Playing free-to-play mobile games are trending nowadays. Free-to-play (F2P) games are bringing huge revenues for the companies, and frankly, these games are bringing in Millions or even Billions of Dollars.
But, have you ever wondered how these games make money? What is the preferred method of earning money by game companies? Even though the games are free, how are these companies generating revenue?
In this article, we will have a look at how do F2P (free-to-play) games make money, and we will list down x proven strategies to do so.
Paid vs Free Games
Before jumping to how the free games make money, let’s have a look at what benefits or drawbacks the free games have when compared to the paid games.
| Free Games | Paid Games |
|---|---|
| More downloads. | Fewer downloads. |
| More Reviews. | Less Reviews. |
| Lower customer expectation. | Higher customer expectation. |
| Lower customer retention. | Higher customer retention. |
| Higher Visibility. | Lower Visibility. |
| Can opt for in-game advertisement. | Mostly in-game advertisements are not used. |
| The user will uninstall the app whenever they feel like it. | You get loyal customers and so they will refrain from uninstalling the game. |
| Less expensive to develop. | More expensive to develop. |
| Multiple monetization options. | Limited monetization options. |
| Helps in building a brand image. | Due to less number of downloads, building the brand image is a hefty task. |
How do F2P (free-to-play) games make money in 2023? [8 Proven Strategies]
1. Advertisement
The biggest source of earning for free-to-play (F2P) games is indeed Advertisement.
According to InMobi, mobile users are a lot more likely to click on ads in a mobile app than on a mobile website. In-app ads served worldwide, which grabbed 80% of impressions, garnered an average click-through rate (CTR) about 2.8x higher than those placed on the mobile web.
Also, according to the latest report and study by Statista, here are the details on mobile advertising spending in the year 2022 and expected in 2024.
- The year 2022: $336 Billion
- Expected in 2024: $412 Billion
There are various types of Ads that the free mobile games use:
— Display Ads
These ads are the most standard ads used in free mobile games. These include static ads, dynamic display ads, banner ads, video ads, and pop-up ads. These ads do not occupy the full screen. Usually, small banners are used to display ads.
— Interstitial Ads
These ads should be named interval ads as these ads are shown in the interval period. Suppose you have finished a level and you have to go to the next level, these types of ads will come exactly at that time.
For example, Rayman Adventure requires the players to watch a 30-second video between each level.
— Incentivized Ads
Incentivized Ads are mostly used for mobile games. These types of ads will provide you with an incentive if you will watch the ad. You can get a boost or in-game currency or diamonds, etc.
These types of ads simply give the users the reason to watch as many ads as they possibly can. But, the reward should be special and not something that the user can easily get, or else no one will watch the ad.
— Contextual Ads
Contextual Ads are another commonly used type of free mobile game ads. These ads are a part of the gameplay. They are integrated into the game. You can see brand logos and posters in Pokemon Go Pokestops, in the streets of grand theft auto, or at the stadium/ground in football games.
2. In-game Purchases
In this model, the game will offer various skins, weapons, power-ups, lives, etc that the users can buy at their will.
The gameplay will be totally free and the users can play the full game without buying anything, however, the everything will be limited, for example there can be a game that uses energy to play each level. One energy takes 30 minutes to replenish, now the users can either wait for 30 minutes to play another level, or they can buy the energy via in-game purchase.
The game can also offer various premium skins. These skins are a sure way to attract the hardcore gamers to buy them.
These games also offer in-game coins or diamonds as an in-game purchase.
According to Statista, in 2021, global gaming audiences spent an approximate 61 billion U.S. dollars on additional in-game content. In 2025, the market value of in-game purchases is projected to surpass 74.4 billion U.S. dollars.
3. Subscription
In the subscription model, the users will get extra benefits that will also be known as VIP benefits.
The players will be able to get more lives, more money out of each level, special power-ups, exclusive skins, and so on.
The players will have to buy the subscription every month, quarterly or yearly. The extra benefits that the players get is the key attraction of the subscription based model.
The another application of this strategy is to provide a free version of the game that is limited to certain levels or for certain time. After the players have played your game, they can decide if they want to subscribe to your game to continue playing the other levels or not.
However, in this model, the first one is more prevalent.
4. Data Monetization
Data is the new gold.
When the users interact with the free game, they leave various insights about their behavior, their likes, and dislikes. With data insights, the company can know which user is really using the game and is important, and which users are not using the game.
A recent study showed that 20 percent of users never used a game again after using it only once. In other words, a considerable chunk of those new users acquired may not engage on any level other than the initial download.
So when the company knows which users are the best users for them, they can focus more on them. Moreover, this data will also help in determining which type of users the game needs, so they can target the users.
Also, the data collected has a great value outside the business.
5. Real Money Games
Apps like Fantasy Cricket etc, use real money to enter and play each game.
This way, whenever the user will play a game, they will pay money for the same. A percentage of the total money that is collected for the game is kept by the company.
The real money category is a golden jackpot, as the risk is only for the users, as they will either win or they will lose. But for the game, it will earn money for each bet that is placed.
The more players the game has, the more tournaments they can hold , and each tournament will bring a hefty amount of money for the game.
6. Removing Ads
Ads are very annoying to the users, and this is something that every developer knows, but how can they earn money from their free mobile game if there are no ads?
A simple yet innovative idea is to remove ads. However, the users have to pay to get the ads removed. If they want to have an uninterrupted experience while playing or using the free game, then they can do so by paying the developer to remove the ads.
This way, the users who have complaints with the ads can simply remove them, and the other users can simply use the game with the ads.
7. Selling exclusive brand products
Sell exclusive merchandise like clothes, figures, personalized products from the game. They can work as a great source of income for the free mobile game. However, before you start earning from this source, you have to make a great following of your game.
For people to buy exclusive products of the game, it is very important that the game, its character, or the brand is famous among the users, or else they won’t be interested in the exclusive products. Therefore, this monetization strategy can be adopted only after you have a good number of users as your fanbase.
Products of other brands can also be used to be sold in the game. These products can be effectively showcased in the game, and a pop-up can take the users to the buying link.
8. Crowdfunding
With more than 20,000 games launched on app stores every month, many games go unnoticed by the gamers and also by these stores. Getting discovered is a very hard task for the new game.
But what if the players already knew about the game, and are anticipating the game’s launch?
The game will perform splendidly on the opening week, and so will earn the recognition of the gamers as well as of the app stores.
This is what crowdfunding helps your game achieve. With crowdfunding, you can create anticipation for your game, and so when it is launched, it is sure to be a hit.
After the successful launch, you will be sure to earn a great revenue.
Tips for Choosing the Best F2P Mobile Game Monetization Strategy
1. Understand your game type
The first thing that you have to do before you decide your monetization strategy is to understand the type of your game.
For example, if it is a basic card game like Teen Patti, then you can go for the real money monetization strategy. If not, you can also opt for the in-game purchases where the users can buy skins for the cards and the tables. Also, you can sell in-game currency and diamonds. You can also use the advertisement strategy.
2. Competitor Analysis
There will be hundreds and thousands of apps out there which are either totally, or in some way similar to your game. Find such games, and analyze which strategy they are using.
With a proper study of your competitors, you will get a better idea of which monetization strategy you should use.
3. Analyze the Target Audience
You will earn from the audience, and so you should keep them at the center while deciding your monetization strategy.
How much is your audience willing to pay, and how will you attract that audience?
Will your strategy hinder the audience or annoy them in any way? Is what you are offering really valuable to the customer that they will pay?
Answer these questions and you will be able to move aside all the options that you have, and you will come up with the perfect strategy.
Conclusion
Now that you have learned about all the ways that a f2p games can be monetized using, and you know how to choose the right strategy, you are good to go. Get your game developed by the professionals, and use the right monetization strategy to make a fortune out of your game.
This concludes our list of the free-to-play game monetization strategies and how to find the right one for your free game. Do let us know in the comment section, which is the most appealing and profitable strategy according to you.
Also, if you think we have missed a strategy or so, do let us know.
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