Mobile game monetization strategies that work
In 2021, mobile game consumer spending reached an impressive $116 billion, according to AppAnnie. That’s $16 billion more than in 2020, which was already considered an explosive year for mobile games as people in pandemic-related lockdowns turned to mobile games for distraction. Additionally, Forbes reported that the average smartphone user spends $9 monthly on in-app purchases of free mobile gaming apps.
While it’s apparent there’s money to be made in mobile games, the way to monetize them successfully is less clear. Below we’ll cover several strategies for app developers to optimize mobile game monetization.
What is game monetization?
Game monetization is the mechanism by which mobile games earn revenue. While the concept is simple, the execution takes more planning. Therefore, it’s crucial to consider your monetization methods when developing your game.
Two examples of monetization strategies:
- Build challenges that offer freemium upgrades.
- Serve interstitial ads during natural game pauses.
Putting time and effort into understanding the model you want to use and how to optimize the strategy for your audience is key to maximizing revenue.
How are mobile games monetized?
Mobile games come in many different forms and, as a result, are monetized in a variety of ways. Mobile monetization strategies run the gamut from free-to-play games that depend entirely on ad revenue or in-app purchases or subscription games that require players to pay to play. In this section, we will explore some of the models and the game genres they work best for.
Mobile game monetization models and trends
Most developers employ a multi-pronged approach to game monetization. They cater to several types of players and therefore utilize different revenue streams.
While every user is valuable, some bring in more revenue than others. For instance, more women spend money on in-game content than men. Not only do 60% of females play daily, 36% of those who play spend money on mobile games. Therefore, it’s essential to consider potential users and their interests when developing your monetization methods.
Let’s explore the most popular and effective ways to monetize mobile games.
This monetization model is familiar to casual mobile game players. Users download the game for free but are shown ads at different points during gameplay, often between levels or at other natural pauses.
Types of ad-supported games
- Rewarded video ads incentivize users to interact with an ad in order to gain something in the game (i.e., extra lives, exclusive content, etc.).
- Playable ads offer players a simplified version of a game to try before purchasing it. U.S. agency professionals think playable ads are the most effective in-app ad format.
This model is prevalent among hyper-casual and casual games, where users are less likely to be willing to spend money on subscriptions or in-app content.
In the above example, we see two different types of ads being used in the game TangleMaster. The screen on the left has a small banner ad at the bottom. And the screen on the right has an interstitial video ad promoting another game.
In this monetization model, players can download and play the game for free. However, players can make in-app purchases to gain access to exclusive content, get more lives, skip levels, or other advantages. This model is popular across many different types of games as it can be combined with ads to supplement revenue or work as a gateway to subscriptions.
Candy Crush is a casual match 3 game, and like many of its rivals, the game relies on in-app purchases to monetize. For instance, the game frequently offers users the ability to buy more lives or even upgrade their in-game rewards.
The idea behind paid games is simple: players have to purchase the game. In the context of mobile, players pay to download a game to their phone. For this download, users can be charged a small fee ( i.e., $0.99) or a larger amount for more full-featured games (i.e., $15.99).
Many games mix multiple monetization strategies in order to maximize revenue opportunities. For example, Ticket to Ride is a popular board game that now has its own app. Players must pay for the game to download it, but in-app purchases are also available.
The subscription monetization model has two use cases. In the first, users can only play if they purchase a subscription, while in the second, users can subscribe to remove ads. Let’s review the three most common types of subscriptions for mobile gaming.
Subscription game types
- Individual subscriptions: This is a subscription to a specific game, usually on a monthly or yearly basis.
- Umbrella subscriptions: These subscriptions provide access to a variety of games, either from a single publisher or through a third-party, such as Apple Arcade.
- Battle pass subscriptions: In this subscription, players buy a “battle pass” to access rewards. They need to play and advance through the game to earn the rewards in a set amount of time, incentivizing users to play frequently.
The big picture of mobile game monetization
Monetization is a critical aspect to consider before launching a gaming app. App developers need to think beyond, “How much money can my mobile game generate?”. Instead, they should consider how their monetization methods will deliver a better gaming experience for their players. Ultimately, if a monetization method enhances the user experience, revenue streams will benefit.
To learn more about how to market and monetize your gaming app, check out Your guide to mobile game marketing 2022: Key insights and best practices.