Games can be monetized in different ways, premium up front cost, free-to-play, as part of a subscription, and so forth. I’ll dive into each of the common monetization strategies and explain how they work. Next, I’ll dive into how to select the right one for your particular game, taking into account your audience, your target device, your team and your ambitions.

Selecting the right monetization strategy for your game

Creating a great game is not the only thing you need to make sure your game is profitable. You need to think about the right monetization strategy before you start thinking about making any game, especially on mobile devices.

Discoverability — the ease or rather the difficulty of finding your game — is one of the toughest areas that game releases currently encounter. There are so many games available to our players, that they simply can’t all be listed in an effective way.

Developers have long lowered and lowered their prices for their games in order to reach a bigger and bigger audience. And although that strategy was profitable for a short time, the bottom of that downward spiral was soon reached when developers were giving their game away for free. And with that players didn’t have to think about, or know if they would be interested in a game, that moment of friction was completely taken away.

But does that mean that Free to Play is always the best and most valid option for your game? And the answer is — not always and really dependent on a lot of factors.

Monetization Methods

Game monetization can be divided into three main categories:

F2P — Free to Play
The game can be installed and played for free. Sometimes, a game can be started for free and the player will need to pay to unlock the rest of the game, often referred to as F2S or Free to Start.

Premium
The player pays upfront to unlock the game.

Service Subscription Benefit
The player can play the game as long as they are an active subscriber of a service

Monetization Methods — An Overview

F2P | Ads

Ads in games come in many different flavors. In most cases they will display an add for a competing game or at least try to match your game’s players interests to similar interests. This means that you will lose players because they saw an ad in your game. This is a clear trade-off you need to take into account.

F2P | Ads | Banner

Banner ads usually have a distinct place in your app — for instance at the bottom of the screen. They overtake a small part of the screen, in most cases displaying various advertisements in sequence, similar to how banner ads are displayed on websites. It functions as a billboard and usually features some text and/or fast loading images, some ads feature motion graphics to attract more attention.

More recently in-context ads are becoming more common and are more intertwined with the game experience. These might be featured as part of the in game (item) shop or as advertisements in the game environment. Think of advertisements along the edges of a football match or billboards in a racing game. In-game product placement is another form of in-context advertisement.

Another fairly new example of banner ads is the app-open advertisement, where the ad overtakes a large part of the screen while the game or app is loading. A small section of the screen is reserved to show that the app or game is finished loading.

F2P | Ads | Interstitial

These advertisements overtake the complete experience. These ads are very invasive and force the player to watch the ad. Placing these ads at strategic low engagement points reduces the annoyance, but they are still forced.

Interstitial ads come in various forms, such as static (images), dynamic (video) or playabale. A mixed variation is also seen quite a lot, where the interstitial begins with a video, followed by a playable.

F2P | Ads | Rewarded Interstitial

Rewarded interstitials are similar to the regular interstitial ads in the way they overtake the experience. However, common practice is to show an intro to the ad — usually announcing an ad is incoming AND that watching the ad fully will result in a reward. These ads can be skipped by closing them (Opt-Out). A reward is given by the game when the player decides to continue watching the ad until the timer is done (usually 30 seconds)

F2P | Ads | Rewarded Video & Playable

Rewarded video ads are only displayed when a player makes an active choice to watch them (Opt-In). These ads can often be skipped, but the reward is only given if the ad is completed.

Common is also to include a playable ad right after the rewarded video, as an interactable scene or minigame, the rewarded playable offers the reward after a certain time is passed (usually 30 seconds).

F2P | IAP

Free to Play can offer various purchases in games. They can be divided into a couple of major sections.

Consumables — these items are bought and depleted upon using them in-game, think of extra lives, energy, boosters and power-ups. Currencies such as gold, gems, diamonds are often used to transform real money into a game specific token that allow the user exchange these to other in-game items. In-game currencies offer a more fine grained value and allows the game to provide these in lower volume as a game reward. Mixing in-game rewarded currencies and bought currencies will obfuscate the value, just like drink tokens in a club.

Non-consumable — these items stay in the player’s inventory for the entire duration of the game life-time, and need to be warranted by the game even after the game is downloaded. Think about cosmetic items, or “no-more-ads” purchases.

Paywall — this is a particular non-consumable item often found in games better known as “Free-to-Start” games. These games offer only a small part of the game experience for free and the rest of the game is locked beyond the paywall. Once a player has purchased this non-consumable, the rest of the game’s content is unlocked.

F2P | IAP| Subscription

Subscription can offer any kind of benefit in game, but ties the benefits to a particular duration. Subscriptions often occur in weekly, monthly or yearly durations and are paid upfront. In some cases a subscription trial period is also available. Subscriptions often auto-renew after their duration expires. An effect witnessed in many subscriptions are so called “zombie” subscriptions where the subscriber pays for the benefits but hardly or never uses it.

F2P | IAP| Donation

A donation in-app purchase does not directly benefit the player with an in-game return and can be found in indie games that rely on player goodwill.

F2P | IAP| Merchandize

A game merchandize shop allows players to purchase real-life game merchandise directly from within the game.

F2P | UIA | Rewarded Offer Wall

Free to play games that feature UIA (User Incentivized Actions) mostly do so in the form of a rewarded offer wall. As the name suggests, offer walls feature many different “offers” that the player can choose to engage with. For instance filling in a survey, visit a website, or shop at a website, install another app or game or even engage with that app or game. After a particular action is completed an in-game benefutr is rewarded.

Other noticeable offers on offer wall include watching a video or interacting with a playable add.

F2P | Mixed Model

A Free to play game that uses a mixed model approach utilizes several of the above monetization methods. Common are using various ads methods in combination with In-app purchases.

Premium | Game Purchase

The classic game monetization method where the player purchases the game before she can play. Most prevalent on console and PC markets. In some cases a game is presented and delivered in several episodes which the player needs to purchase in a bundle, or individually.

Additionally, extra content, extending the game’s lifetime, are often offered as DLC (Downloadable Content), which requires an additional payment. These can include a continuation of the game’s story and plot, or additional items and game modes.

Premium | Subscription

These games can only be played while a player is actively subscribed. Often, these games offer multiplayer and continuous updated.

Service Subscription | Benefit

Games can also be offered as part of a service subscription, such as Apple Arcade, Xbox Game Pass and Netflix. The full game is available to the active subscriber of the service. And as with a premium purchase, episodes can also be unlocked through a subscription service.

Some games may not be part of the service subscription, such as some free to play games, but can offer benefits exclusively to the subscribers of a particular service.

What monetization fits with your game?

So, with all these options in mind, what monetization strategy is the best? It really depends on many things. Let’s discuss some of the heavy weighing factors.

Audience

Games are always made for a particular audience. It’s easy to assume that all games are made to pursue the largest possible audience, but many games are made specifically for a particular niche.

Certain audiences — mainly those who are really dedicated to their hobby — will appreciate premium games over free-to-play. They’ll enjoy the upfront consideration phase and gladly look for game reviews and expert opinions to fuel their enthusiasm to make a purchase. Once they decide to purchase the game, they’re free to immerse themselves in the experience.

Educational games could be promoted within school and other education facilities and therefore can be better monetized through subscriptions of premium price, the barrier to entry might be price based at all with these institutions. Some games exist to serve a very small and specific niche that will not look for games in the App- or Play Store.

However, if you want to reach many and more casual players directly and through the App- and Play Stores, opting for any of the F2P strategies is the most valid option — allowing players to play your game with the least amount of upfront friction. The audience on mobile is more impulse driven, making a choice based on curiosity and initial interest.

Team capabilities

If you have your eyes on creating a F2P game, you need to understand the nature of F2P games and how they monetize. Any of the F2P monetization strategies take a long time to make money. A player that is playing for free needs to have great reasons (value) to pay for something or they need to watch countless ads before you see a decent return. This is the reason why F2P games are always concerned about player retention, and this is where your team capabilities come in. In order to offer your player days, weeks and months of content (rather than hours) you need to have a game that will offer that much content, so the game stays interesting for your player for that long, this content needs to be made by the team.If your team is limited, creating a F2P game might not be the best option.

Ambitions

The ambitions you have for the game also play a crucial part in figuring out your monetization strategy. If your game is a finite experience that needs to have an end, like most narrative driven games that end their plot, creating a F2P game might not be the best solution. Some games are better because they end and reach a finale and creating a F2P game that requires this ending to be postponed might be hurting the experience.

Not all games are created to make (a lot of) money and may solely exist because the game developer wanted to create a particular experience, which makes accepting donations or a base price premium model a valid strategy.

Great games

Although I think I covered some of the fundamentals of monetization in games, there are certainly other factors at play and each team, each ambition and each game is unique and should be evaluated on its own to see what monetization strategy fits best.

No matter if you are an artistic indie developer or a publishing powerhouse, your monetization strategy should be part of the design process. When you’re an indie game developer, deciding upfront how you want to monetize your game will save you the time to think about it later, it will help you understand what’s important for your game. Don’t let it sit in the back of your mind while you are “figuring it out” as it will cause plenty of anxiety and waste your precious development time near the end of your project. If you know for sure F2P is the best option for your game, then it is absolutely imperative that you design your game with the monetization included. You need to design for value with every step that you take.

No matter what monetization strategy you choose, you still need a great game too!