize your revenue with GameAnalytics
Join us next week as we dive into alternative monetization avenues like Web Shops, subscriptions, crowdfunding, sponsorships, and more. We’ll explore each option, sharing tips and insights to help you diversify your income streams and make the most of your game’s potential.
In the weeks ahead, we’ll also dig into revenue analytics, showing you how to track your earnings, understand your data, and make smart decisions to boost your bottom line.
In the meantime, make sure your game is set up to send revenue data to GameAnalytics, and keep an eye out for our new Monetization dashboard coming soon. Get ready to level up your monetization and take your studio to the next level!
