Mobile gaming has grown to be one of the most popular forms of entertainment on the planet, entertaining hundreds of millions of players at almost any age bracket. But how do these supposedly "free-to-play" games make their money? The answer includes several ways in which game developers make money from their content. In-app purchases, microtransactions, and advertising-even subscription models-are all fair play. Let's take a closer look at just how mobile games generate revenue.
1. In-App Purchases
In-app purchases are among the most conventional ways to make money in mobile games. This is a model whereby players can buy virtual goods, such as currency, weapons, or characters, to enhance the level of their gaming experience.
In such cases, free-to-play online games might offer the ability for the players to buy power-ups or other special items that give them an edge in progressing through the game. Free is the cost of the game itself, while the developers make their money off those players who wish to purchase the extra features.
Example:
- A player playing a puzzle game may buy extra lives or hints to pass on to higher levels.
A strategy game might sell resource packs, special characters, or skins for customization.
2. Microtransactions
Microtransactions - pretty much the same concept as in-app purchase but usually presupposes small sums of money. These tiniest purchases, often less than a dollar, with time add up as players buy cosmetic upgrades, loot boxes, or any special content.
This monetization methodology works because gamers are making small and impulsive purchases over and over again. The frequency of the purchases can build up over time to make solid revenue for the developers of the games.
Example:
- Spending $0.99 to unlock a special skin or avatar for a player's character.
- In some competitive shooter games, loot boxes containing random rewards can be sold with each release, allowing players to spend a few cents every time to improve their chance of getting rare items.
- Advertising
Advertising is another brisk source of revenue generated in mobile games. Most free-to-play games have ads within the game, which allows the developers to make money without necessarily requiring the player to pay a single dime. These could be in the form of banner ads, interstitial ads, or even reward-based ads.
Among them, reward video advertisements are in great demand. These video advertisements provide rewards to the players, such as extra lives or additional in-game currencies, in exchange for watching a small video ad. It pays off for both since the player benefits by not having to spend money, while the developer gets his income.
Example:
- In a car-racing game, the player gets to view a 30-second ad for a new car or an additional attempt.
- Casual games can include banner ads on the screen while they are being played, sometimes at the bottom of the screen. This could be monetized per view or per click.
4. Subscriptions
Some mobile games make money by offering subscription services that allow subscribers to receive special content, in-game features, or an ad-free experience. Subscriptions can be weekly, monthly, or yearly and provide a recurring revenue stream for game developers.
This model is very common in games that have rich, ongoing content or with a multiplayer focus in which players invest long-term. Of course, the benefit of subscriptions may also extend to early access to updates, exclusive items, or special events.
Example:
- A mobile MMORPG can have a membership type VIP, which grants access to rare items, faster progression, or unique events.
A puzzle game could sell a subscription to disable ads and get extra levels or special powers.
5. One-Time Purchases
While most mobile games are free-to-play, some utilize a one-time purchase model. In other words, players will pay once to download the game. Since they then own the game, no further purchases are required or otherwise enticed. While this has become less common in the mobile market, it can still be effective for premium or highly-rated games.
Example:
For instance, an indie critical hit puzzle game can have unlimited levels and content for a fixed charge of $5.
Some RPGs also offer full-fledged gameplay whereby one pays once to access the game sans ads or microtransactions.
Final Thoughts
The mobile gaming industry is highly dynamic, and developers employ different means for revenue generation strategies in line with the diverse segments of players. Despite this fact, in-app purchases, microtransactions, advertising, subscriptions, and one-time purchases remain the most common ways of monetization channels, whereas the monetization landscape keeps on changing.
Knowing how the money rolls in will explain to even the casual gamer or avid player why this and that feature or in-app purchase exists in your favorite mobile game. After all, these monetization strategies help developers keep your favorite gaming worlds fresh and exciting with ongoing content creation while sustaining their businesses.