If you consider making video games more than just a hobby and want to earn money from your work, it’s essential to properly implement monetization.
In this article, we’ll break down ways to monetize games and explain how to do so without losing your reputation. We’ll also give some examples of unsuccessful monetization. The article will end with answers to frequent developer questions about earning money from games.
Why monetize games?
Game development takes time, effort, and resources. Monetization lets you:
- Recoup money spent on development. Even a simple game can require substantial investments. Monetization lets you recover that money.
- Finance future projects. The income from one game can be used to create new ones. This allows you to develop and try out new ideas.
- Support and update existing games. Continual updates, new levels, and new content take resources. Monetization makes it possible to maintain interest in the game and retain your audience.
- Provide stable income for the team. Game development is work. For the work to continue, stable income is needed. Monetization helps the team feel confident in their future.
Popular models of video game monetization
Good monetization is when a balance exists between the interests of the developers and the players. The players who pay receive some advantages, but the free players still have a chance to enjoy the game.
Let’s consider the main approaches to monetization.
Pay to Download (P2D)
In this model, users pay a fixed amount for the full version of the game. This approach is often used for high-quality games with unique gameplay.
Pros:
- Stable income from each sale. Developers receive money immediately after the player purchases the video game.
- Fewer problems with game balance. All gamers have the same access to all content.
- Ability to focus on content quality. Developers can devote more time to creating unique gameplay without getting distracted by implementation of monetization mechanics.
- Audience loyalty. Gamers who are willing to pay for a video game are usually more loyal and value quality.
Cons:
- High barrier to entry for new players. Many players prefer to try a video game out for free before paying for it.
- More difficulty attracting a large-scale audience. Games with a fixed cost often get fewer downloads than similar free games.
- Limited potential for income after the first sale. After purchase, the project only earns income from new gamers.
- Requires strong marketing. To justify the price, you must actively promote the video game on the market.
Examples of the P2D model:
- The Witcher 3: Wild Hunt — the full version of the game is available after a one-time purchase.
- Stardew Valley — players pay to download and receive the whole game without additional expenditures.
Tips for implementing this model:
- Create a demo version to attract users.
- Use pre-orders and early access.
- Offer additional content after release to increase the game’s life cycle.
Free-to-Play (F2P)
In the free-to-play model, gamers can download and play the video game for free, but in-game purchases are available to access additional content or opportunities.
Pros:
- Easy to attract a large audience. Free access lets you attract a wide range of users.
- Opportunity for long-term monetization. The game can bring in income for the entire time that it’s popular.
- Flexibility in creating offers. Developers can adapt their offers to different types of gamers.
- Potential for high income. Despite the fact that only a small percentage of players pay, the overall income can be substantial.
Cons:
- Requires a balance between free and paid content. It’s important that the game stays engaging for all users, regardless of whether or not they spend money.
- Difficulty retaining players. Without regular updates and new features, interest in the project may quickly fade.
- High expenses for content updates. Maintaining player interest requires continual investments in developing new content.
Examples of the F2P model:
- League of Legends — a free game where players can purchase upgrades and skins for characters.
- Genshin Impact — a free video game with opportunities to purchase in-game currency to access new characters and weapons through a “gacha” mechanic.
Tips for implementing this model:
- Create unique base gameplay that’s available for free.
- Develop a range of in-game purchases for different types of users, from weapons to skins and cosmetic upgrades.
- Regularly update the game with new content.
- Use analytics—information on user behavior—to optimize the game’s offers.
Pay-to-Win (P2W)
The pay-to-win model offers players a chance to gain advantages in the game by purchasing special items or abilities with real money.
In these games, spending money often allows you to make your character stronger and skip the boring “leveling-up” period. This makes it harder for players who aren’t willing or can’t afford to pay to stay competitive.
Pros:
- High income from active players. Gamers who want to win will pay significant amounts.
- Motivation for purchases. A desire to outdo other users stimulates spending.
- Ease of implementation. Developers can quickly add P2W elements to a game.
Cons:
- Risk of losing the balance we mentioned at the beginning of the article. Players who don’t want to pay may feel unfairly disadvantaged.
- Negative community reception. Users often criticize P2W models for creating unequal conditions.
- Lower long-term interest. If the game becomes too dependent on payments, interest can fade.
- Difficulty creating a fair and competitive environment. In these video games, winning can depend more on the money you invest than on skill.
Examples of P2W models:
- World of Tanks allows players to gain an advantage by purchasing premium tanks and ammunition that can be more powerful and effective. While these items are available without payment, users who pay receive them faster.
- FIFA uses P2W in Ultimate Team mode, where gamers can purchase a set of cards with football players. Gamers who spend more money can create a team from the best players, which gives them a significant advantage during matches.
Tips for implementing this model:
- Try to preserve the balance between paid and free opportunities.
- Give players alternate ways of gaining an advantage through active gameplay.
- Create separate modes for users who don’t want to participate in P2W mechanics.
Some developers try to avoid the pay-to-win model by only offering cosmetic items for purchase or other items that don’t give an in-game advantage.
Hybrid models
You don’t have to stick to just one model of monetization. You can use a combination of different approaches that combine elements of P2D, F2P, and P2W. Just make sure you don’t overdo it.
For example:
- The base game is sold for a fixed price (P2D).
- Additional content is available through micro-transactions (F2P elements).
- Cosmetic items are purchased separately.
Pros:
- Ability to capture different audience segments. Gamers can choose the model that suits them.
- Diversified income sources. Having a variety of monetization elements means you earn income from different sources.
- Flexibility in adapting to the market. It’s easier to change and adapt the model to meet current conditions.
Cons:
- Difficulty finding a balance. You must keep a close watch to ensure that no single element dominates and upsets players.
- Risk of confusing players. If there are too many offers, users may get confused and feel tricked.
Examples of hybrid monetization models:
- Clash Royale — a free game that’s monetized through micro-transactions, where gamers purchase in-game currency to speed up progress. The game also has a monthly Pass Royale subscription that provides additional bonuses and rewards.
- Call of Duty: Mobile uses the free model but earns money on in-game purchases. The game also regularly launches temporary promotions with limited-time offers.
Source: In-game screenshot
Tips for implementing a hybrid model:
- Clearly explain the monetization structure to the players.
- Make sure that every monetization element adds value to gameplay.
- Regularly analyze data to optimize the balance between the different approaches.
Crowdfunding
Crowdfunding is when a developer shares their idea for a game with the world and allows future players to pay for it in advance. It’s similar to an advance payment before the game is released. When the game comes out, the people who paid receive the game and some additional rewards.
These might include the ability to download art or music from the game. Some may even pay to have themselves added as a virtual character in the game.
Pros:
- Financing before release. Crowdfunding lets you earn money for development in advance, which reduces financial risk.
- Player engagement. Gamers feel like they’re a part of the project, since they supported it at an early stage.
- Building a community. A crowdfunding campaign helps create an active, loyal community before the game is released.
Cons:
- Requires marketing investments. You need to do a lot of advertising to raise a large amount of money.
- Risk of disappointment. If you can’t keep your promise or have to push back deadlines, sponsors may react negatively and lose trust in the project.
Projects that were released using crowdfunding:
- Pillars of Eternity. In 2012, the studio Obsidian launched a fundraising campaign for an old-school RPG. Backers donated $4 million to the studio, which at the time was a video game record.
- Shenmue III. Almost 70,000 backers supported the developer, and the game raised more than $6 million.
- Prison Architect. This economic simulation game raised $9 million using Kickstarter and its own site. Before its release in 2015, the game earned $19 million by selling 1.25 million copies.
Tips for using crowdfunding:
- Clearly state the goals and deadlines for raising money.
- Offer attractive rewards for sponsors.
- Actively engage with your audience and share information and progress on the game.
- Regularly update the campaign to maintain interest.
- Be transparent and keep promises.
Mobile games and nuances of monetizing them
Here are some strategies that mobile game developers use to make money:
In-App Purchases
The sale of virtual items, currency, and other opportunities within the game.
Examples of IAP:
- Purchasing gems or in-game currency.
- Obtaining unique characters or skins.
- Purchasing upgrades that help you achieve goals in the game.
Examples:
- Clash of Clans — gamers can purchase in-game currency to speed up construction and upgrades.
- Fortnite — sale of skins and other cosmetic items.
Tips for implementing IAP:
- Make sure the in-game purchases really add value but aren’t required to progress in the game. Otherwise, any players who don’t pay will leave.
- Experiment with a variety of price categories to satisfy different groups of players.
In-Game Advertisements
Ads are another widespread method of monetization, especially in free games. Developers can insert ads in different parts of the game. Ads let you earn money even if players don’t buy anything.
Types of ads:
- Rewarded ads — players receive a bonus for willingly watching an ad.
- Banner ads — the ad shows on the screen during the game, but doesn’t impede game progress.
- Interstitial ads — the ad shows during transitions between levels and screens.
Examples:
- Candy Crush Saga — shows ads between levels and gives players rewards for watching ads.
- Angry Birds 2 — players can watch an ad to receive additional lives or speed boosts.
Tips for implementation:
- Use rewarded ads to avoid disrupting gameplay.
- Assess the frequency of ads so they don’t annoy players or reduce their engagement.
Subscriptions
Players pay regularly to access content and possibilities. The developer receives a predictable, stable income.
Users who subscribe generally stay with the game longer.
Subscription types:
- Premium subscription — access to exclusive content or features.
- Pass — a battle pass or season pass that offers unique rewards.
- VIP Status — special privileges for subscribers.
Examples:
- Warcraft Arclight Rumble — players pay for a monthly subscription to access the game.
- The Elder Scrolls Online — uses a hybrid model: you can play for free after purchasing the base game, but a premium subscription (ESO Plus) grants access to DLC and other bonuses.
Tips for implementation:
- Offer unique advantages to subscribers to make them feel special.
- You can offer a free trial period to attract more new subscribers.
Gacha mechanics and loot boxes
Loot boxes and gacha mechanics allow players to spend real money to gain random items and rewards. This method causes excitement and makes users want to gain rare or valuable items.
Examples:
- Overwatch — loot boxes with random cosmetic items.
- Apex Legends — loot boxes contain random skins and other cosmetic items.
Tips for implementation:
- Be honest and transparent when describing the chances to receive different rewards.
- Make sure the mechanics aren’t seen as a trick or a way to exploit players’ weaknesses.
Limited-time events and offers
Limited-time offers create a feeling of urgency and encourage users to make purchases more quickly. Players will open the game more often to not miss out on special offers and take advantage of them.
Types of events and offers:
- Limited-time in-game events with unique rewards.
- Special offers for in-game items or currency.
- Monetized timers or buttons (such as “Extend” or “Repeat”).
Example:
- In Clash Royale, there are limited-time challenges and sales for in-game chests and currency.
Tips for implementing these mechanics:
- Plan out these events in advance and inform users of them through notifications.
- Create a balance between the frequency of the events and the availability of exclusive rewards to maintain interest without coming across as pushy.
Early access
This monetization model gives users the chance to pay for the game at the beginning stages of development—pre-alpha, alpha, or beta—and get access to an early full version.
Developers use the money they get from players to finish developing the game. People who buy early access help improve the game: they share feedback and make suggestions for improving the gaming process.
Early access is often used in indie games to help find financing. This model can be used in conjunction with crowdfunding.
Examples:
- ARK: Survival Evolved — this game started out in early access, where players helped test out the content before the official release.
- Hades — this game was available in early access, which let the developers gather reviews and improve the game before the official release.
Tips for implementing early access:
- Early access must offer a significant advantage or unique experience to be worth the cost.
- Make sure that early access doesn’t disrupt the game balance or upset the main audience.
Video game monetization requires planning and careful consideration of the interests of both the developers and the players. Choosing the right monetization model depends on the type of game, audience, and platform. The key is to make the choice that keeps players happy and willing to financially support the project.
How to increase income and maintain your reputation at the same time
You need to find a balance between earnings and player satisfaction. Here are some tips on finding that balance:
- Create gameplay that users enjoy. Add interesting features to make users feel like paying was worth it.
- Be honest and open regarding monetization. Explain to players what they’re paying for and make sure the purchases improve gameplay and aren’t just purchases for the sake of purchases.
- Analyze player behavior. Track what people buy and when they leave the game. If you notice problems, make changes.
- Experiment with different monetization mechanics. Implement subscriptions, limited-time offers, and bonuses for returning to the game. See what works best.
- Listen to player feedback. If they express unhappiness, change the game. Respect their opinion and answer their questions. This will help reinforce their trust in you.
- Place ads where they don’t disrupt gameplay. Offer something useful in return for watching an ad and include an option to disable ads for a small sum.
- Add social functionality so players can communicate and share their achievements. This will increase engagement and their desire to spend money.
- Update the game regularly to maintain gamer interest and stimulate them to spend money.
Bad examples of monetization
Some approaches to monetization can ruin the gaming experience for players and lose their trust. Here are some examples of what to avoid:
- Loot boxes with low chances. Players buy “surprises” with random items. Often the chances of receiving something valuable are quite low. This can lead to addiction, especially with children.
- Intrusive offers for purchases. The game constantly uses pop-up windows to offer purchases. This is annoying and stops players from enjoying the gameplay.
- Too many ads. Frequent, long ad videos disrupt the game and ruin the experience.
- Hidden expenses. The game isn’t honest about prices or includes additional payments without warning.
- High prices for purchases. If prices for in-game items or characters are too high, users often react negatively.
- Paid barriers to progress. The game intentionally slows down progress to force users to pay.
- Ignoring player complaints. Developers don’t listen to criticism regarding monetization.
- Pointless purchases. The gamers don’t feel like they’re getting something valuable for their money.
- Dishonest monetization in children’s games. Some games for children encourage payments and exploit the fact that children don’t understand the value of money.
Instead of these approaches, it’s best to create honest monetization systems that respect the players and give them real value for their money.
Frequently asked questions
What is game monetization?
Game monetization means converting user engagement into income. Whether it’s a mobile app or a console title, developers use different models to generate revenue: ads, purchases of virtual currency or items, or even paid access to new content. Good monetization starts with a clear strategy and strong understanding of user data.
How do you monetize a game?
You can monetize a game through in-app purchases, mobile ads, subscriptions, or by offering paid downloads. The right monetization model depends on your audience, game type, and platform (mobile, console, or PC). Using tools like GameAnalytics helps track user behavior, optimize levels, and improve your earnings.
Is it possible to earn $100 a day from ads in mobile games?
Yes, many mobile apps earn $100 or more per day from in-game ads. The amount depends on your daily active users, ad placement strategy, and how often users engage with ads. With a million downloads, even simple games can generate stable ad revenue, especially if supported by proper analytics and level design.
How much money does a mobile game with 1 million downloads make?
It varies. A mobile app with one million downloads might earn anywhere from a few thousand to hundreds of thousands of dollars. It depends on your monetization model, average revenue per user (ARPU), and user retention. Games that offer in-app purchases, currency bundles, or ad rewards often perform better.
Can you earn money by playing video games?
Absolutely. Gamers earn by streaming, joining e-sports tournaments, creating content, or testing games. With the right setup and accounts, it’s possible to turn gameplay into a steady income source, even more so if you combine it with affiliate links, guides, or fan content creation.
Should I monetize my game?
If you’re aiming to turn your game into a business or fund future development, then yes. Game monetization doesn’t always mean showing ads: there are flexible models like in-game purchases, subscriptions, or even limited-time offers. With the right strategy and data, you can balance monetization and user experience.
