Video games are no longer just a form of entertainment. Both indie games and blockbuster games are now also big businesses. In line with this, finding the right way to earn money from a game is key to long-term success. While doing so sounds like an easy task, there are many things to consider. And one good way to start is to understand monetization models — how they work and what makes each one unique.
This article explains what monetization models are, along with some of the available options.
What is a Monetization Model?
In general, a monetization model serves as a detailed guide that shows how a business earns money from its assets. Each model differs depending on the business nature and the target market.
As for a monetization model in gaming, it refers to the strategic approach a developer or studio could take to generate money with their games. In short, it is how a game brings income.
In line with this, developers must understand that this concept is more than an afterthought. With today’s gaming industry growing more diverse in how games are sold and supported, monetization models are now what keep things going. At the same time, they influence development decisions, build expectations, and determine success.
Types of Monetization Models
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Free-to-Play Model (F2P)
The free-to-play model allows players to access a game for free, while it earns revenue differently. Instead of paying up front, gamers would spend money on in-game items.
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Ad-Based Model
An ad-based model also keeps the game free and makes money by displaying ads in-game. Some of these include banner ads, interstitial ads, native ads, playable ads, and rewarded ads.
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Subscription Model
The subscription model requires players to pay a recurring fee to access the game. Most of the time, the fee unlocks additional perks, premium features, exclusive content, and an ad-free experience.
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Premium Model
A premium model is basically a pay-to-own setup. Specifically, it asks players to pay a one-time fee to access the entire game with all its offerings.
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Sponsorship Model
The sponsorship model generally works by having brands pay to get their logo or products featured inside the game. In turn, the creators earn revenue while having the option to keep the game free for players.
Key Factors in Choosing a Monetization Model
In selecting a model for a game, developers need to consider the following factors:
- Genre of the game
- Target Audience (including playing and spending behavior)
- Market dynamics of the platform
- Updates and content drop frequency
Evaluating these factors helps developers align their strategy with goals.
Key Takeaways
Remember that having a solid monetization plan is necessary before choosing among the monetization models. More importantly, one must learn that there is no single best choice. In fact, some even combine monetization models. The goal should be to achieve a balance between profitability and player satisfaction. It is to keep things competitive for the developers and the game fun and fair for players.
Note: To ensure accuracy and depth, this article integrates information from Meta, Moesif, Playwire, Setupad, and The Game Marketer.
