Home
June 6, 2024
.png)
What is mobile game monetization?
5 effective mobile game monetization strategies
In the fast-paced world of mobile gaming, the key to building a successful and sustainable business lies in a well-crafted monetization strategy. As you continue to create engaging and immersive gaming experiences, you should also understand the importance of a robust monetization strategy to sustain growth in such a competitive climate.
From the start of in-app purchases (IAP) in 2009, to the introduction of direct-to-consumer (DTC) web shops today, the world of game monetization has come a long way. Evolving alongside player preferences and the advancement of mobile tech, modern monetization strategies have opened new avenues for revenue generation and player engagement alike – with the mobile game market expected to reach over $98B USD worldwide by the end of 2024.
Yet, while monetization remains a crucial part of any mobile game publisher’s strategy, it can be a complex landscape to fully grasp. In this article, we’ll cover the leading monetization models in mobile gaming, key metrics to track your revenue, and upcoming game monetization trends to keep an eye on.
Mobile game monetization refers to strategies, models, and tactics used by publishers to generate revenue from their games – from paywalling exclusive content through in-app purchases, to offering (un)limited access and experiences through tier-based subscriptions.
If you’ve ever wondered how a mobile game makes money, it’s most likely through one of the following monetization models:
It’s important to research and consider which monetization strategies your game should leverage early on in the development process, as it can greatly impact how you approach its overarching design. For example, a gameplay loop that’s designed to display ads at natural breaks will look very different from a gameplay loop that offers in-game purchases of power-ups to extend gameplay. By aligning your game design with your chosen monetization strategy from the outset, you can create a more cohesive gaming experience that integrates monetization elements without compromising player engagement.
Below, we’ll take a look at the five most common mobile game monetization models, with examples of popular titles that currently use these strategies to generate revenue.
👀 Related reading: Mobile gaming trends of 2024: Top 7 developments set to define the year
IAP-based monetization in mobile gaming allows players to enjoy the game for free, while offering additional bonus content, upgrades, features, or other in-game experiences for purchase. The in-app purchase model is one of the most popular monetization types for mobile games, with consumer spending in mobile games reaching $107.3B USD in total revenue last year alone.
While this game monetization model can work in almost any mobile title, in-app purchases are especially popular across certain genres. Here are the top mobile game genres for IAP monetization based on the share of revenue held by IAP in 2021, according to Statista:
Most in-game purchases come in two forms: durable and consumable IAPs. These refer to whether the IAP is a lasting purchase, like an exclusive weapon, or a temporary purchase, like a power-up.
Popular types of IAP in mobile games include:
Findings from our 2024 Mobile Gaming Spender Report show that the most popular types of IAPs that mobile game spenders purchase are in-game currency (52%), bundles (47%) and limited-time offers (42%).
Pricing of specific in-game purchase offers relies on the perceived value-to-cost ratio. It can also vary greatly depending on whether your IAP is a bundle of exclusive items or a small top-up on in-game currency.
According to SensorTower, the median price of IAP in 2020 was $5.99 USD. Meanwhile Unity’s Mobile Growth and Monetization 2023 Report more recently determined that $1.01–$5 USD is the “sweet spot” for IAP pricing to convert a player into a spender.
🌟 Check out our guide to in-app purchases for a full breakdown of IAP-based monetization, popular IAP types (with examples), and how to price IAP in your mobile games.
The ad-based monetization model for mobile games relies on offering free-to-play games that serve third-party ads during the gaming experience. According to Data.ai’s State of Mobile Gaming 2024 Report, ad revenue in mobile games is forecast to reach $402B USD in 2024, which would be an 11% increase from 2023. Similar to the IAP model, IAA is more popular in specific genres. Here are the top mobile game genres for IAA monetization based on its share of revenue in 2021, according to Statista:
In-game ads are a complex form of monetization that can vary across ad creative, placement, and more. Below are some examples of popular options for IAA in mobile games.
Types of ad placement:
Types of ad creative:
🌟 Check out our guide to in-app advertising for a full breakdown of how mobile game advertising works, types of in-game ads, and more.
Offerwalls are a popular monetization method for mobile games that involve presenting players with a list of third-party offers, surveys, videos, or tasks in exchange for in-game currency (among other rewards). They present a way to progress in the game and reward players without them having to spend on IAP.
According to Unity, offerwalls can represent approximately 33% of ad revenue for games using more than one monetization type, which can be especially effective when added to a hybrid monetization approach as a player-initiated, non-disruptive revenue source.
Offerwalls provide a collection of tasks directly from advertisers, for mobile players in and beyond the game. Here are some examples of what those offers could look like:
A subscription monetization model allows players to install a game for free, but charges a recurring fee for those who wish to access additional features, content, or other benefits. Such subscriptions made up 36% of mobile gaming app revenue in Q1 of 2022, with consumer spend on subscriptions in video games projected to reach $11B USD by 2025. While this is generally a popular type of mobile app monetization, it’s still considered a newer model for mobile games in particular.
Subscription prices are going to depend on the type of subscription model you integrate into your game, but a good starting point can be found in RevenueCat’s State of Subscription Apps 2024 Report, which details the most common price points for subscriptions.
🌟 Check out our guide to mobile game subscriptions for a full breakdown of subscription-based monetization, types of subscriptions (with examples), pricing strategy tips, and more.
The premium app monetization model for mobile games involves charging players an upfront fee to download and access the game, as opposed to relying on in-app purchases or advertisements to generate revenue. In this model, players pay a one-time price to unlock the full game experience without any additional costs during gameplay.
Paid app revenue in the gaming market reached a total of $1.27B USD in 2023, with an expectation to climb to $1.36B USD by the end of 2024. By offering a premium game, developers can potentially benefit from a more straightforward monetization strategy focused on player satisfaction and the ability to create immersive gameplay experiences without the constraints of free-to-play monetization models.
Paid mobile game pricing typically ranges from a few dollars to over $10 USD, with premium titles or established franchises potentially commanding higher prices. The pricing strategy for paid mobile games considers many factors, such as game quality, genre, content depth, target audience preferences, and whether or not the game has other monetization models present, like IAP.
The current top paid games on Google Play (as of May 2024) charge as follows:
The most common price for paid games in the top #20 on the Google Play Store is $4.99 USD, with the highest being $9.99 USD, and the lowest only $0.99 USD. Pricing your game around the $2.99–$6.99 USD mark is a good place to start, but be sure to continuously reevaluate it based on your user acquisition performance and player feedback.
LTV is the king of mobile app monetization metrics and represents the total revenue a player is expected to generate throughout their entire time as a player in the game. Because it relies on both retention and monetization, it’s a great holistic measurement for the success of your game.
UA publishing teams can also track campaign-specific LTV to better understand the impact of individual acquisition campaigns and sources. This allows them to better prioritize high-LTV channels so that acquired users are more likely to convert within the game on IAP, driving higher monetization revenue.
How to calculate LTV:
(Average revenue per daily active user) * (Average player’s lifetime in your game)
👀 Related reading: 6 essential mobile game retention metrics and how to calculate them
ARPU is the average revenue generated by each player over a specific period to provide insight into the monetization impact of a game. This metric is useful for assessing how effective your monetization is across your entire player base, and for deciphering your success at turning non-spending players into spenders to increase overall revenue and LTV.
How to calculate ARPU:
(Total revenue) / (Number of active players)
ARPPU is another popular mobile game monetization metric that narrows down the revenue focus to include only paying players, ultimately providing a focused view of monetization via spenders.
While ARPU gives an overall view of revenue generated across all users, ARPPU delves deeper into the spending patterns of the paying user segment. By highlighting paying users specifically, developers can tailor their monetization strategies more effectively to those users, and potentially increase revenue from the group.
How to calculate ARPPU:
(Total revenue) / (Number of active spenders)
ARPDAU is another revenue-based metric that measures the average revenue generated by each daily active user in your game to help paint a picture of daily monetization performance. With a granular look at revenue, ARPDAU can be particularly helpful to track the effectiveness of LiveOps initiatives, like in-game events, challenges, and promotions.
How to calculate ARPDAU:
(Total revenue) / (Daily active users)
eCPM is a core metric for mobile games that monetize through IAA. Essentially, it calculates the revenue generated per every thousand impressions (mille). This is an important metric for both publishers and advertisers involved in in-app advertising as it tracks the effectiveness of campaigns and specific ad placements. An ad placement in a game with a high eCPM means that it’s performing well for advertisers and you can charge more for that slot.
How to calculate eCPM:
(Total earnings from ad source / Total impressions) x 1000
The share of spenders metric tracks how many players have made at least one in-app purchase within a specific time period. By tracking share of spenders (D30), for example, you can see how effective your IAP-based mobile game is at converting players into spenders within the first 30 days of gameplay
In our 2023 Mobile Gaming Loyalty Report, we rank mobile game genres by key monetization and engagement metrics, which shows that Lifestyle games have the highest share of spenders by day 30.
How to calculate share of spenders:
(Players who made one or more IAP within X days of installation) / (Total number of active players by DX)
The ROAS metric tracks the effectiveness of your user acquisition campaigns. Basically, it calculates the amount of revenue generated from users through your mobile game’s monetization efforts for every dollar spent on acquiring those users.
There are a few specific types of ROAS based on the monetization models in use:
How to calculate ROAS:
(Revenue generated from acquisition campaign monetization) / (Cost of acquisition campaign)
👀 Related reading: Cracking the code to player loyalty: 6 metrics driving LTV
Candy Crush Saga is a Match-3 puzzle game first published by King back in 2012. It has since grown to over 1 billion downloads on the Google Play Store with an impressive 4.6 star rating.
In fact, as of 2023, Candy Crush Saga generated over $9B USD in revenue across all mobile platforms, while holding first place in the United States for consumer spend, according to Data.ai’s State of Mobile Gaming 2024 Report.
Monetization model: IAP, some IAA
While Candy Crush Saga monetizes predominantly through in-app purchases in their Shop, they’ve also implemented rewarded ads that players can watch for additional in-game benefits, like extra lives and boosters. While ads have been an on-and-off monetization model used in Candy Crush Saga since its initial release, the team at King currently states that ads are still a test feature.
Types of IAP in Candy Crush Saga:
Cats & Soup is an adorable cat-based Simulation game released by Korean publisher HIDEA – now part of NEOWIZ – in 2021. With over 10 million downloads on the Google Play Store and a 4.6 star rating, the game now generates roughly $230k–$270k USD in monthly revenue across iOS and Android (as of May 2024 according to data.ai).
Monetization model: IAA, IAP, and subscriptions
Cats & Soup monetizes predominantly through in-game ads but also offers a variety of IAP, along with a few subscription options.
Types of IAA in Cats & Soup:
Types of IAP in Cats & Soup:
Types of subscriptions in Cats & Soup:
Today, an ad-free version of the game is also available through Netflix Games as part of the app’s premium subscription.
Bloons TD 6 by Ninja Kiwi is a tower defense strategy game first released on iOS and Android in 2018. It has since gone cross-platform on PC, Mac, and console. The game has over 1 million downloads on the Google Play Store and a 4.8 star rating, generating over $650k USD in monthly store revenue on mobile (as of May 2024 according to data.ai).
Monetization model: Premium and IAP
This premium mobile game charges a one-time fee of $6.99 USD to install and play, while also offering a variety of in-app purchases for players to expand their gaming experience.
Types of IAP in Bloons TD 6:
Bloons TD 6 is also available for “free” with an active Netflix subscription (part of Netflix Games) or with an Apple Arcade subscription.
Much of your mobile game’s success hinges on the strategic selection of an appropriate monetization model that aligns with player preferences and game dynamics. Whether opting for in-app purchases, ads, subscriptions, or a hybrid approach, publishers must consider the delicate balance between generating revenue and providing a compelling, enjoyable experience for players. By analyzing player behavior, soliciting feedback, and staying attuned to industry trends, you can navigate the complex landscape of mobile game monetization more effectively.
If you’re looking to balance monetization and gameplay for long-term player loyalty and LTV growth, Mistplay’s loyalty-first approach can help. Find out how Futureplay Games lifted D7 ROAS by 23.7% – and reach out today to learn how you can unlock the power of your player loyalty.
