Playing free-to-play mobile games is trending nowadays. Free-to-play (F2P) games are bringing huge revenues for companies, and frankly, these games are bringing in Millions or even Billions of Dollars.
Free-to-play online and downloadable games have transformed the video games industry. Paradoxically, those games where no financial transaction whatsoever is required to start playing (and to continue playing to the end) now generate a bigger revenue for developers than games that are purchased in the traditional way.
In this article, we will have a look at how F2P (free-to-play) games make money, and we will list down proven strategies to do so.
Paid vs Free Games
| Free Games | Paid Games |
| More downloads. | Fewer downloads. |
| More Reviews. | Fewer Reviews. |
| Lower customer expectations. | Higher customer expectations. |
| Lower customer retention. | Higher customer retention. |
| Higher Visibility. | Lower Visibility. |
| Can opt for in-game advertisements. | 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 Free Games Make Money?
There are many ways that free games make money, for example;
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 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 watch the ad. You can get a boost or in-game currency or diamonds, etc.
These types of ads simply give the users a 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 Pokémon Go, Pokestops, in the streets of grand theft auto, or at the stadium/ground in football games.
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 free, and the users can play the full game without buying anything, however, 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 30 minutes to play another level or buy the energy via in-game purchase.
The game can also offer various premium skins. These skins are a sure way to attract 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 approximately 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.
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 are the key attraction of the subscription-based model.
Another application of this strategy is to provide a free version of the game that is limited to certain levels or for a certain time. After the players have played your game, they can decide if they want to subscribe to it to continue playing the other levels.
However, in this model, the first one is more prevalent.
Data Monetization
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 using the game, which is important, and which users are not using the game.
A recent study from Localytics 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 great value outside the business.
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.
Removing Ads
Ads are very annoying to some 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 about the ads can simply remove them, and the other users can simply use the game with the ads.
Selling exclusive brand products
Sell exclusive merchandise like clothes, figures, and 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 must make a great following for 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.
Crowdfunding
With more than 20,000 games launched on app stores every month, many games go unnoticed by gamers and 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 in 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, so when it is launched, it is sure to be a hit.
After the successful launch, you will be sure to earn great revenue.
Conclusion
Free-to-play games (F2P Games) have become a huge part of the gaming industry over the past few years with the release of games as huge as Fortnite, Apex Legends, and First Person Shooter giant Call Of Duty releasing f2p game Call Of Duty Warzone.
These games are among the top-rated and highest-earning games of all time. These games make their revenue through selling cosmetic skins and in-game currency.
