Latest Monetization Models in Mobile Game Services: Subscriptions, Passes & Ads

If you’re thinking of developing a mobile game, you have monetization in mind. But which game monetization strategy should you choose? Find that out and more in our latest guide.

Monetizing a mobile game involves different techniques and models used by developers to generate revenue from the title. Needless to say, it takes time and resources, and none of them can be cheap. Whether you make the game alone or hire mobile game developers to do it for you, you must ensure the game makes enough money to cover development costs and profit for you. Of course, that is the plan behind making a game (unless your only idea is to share a dream vision, acted out for gamers).

Now, when games are released, some become instant hits, while others take some time to live up to their potential. It would be a lie if we told you that games never fail. Some games just don’t make the cut, like Concord, which faced a premature shutdown due to its monetization model, among the various primary reasons. Even a high-quality game can hit the dirt if the monetization model is wrong.

You have various ways to monetize your game, and when searching for mobile game development services, it is best to conduct thorough research before making a decision.

Mobile Game Monetization Models

The first thing you should know is the monetization models, which will help you understand how to make money from a mobile game.

When you visit the app store, free-to-play (F2P) games mention which monetization model they use to tell players what they may expect.

Here are the most popular mobile game monetization models for F2P games:

1. In-App Purchases (IAPs)

IAPs are the most common monetization model for mobile. Business of Apps states that 79% of mobile games use IAP. Have you ever heard of the freemium game economy? In this, players can download and play a game for free and spend within the game to enjoy a premium experience.

In-app, in-game, and microtransactions are the same. This monetization model allows players to play the game hassle-free. However, they may pay real money for certain features or benefits from the game, including extra lives, character or weapon skins, and boosters.

Note: Using IAPs depends on the game and genre, as player mindset varies. You can’t add progress boosters in a battle royale game.

Every game economy has an in-game store, a virtual store with different virtual items for players to buy. Some can be bought for real money, while others may be bought with in-game currency.

• Consumables: The most common type of in-app purchase is consumables. A player can buy and use it. In-game coins, diamonds, and gems are the most popular types of consumables.

For example, a player can spend real money in Clash of Clans to buy gems, which can be spent to skip waiting times for building upgrades. Once spent, the gems disappear. So, they can always buy gems from the in-game store to progress their game.

However, games should also provide small amounts of consumables through gameplay for player satisfaction.

• Non-Consumables: These are permanent in-game items that players can buy. They can buy them once, and they are permanently theirs. Characters and character skins are the best examples of non-consumables.

For instance, Mobile Legends Bang Bang has plenty of characters and hundreds of skins for them. While characters can typically be bought using in-game currency earned, players can buy premium skins using in-game diamonds.

• Bundles: Bundles are also popular. They are different items in one purchasable pack. They are usually available at discounted prices.
• Limited-Time Offers: Games often use limited-time offers as part of their game monetization strategy. They provide players with the choice to buy almost impossible-to-get items within a specific time period, such as a “7-day Limited-Time Offer.” These offers are often available at a discount.

2. In-App Advertisements

In-app ads come right next to in-app purchases. It involves making money by showing ads to players. Typically, these games provide most features for free, but on one condition: they must watch ads. A player may watch an ad to continue from a checkpoint in case the character dies in the game, double the earned rewards, or buy other boosters. The in-app ad model includes three parties:

• Players: The game users who are willing to watch a few ads to enjoy free gameplay
• Developers: The game developers who want to display maximum ads to generate revenue
• Advertisers: The source of the advertisements—those who want to show their ads to prospects

While ad monetization is effective, developers have to take a great deal of care with their decisions because even though players are willing to watch ads for the game, they do not like it one bit. You can check some addictive-looking games like Braindom: Brain Games Test, which have the worst reviews related to “Too Many Ads!”, which you must prevent your game from getting.

How to Use In-App Advertising

There is an ad network, a platform connecting advertisers and publishers. Google Ads, Meta, TikTok for Business, and Unity Ads are some of the top mobile game ad networks. Developers post in an ad network, where advertisers bid on them to win the ad space. The winning ad gets added to the game. The job of ad networks is to make as much revenue as possible for the developer.

Have you heard of effective cost per mile (eCPM)? It is a game metric that shows the revenue coming from ads. If you want to publish a game that makes you money through ads, it is a metric you must understand.

ECPM demonstrates the amount of money you are earning for 1000 ad impressions (each time an ad appears on a player’s screen is counted as an impression). So, the bigger the number, the better.

Which Ad Format to Choose for Your Mobile Game

When you decide to include ads in your game, you have to choose from the mobile game ad formats. Different formats have different eCPMs, so some of them may be good for you, while others may not be as effective.

• Interstitial Ads: These ads generally appear between gameplay pauses, such as between stages, and can be either static or dynamic. These are the ads you can skip after watching for a few seconds. They have good eCPMs ($4–$6), but they can also be disruptive and frustrating to players.
• Rewarded Video Ads: They need no introduction—you watch a video, you get an in-game reward. Players do not dislike this format because it is rewarding and does not disrupt the gameplay. Basically, players can choose not to watch them. You, or the provider of your mobile game development services, decides how many of these ads a player can watch in a specific time. Their eCPM range is from $10 to $50, making them a win-win for both players and developers.
• Playable Ads: This format gained popularity recently—ads that are not just ads. Playable ads are interactive and allow players to play the advertised game (they are generally ads of games). They are like “try before you buy” programs, and they add interactivity and engagement to an ad. Hence, their eCPM is also high.
• Banner Ads: Their popularity has faded with time, but they still exist. They appear in rectangular shapes in specified areas of the game’s screen (usually the top or bottom). They don’t have very high eCPMs, so they are generally combined with other formats.
• Offerwalls: It’s like a mini shop that appears inside the game with a list of offers (like, install another game or refer a friend) that offer in-game rewards. Not up there at the top, but offerwalls have the highest eCPMs.

3. Subscriptions

In-game subscription is another mobile game ad format to check out. It is a type of in-app purchase and is gaining popularity, going as far as becoming a separate monetization model.

A mobile game subscription is a one-time purchase that gives players access to additional content that general users don’t have. Depending on the developer, the subscription can be weekly, monthly, or any other duration-based purchase.

You can make subscription-based monetization an addition to your primary model. For instance, your game may use IAPs as the base revenue generator but also include subscription offers. Those who choose to subscribe will subscribe, adding a vital cash stream.

They are a perfect fit for MOBAs and battle royales. Call of Duty Mobile (CODM) is a popular example of games with this monetization model.

There are different types of subscription models in mobile games:

• Battle Pass: The most popular type, they come in different games, whether it is a hypercasual or hardcore title. A player pays a certain amount to buy a battle pass for a specific timeframe, which lets them access different rewards. However, the rewards aren’t instantly available and, instead, unlock with progress.
• VIP Subscription: This subscription allows you to give your players exclusive benefits for a specific time. For instance, it can offer daily rewards, in-game currency stash, ad removal, and daily rewards combined.
• Remove Ads Subscription: If you have a game that depends mainly on ad monetization, you can use this subscription model to give them the option to get rid of the in-game ads. Some games have a subscription model that enables enjoying an ad-free experience for a month, while some titles allow a one-time purchase for permanent ad removal.

4. Hybrid Monetization

Making mobile game monetization better is the option to use more than one model simultaneously. You can fuse all the above models and use them as a hybrid monetization strategy. However, one should be your primary revenue stream.

With hybrid monetization, you can make money from different types of players. For example, payers prefer in-app purchases, and non-payers are okay with in-app ads. Players committed to the game are covered under the subscriptions.

Here are a few combinations that are commonly available in mobile games, and they depend on which segment of players you are targeting:

• In-App Purchases & Subscriptions: If you focus on paying payers, this combination will do you well. Keep in-app purchases as the primary model and add other options to improve the gameplay experience. For those who aren’t satisfied with in-app purchases, subscriptions will bring more value.
• In-App Ads & IAPs: Paying and non-paying players drive profit for developers in this combined hybrid model. Here, IAPs will be your main revenue stream, while in-app ads will bring additional revenue from non-payers (and sometimes, willing payers too). However, piling the experience with too many offers and ads can backfire, so selecting ads like rewarded video ads can work to your advantage.
• IAPs, In-App Ads, and Subscriptions: Looking to merge all three? You can. This will allow you to tap into a vast player group, including all types of payers and non-payers. IAPs will likely be the primary strategy, with the other two working as additional streams. But, since you will be combining three monetization models, your game development services provider must balance them to prevent a negative impact.

Which Game Monetization Model to Choose

Different games, different publishers, different preferences. There is no definitive model pre-selected for anybody. However, you can know beforehand which model may suit your game.

Given by trend and usage, genres like MOBAs, battle royales, and RPGs generally rely on IAPs and subscriptions, as players are engaged, devoted, and some even make careers out of these games. Your choice will also depend on what your competitors in the same genre are doing. Let’s talk about how you can monetize your game.

1. Make Your Strategy

Quite simply, it is the way to do it—you must be clear on which monetization models you want to use and if they are right for your game.

Many times, people design the game and attempt to inject monetization into it;  that’s where things don’t go as expected. You strategize from day 1, so you can add the monetization approach to the game’s overall user experience (UX), which allows not only monetizing your game but making it feel natural instead of forced.

2. Retain Your Players

Do players keep playing your game, or do they abandon it? The more the retention rate, the better. It is your game’s ability to not lose players. To do that, your game needs to be engaging. For that, your game, apart from having a good story, graphics, and gameplay mechanics, should leverage additional retention techniques, like:

• Daily Log-in Rewards
• In-Game Events
• Social Features
• Push Notifications/Reminders

Many games use multiple retention tools to improve player retention. For hyper-casual games using ad monetization, retention may not be as important as competitive esports-worthy games that primarily use IAPs. These games need to convince players to spend money (not an easy task), which takes time. Since it takes time, the game must be capable of retaining players. If a player has been playing a game for five years, they are more likely to be willing to spend money on the game, so the longer they play, the better your chances of encouraging them to spend.

3. Test Everything

Once you have decided on the monetization models, you have to test them out. Extensive testing allows you to find out what works and what does not. Accordingly, you may need to change some features because they were not working as expected. Making small adjustments to some features may make your game better. Even if you love a feature, if it harms your game, you do not need it. Your mobile game development services should include testing every aspect of the game.

For example, if your game relies on in-app ads, you may end up showing ads excessively to users, which results in a bad experience for players, affecting your retention rate. Time to reduce the number of ads. Then, there’s the ad format. If a specific one is doing better than another, you switch to the beneficial format.

Testing also applies to IAPs. If your players aren’t showing interest in your game store, clearly, it may not be working. Try different offers and prices.

Hire game developers who provide A/B testing. They may divide your audience into two segments. For example, Mobile Legends Bang Bang has a regular server and an Advanced Server. In the advanced server, they roll out updates and new features for testing and feedback.

Note: Testing continues even after game launch.

Conclusion

Whatever you do, do not implement paywalls in your game. Paywalls force players to spend money to advance in the game or gain an advantage over other players. Most gamers will oppose this, and your game will likely go down in vain. Your game must be something that can either be directly bought, a try-before-you-buy, or follow a proper monetization model that lets you enjoy the benefits, and the players, the game.

You are now ready to think ahead. If you need more information or want to hire mobile game developers, reach out to us. We have the experience, expertise, and resources to help you.

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