The most successful games aren't just fun to play — they're built with clear revenue strategies that feel natural to players. Will your players watch ads? Buy extra features? Pay for a subscription?
Whether you're working on your first game or looking to improve an existing one, understanding your options for earning revenue with your app helps you create something that both you and your players will enjoy.
What is mobile game monetization?
Mobile game monetization is a strategy that game developers use to earn money with their mobile games. Here are the most common ways to earn revenue with your gaming app:
- In-app advertising: Banner ads at the bottom of game screens or full-screen ads between levels that users may watch to receive a reward. Many players prefer watching ads to paying money, especially in simpler casual games.
- In-app purchases (IAPs): Players get the game for free but can buy extra items as they play.
- Advertising + IAPs combined: Developers let players support the game either by watching ads or spending money on additional in-game content.
- Subscriptions: Players pay monthly for extra features or to remove ads. This works well for games that keep adding new game content, giving players a reason to stay subscribed.
- Paid access: Charging once to play the game. While less common now, some premium games still use this to offer a complete experience without extra costs.
Why early planning is important for game monetization
It’s important to plan your monetization strategy at the very start of game development. You can’t first create the game and then think, “What will we sell?” Unnecessary steps and random purchase offers can disrupt the players’ experience, frustrating the users and lowering your chances of monetization.
Key aspects to consider:
- Gameplay: If players can’t progress in the game without buying something first, they might quit the game for good.
- Design: Overly aggressive purchase prompts or unattractive ad banners can distract players and ruin the gaming experience.
- User experience: Developers should focus on what motivates and engages players, offering useful features without being intrusive or annoying.
Striking the right balance between enjoyment and optional upgrades can keep the players engaged and boost your revenue.
Popular monetization models for mobile games
Here are the most popular models for game monetization: freemium, subscriptions, ads, one-time purchases, or a mix.
- In hyper-casual games, it’s common to use an ads-based model. Players will enjoy the game without restrictions, but also see partner ads from time to time.
- Freemium games are free to play, but as players get more into the game, they can buy extra stuff (IAPs). These include boosters, in-game currency, new characters, and items. Developers can sell these items in bundles with limited-time offers or make them available through subscriptions.
- With subscriptions, players make regular payments to continue their access to the game. Subscriptions often come with free trials.
- Finally, you can also use a hybrid approach to maximize revenue. For example, combining ads and freemium can attract different audiences and diversify income streams.
Video ads and other in-app advertising formats
The in-game ad model lets players enjoy free gameplay while developers earn revenue from ads. Typically, in-app advertising is one of the easiest ways to start monetizing an app.
There are five main ad formats in mobile games:
- Banners. Ads appear on the game screen. They should be unobtrusive and not interfere with the gameplay.
- Interstitial ads. Full-screen ads that appear during natural breaks in gameplay, like between levels or when opening a menu. They don’t disrupt the experience.
- Offer walls. Players complete tasks from a list to earn rewards.
- Interactive ads. To earn a reward, players need to engage with the ad, such as shaking their phone.
- Rewarded ads. Players watch an ad to earn rewards, like in-game currency or items.
Developers use a metric called eCPM (revenue per 1,000 ad impressions) to evaluate ad performance. For example, banner ads have a low eCPM, while native ads and rewarded video ads are more engaging and generate higher revenue.
In-app purchases (IAPs) for revenue generation
In games with in-app purchases (IAPs), players buy items from the in-game store to enhance their experience. These may include boosters, in-game currency, extra characters, or special items. In 2023, developers of mid-core games, such as RPGs and strategy games, earned the most from IAPs.
There are two types of IAPs:
- Consumable items. These are used up after a single use, like health boosts or building speed-ups.
- Non-consumable items. These are permanent, such as character outfits, weapons, or access to levels.
Consumable items encourage players to buy more often to keep the game running smoothly, while non-consumable items provide long-term value, giving players reasons to keep coming back.
When offering IAPs, it’s important to consider the players’ needs, how much they’re willing to spend, and how often they’re likely to make purchases.
Subscription-based models for mobile games
The subscription model lets developers earn regular income by offering players ongoing in-game perks.
Here are three common types of subscription models:
- No ads: Players pay to remove ads, making their experience smoother. This small payment turns free users into paying ones and keeps them more engaged.
- Battle pass: Players buy access to special seasonal challenges and rewards, encouraging them to spend more time in the game.
- VIP access: Players pay for exclusive benefits like faster progress or unique character skins. This appeals to those willing to spend more for premium features.
Subscriptions bring steady income and help keep players around longer. Free trials and different pricing tiers can attract players with different budgets.
Combining models with a hybrid monetization strategy
Developers can boost profits from different player groups by using a hybrid monetization strategy. Mobile games often combine ads and in-app purchases, appealing to both free players and those willing to pay for content.
This hybrid model increases engagement across various audiences and provides developers with multiple revenue streams.
Essential KPIs for measuring game monetization
Game developers track how well their monetization works by looking at key metrics. Here are the main ones for mobile games:
- ARPU (Average Revenue Per User). This shows how much money, on average, each player spends. Sometimes, they exclude big spenders ("whales") to get more accurate numbers.
- LTV (Lifetime Value): The total amount of money a player spends while they play the game.
- CPI (Cost Per Install): How much it costs to get a new player through ads or marketing. Comparing LTV to CPI shows if the game makes enough money to cover its marketing costs.
- Retention rate: How many players keep coming back to the game. A high retention rate means people enjoy the game, which usually leads to better monetization.
How to choose the right monetization strategy for your game
Different game genres and player groups need different ways to monetize. Simple, hyper-casual games that attract a lot of players usually use ads. More complex games, like hardcore or mid-core, often use in-app purchases (IAPs) and subscriptions.
To pick the right way to make money from your game, you need to understand your audience — what they like, how they play, and how much they’re willing to spend. It’s also useful to check what other games in your category are doing and see what’s working for them.
Best practices to maximize mobile game revenue
You can increase monetization revenue using both business and psychological strategies.
Successful developers use 4 popular techniques:
- A/B testing. For example, testing two different ad banner sizes can help determine which performs better.
- Personalized gameplay. Start by segmenting your audience into groups. A personalized in-game store can offer items based on a player’s behavior, activity level, and spending habits.
- Limited-time offers. Creating a sense of urgency with time-sensitive deals encourages players to spend more.
- Social features and gamification. Adding features like clans, guilds, or chat options increases player retention and boosts in-game purchases.
Before you go
When using these strategies, remember to balance effective monetization with an enjoyable player experience. One way to do this is by choosing an ad network that helps you match ads to your players’ preferences.
Yango Ad Network offers advanced audience targeting, a variety of ad formats, and high-quality demand sources, helping you maximize ad revenue without compromising the players’ experience.
