How to Monetize Games? 8 Game Monetization Models

Game monetization is the process of generating revenue from your game. This can involve various models, such as in-app purchases, premium paid downloads, in-game advertising, mobile game subscriptions, sponsorships, and more.

With the right strategy, monetizing your game is often more effective than traditional revenue models. A number of these modern monetization techniques have gained significant popularity, allowing you to diversify your income streams and boost your game's presence globally.

Developing an amazing game is only the first part of your journey. Once you create a captivating experience, you also need to figure out how to make money from it. This is where understanding game monetization strategies becomes crucial for success.

Many developers like you, especially those focusing on mobile games, seek effective ways to earn revenue while keeping players happy. Fortunately, various proven methods can help you achieve this goal. Ultimately, the aim is to build a sustainable business around your passion.

In this guide, I have shared a detailed look at how to monetize games, explore the pros and cons of each method, and provide a monetization masterplan to help you optimize your game for today's market.

What is Game Monetization?

Game monetization refers to the various methods game developers use to generate income from their creations. It’s about turning your game into a sustainable source of revenue. Moreover, a smart monetization strategy allows you to fund future projects and grow your studio. These game monetization strategies offers a higher profitability than the traditional way of “selling a hardcopy” into the market.

They not only helps you grab the large user base but also boost your game revenue from 5 to 10 times higher revenue, equating to a 400% to 900%+ increase. Earlier, the game monetization was so simple: players bought the game from the video game store and developers earned revenue. However, the industry has changed dramatically, and digitalization has played a biggest role in this.

With the rise of digital game distribution platforms and mobile platforms, it opened many doors for monetization of a game. Your choice of game monetization models directly impacts your game’s design and player experience. Therefore, selecting the right model is a critical decision. It’s not just about making money; it’s also about how you deliver value to your audience.

Real-World Example: Many indie studios start with crowdfunding (like on Kickstarter) to support initial development and later shift to freemium or premium models once the game gains traction.

Why Game Monetization is Crucial for Your Success?

The game making process is not an easy job; it takes dedication, time, planning, execution, and the biggest thing, investment. And when it comes to making money from your game, a perfect, well-aligned, and balanced monetization is your key to your success.

A solid plan for game monetization is must because even brilliant games struggle to achieve the success line. It is not because the game is not good or players are not engaging, it is mainly because developers somehow fail to deliver the balance between engagement and earning mechanics. An effective monetization allows you to:

• Fund future projects and innovations.
• Pay your talented team.
• Cover operational costs like servers and marketing.
• Continuously update and improve your game, keeping players engaged.

If your game is engaging but not generating revenue, you might end up with empty hands. You need money in order to run your game for the long run, and that comes from monetization models.

I hope you’ve understood why you need effective game monetization strategies. Now let’s understand how to monetize your game.

8 Game Monetization Models You Need to Know

There are many ways to monetize games, each with its own benefits and drawbacks. We'll explore eight of the most common and effective models used across the video game monetization landscape. You'll learn how to monetize your game effectively with these strategies.

1. Premium (Paid) Model

The premium model is perhaps the most straightforward way to monetize a game. Players pay an upfront fee to purchase and download your game. Consequently, they own the game outright and can play it without further costs.

This model is popular for console and PC games, yet it also exists in the mobile game market. When you choose this approach, your entire game content is available from the start. Therefore, players immediately gain full access to the experience.

Example: Stardew Valley and Monument Valley use this model effectively.

Pros:

• Players pay once, leading to clear revenue per sale.
• Your game can offer a complete experience without interruptions.
• There are no in-game purchases or ads to annoy players.

Cons:

• Acquiring new players can be harder since there's an upfront cost.
• Sales often drop sharply after launch.
• You might need robust marketing to convince players to buy.

2. Freemium (In-App Purchases - IAP)

The freemium model allows players to download and play your game for free. However, they can choose to spend money on in-app purchases (IAPs) to enhance their experience. This is a dominant strategy for mobile game monetization.

IAPs can include anything from virtual currency and cosmetic items to power-ups and extra lives. Many successful mobile game monetization strategies heavily rely on this model. Ultimately, players buy items that save time or offer a unique look.

Example: Clash of Clans and Candy Crush are classic freemium successes.

Pros:

• It attracts a large player base because there's no entry barrier.
• High-spending players (whales) can generate significant revenue.
• You can continually introduce new content for purchase.

Cons:

• Only a small percentage of players typically make purchases.
• Balancing the game can be tricky to avoid "pay-to-win" feelings.
• Some players might feel pressured to spend money.

3. In-Game Advertising Model

With in-game advertising, you offer your game for free and earn revenue by showing ads to your players. This is another popular method for how to monetize games, especially for free-to-play mobile titles. Consequently, players enjoy the game without paying directly.

There are several types of mobile game advertising you can use. For example, rewarded video ads give players in-game bonuses for watching a short video. Interstitial ads appear at natural breaks, such as between levels. Banner ads, conversely, remain visible on screen for a period of time.

Many developers use platforms like Unity Ads to integrate these advertisements seamlessly. This offers a simple way to implement mobile game advertising. Thus, it becomes a key part of your overall game monetization strategy.

Example: Crossy Road effectively uses rewarded video ads for monetization.

Pros:

• It allows you to reach the largest possible audience.
• You can generate consistent revenue from active players.
• Rewarded ads often improve player retention and engagement.

Cons:

• Ads can disrupt the player experience if not implemented carefully.
• Revenue per player is generally lower compared to other models.
• Some players might churn if ads become too intrusive.

4. Subscription Model

The subscription model requires players to pay a recurring fee, typically monthly or annually, to access your game or its premium content. This is common for massively multiplayer online (MMO) games. Consequently, players get continuous access to content updates and features.

Some mobile games also offer subscriptions for daily rewards, ad removal, or exclusive content. This provides a steady income stream for developers. Furthermore, subscribers often feel more committed to the game.

Example: Apple Arcade and Roblox Premium use subscription models.

Pros:

• It creates a predictable and recurring revenue stream.
• Subscribers tend to be highly engaged players.
• You can use this revenue to fund ongoing content development.

Cons:

• Players might be hesitant to commit to recurring payments.
• You must constantly provide new content to justify the subscription.
• It might limit your audience compared to free models.

5. Play-to-Earn (P2E) / Blockchain Model

The Play-to-Earn model is a newer approach where players can earn real-world value through playing your game. This often involves blockchain technology and NFTs (Non-Fungible Tokens). Players can own in-game assets, which they can then trade or sell.

For instance, unique characters, rare items, or virtual land might be NFTs. Developers typically earn a percentage of transactions on these marketplaces. Consequently, players are incentivized to play and invest their time.

Example: Axie Infinity popularized this model in blockchain gaming.

Pros:

• It can attract a dedicated player base interested in earning potential.
• Players feel a sense of true ownership over their in-game assets.
• It introduces a new economic layer to your game.

Cons:

• The technology is still developing and can be complex.
• Market volatility of cryptocurrencies and NFTs can affect player earnings.
• Some players might be solely focused on earning, rather than enjoying the game.

6. Crowdfunding / Donations Model

Crowdfunding involves raising money from a large number of people, usually through platforms like Kickstarter or Indiegogo. Players and supporters donate money to help fund the game's development. In return, they often receive rewards like early access or exclusive in-game items.

Donations, conversely, are typically ongoing contributions made by players who enjoy the game. This model is more common for indie developers or niche games. Ultimately, it relies on community support to help monetize games.

Example: Hollow Knight was funded via Kickstarter and built a strong following.

Pros:

• It helps fund development without giving up equity or control.
• It builds a strong community around your game before launch.
• You gain direct feedback from early supporters.

Cons:

• Reaching funding goals can be challenging.
• It requires significant marketing and community engagement effort.
• Failing to deliver on promises can damage your reputation.

7. Merchandise Model

The merchandise model involves selling physical products related to your game. This could include apparel, action figures, art books, or collectibles. This is a popular video game monetization strategy for games with strong brand recognition.

For example, a popular character from your game might be featured on a t-shirt. This not only generates revenue but also acts as a form of marketing. Therefore, fans can show their love for your game while you earn extra income.

Example: Minecraft sells everything from books to clothing and toys.

Pros:

• It taps into the loyalty of your most dedicated fans.
• Merchandise can act as a marketing tool.
• It creates an additional revenue stream beyond the game itself.

Cons:

• It usually requires a well-known game or strong fan base.
• Managing production, inventory, and shipping can be complex.
• Profit margins can be lower due to production costs.

8. Battle Pass / Season Pass Model

The battle pass or season pass model is a popular way to monetize games, especially in live-service games. Players can purchase a pass that unlocks a tiered reward system for a limited time, usually a "season." They earn rewards by playing the game and completing challenges.

Typically, there’s a free tier of rewards and a paid "premium" tier. The paid tier offers more valuable or exclusive items. Consequently, this encourages consistent engagement and provides a strong incentive for players to buy the pass.

Example: Fortnite and Call of Duty: Warzone are major users of this model.

Pros:

• It encourages long-term engagement and retention.
• It provides a clear value proposition for players.
• You can generate recurring revenue with new passes each season.

Cons:

• It requires continuous content creation to fill new passes.
• Players might feel pressured to "grind" to complete the pass.
• Balancing rewards is crucial to avoid burnout.

How to Choose the Right Game Monetization Strategies?

Deciding how to monetize a game involves careful consideration. No single model fits every game perfectly. Instead, your choice should align with your game's genre, target audience, and overall design.

Quick Tip: Arcade or casual games often do well with mobile game advertising, while RPGs and adventure games benefit more from premium pricing or subscriptions.

Many successful titles use a hybrid approach, combining multiple game monetization models. For example, a free-to-play game might use both in-app purchases and in-game advertising. This diversified approach can maximize revenue while appealing to different types of players. Therefore, don't feel limited to just one option.

How to Implement the Successful Game Monetization?

Once you choose your game monetization strategies, thoughtful implementation is key. Your approach should always prioritize the player experience. Ultimately, happy players are more likely to spend money and stick around.

Checklist for Ethical and Effective Monetization:

• Be transparent with players about pricing and rewards.
• Offer real value for every paid feature.
• Use A/B testing to refine strategies.
• Monitor data and feedback to improve your monetization over time.

First, ensure transparency with your players about how monetization works. Second, focus on providing real value for any purchases. For example, make sure in-app items feel worth the cost. Third, test different monetization methods to see what resonates best with your audience. Finally, iterate based on data and player feedback to refine your strategy. This continuous improvement ensures your game monetization models remain effective and ethical.

Helpful Resource: Read Unity’s official Game Monetization Guide for technical tips and analytics.

Consider your game's lifecycle too. An early-access game might benefit from crowdfunding, while a long-running mobile game will likely thrive with a combination of in-app purchases and mobile game advertising, perhaps even including Unity Ads. Learning how to monetize your game effectively means adapting over time

Conclusion

Monetizing your game effectively is crucial for its long-term success and your growth as a developer. You've now learned about 8 powerful game monetization models, from traditional premium sales to innovative play-to-earn systems. Each offers unique ways to earn revenue from your creative work.

Remember to consider your specific game, audience, and goals when deciding on your approach. Experiment with different game monetization strategies, listen to your community, and always prioritize delivering a great experience. Ultimately, building a fun and engaging game is the best foundation for any successful monetization strategy.

Need Help? Contact our team of game monetization experts to help you choose and implement the best strategy for your game.