Mobile game business models
How do mobile games make money
Starting a mobile game company? A mobile game business model is a monetization strategy developers use to drive revenue for their app. You can either choose to monetize through a one-time payment, in-app purchases (also known as microtransactions), or ad monetization.
Mobile game monetization models
Popular mobile game monetization models to add to your monetization strategy include in-app advertising, in-app purchases, and one-time payments:
- In-app purchases (IAPs): Developers can offer users in-app rewards and services in exchange for real money payments. The most common in-app purchases games offer include: coins, extra moves, extra health, power-ups, skins, and bonus levels.
- In-app advertising: Because only 3% of users tend to make in-app purchases, most developers incorporate other mobile game business models to engage the other 97% - most commonly, in-app advertising. There are several ad formats to choose from - including user-initiated ads such as such as rewarded videos and offerwall ads, as well as system-initiated ads such as banner ads and interstitials.
- Premium paid apps: Developers can sell their app on the app stores for a one-time payment. It’s best monetize with premium paid apps only if a mobile game has a strong value proposition and little to no competitors providing the same characteristics and quality within the genre. This model might turn away a majority of players accustomed to engaging with an app before they buy, but holding to high standards allows premium paid apps to do well in the app stores.
How much do mobile game ads make?
According to eMarketer, ad spend in all games grew 16% in 2019, and expected to exceed $3 billion in 2020. Mobile game ads prove to be one of the most effective ways of generating considerable revenue for mobile game developers, while engaging users without compromising on user experience.