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. They can either choose to monetize through a one-time payment, in-app purchases (also known as microtransactions), or via ad monetization. One time payments relate to premium paid apps, essentially meaning users get your game for an upfront price. In-app purchases and ad monetization offer a more recurring revenue stream, increasing user engagement, platform experience, and in-game earnings.

Mobile game monetization models

With the worldwide mobile gaming market excepted to hit $76B by the end of 2020, developers are looking for new ways to monetize. Popular mobile game monetization models to add to your monetization strategy include in-app advertising, in-app purchases, and one-time payments. In-app advertising and in-app purchases, in particular, are crucial monetization strategies for F2P (free-to-play) business models.

• In-app advertising: There are several ad formats to choose from, such as rewarded videos, banner ads, interstitials, and offerwall ads.
• In-app purchases: With 53% of a developer's revenue coming from in-app purchases, it's no wonder why the microtransactions business model is one of the most effective mobile game monetization strategies. IAPs also let developers manage their sales directly.
• Premium paid apps: Developers can 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 store.

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 and influencing their behavior.