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Game developers have several ways to monetize their games beyond the initial purchase event. For bigger studios, more established brands, or well-known franchises, generating revenue appears to happen easily and organically. Because people are familiar with the name of the studio or the game, it might seem they more readily open their wallets. But even those titles employ similar monetization mechanics.
The question then is, how can indie games come close to competing at the same level? By leveraging one of the best monetization strategies at their disposal: in-game purchases.
Free-to-play (F2P) games
Obviously, there is no real-world money exchange when a player acquires and installs a F2P game. Monetizing the game post-install becomes necessary to offset the development costs, and hopefully to also make a profit and reinvest in the team. Below we list existing strategies to generate revenue for F2P games and briefly outline their advantages (pros) and disadvantages (cons).
Advertising-based monetization, such as using in-game ads, or a one-time payment from the player to remove all ads
PRO
Keeps the game free for new and existing players
Motivates players to make initial purchase to remove ads forever
CON
Breaks players’ immersion in the game
Dealing with multiple third-party advertising providers can become a headache, especially when it comes to mediation or audience targeting
Advertisers might decide to stop their ads due to factors beyond your control
Ad content is not part of the game and doesn’t positively add to the players’ game experience, engagement or perceived value
Reward-based monetization, which requires the player to ‘do this task’ (eg. watch a video, take a survey) to get something in return (eg. access content or a cosmetic)
PRO
Same as above, plus players perform only the tasks they need for the content they want
CON
Same as above, plus makes it extra grindy for players
Lock content behind paywalls, sometimes also known as ‘pay-to-win’ depending on the type of content
PRO
Players pay for what they want, giving them a high level of control
CON
Limiting access to core game content until a purchase transaction can feel like the game is just squeezing money out of players artificially, especially if the game is F2P
Subscriptions, whether monthly, quarterly or annually
PRO
Offer what you want at different tiers to entice a broad player audience
Passive recurring revenue that players can easily manage on their own
No extra development resources needed
CON
Need a mechanism to drive up the subscription tier engagement and keep strong subs loyalty, as players may perceive diminishing value in their subscription plans after a few iterations
In-game purchases, via an in-game store with a variable catalog of virtual items and virtual currencies
PRO
Players pay only for what they want, giving them a high level of control
Allows players a very customizable in-game experience
Continuous and valuable player engagement via promotions, new and unique items, regional pricing and more
CON
Some development resources are needed – but if you integrate via the Xsolla In-Game Store, this is easily handled
Physical merchandise, such as apparel or tangible representations of in-game items
PRO
Real-world brand recognition
Player pride and investment in the brand and the game
CON
Handling the logistics and challenges of selling physical goods
A potential high up-front cost to create the merch
Premium games
Many of the same monetization strategies are available for pay-to-play games, though the first three listed above are not typically employed. Rather, premium games offer additional content like DLC or expansions as one-time purchases.
DLC or expansions, such as new zones, questlines, cosmetics, or weapons
PRO
Extra content extends the life of the game and can attract a new audience
Players pay for what they want, getting a high level of control
CON
Increased development resources needed
Players’ future expectations increased
plus #4, #5, and #6 from the F2P list
The best game monetization strategy for indie devs
Now that you’ve familiarized yourself with the typical monetization avenues, you might guess that the best revenue strategy for game monetization is to actually mix strategies. But if you had to just choose one, or you’re a smaller studio, we recommend starting with in-game purchases.
In a nutshell, incorporating an in-game store adds up all the pros and mitigates the cons of several different revenue streams. Essentially, it allows you to offer a high level of control and customization for your players – and thus frequently have them log in and interact in your game – while providing you with on-going revenue. You can also easily promote your in-game purchases externally, such as on your game’s website, with advertising or organic social media posts.
An in-game store allows developers to:
sell virtual items and virtual currencies, which include DLC, subscriptions, bundles (like supporter packs), season passes, battle passes, and more
create a shop in one place and offer it across platforms, such as on the web, with immediate access/delivery to in-game account
not worry about dealing with advertisers or multiple third parties
easily change and adapt to player preferences
give players a high level of control over customization and content purchases
obtain valuable information on purchases and transactions
How to get started
1. Get a free copy of our ebooks. Learn all you need about how and why to set up your in-game store.
2. Partner with Xsolla. We know that planning your revenue model doesn’t happen overnight. That’s why teaming up with a partner like us is valuable. We understand the unique challenges of video game commerce and can help you navigate them — so you can focus on what you do best.
Game developers have several ways to monetize their games beyond the initial purchase event. For bigger studios, more established brands, or well-known franchises, generating revenue appears to happen easily and organically. Because people are familiar with the name of the studio or the game, it might seem they more readily open their wallets. But even those titles employ similar monetization mechanics.
The question then is, how can indie games come close to competing at the same level? By leveraging one of the best monetization strategies at their disposal: in-game purchases.
Free-to-play (F2P) games
Obviously, there is no real-world money exchange when a player acquires and installs a F2P game. Monetizing the game post-install becomes necessary to offset the development costs, and hopefully to also make a profit and reinvest in the team. Below we list existing strategies to generate revenue for F2P games and briefly outline their advantages (pros) and disadvantages (cons).
Advertising-based monetization, such as using in-game ads, or a one-time payment from the player to remove all ads
PRO
Keeps the game free for new and existing players
Motivates players to make initial purchase to remove ads forever
CON
Breaks players’ immersion in the game
Dealing with multiple third-party advertising providers can become a headache, especially when it comes to mediation or audience targeting
Advertisers might decide to stop their ads due to factors beyond your control
Ad content is not part of the game and doesn’t positively add to the players’ game experience, engagement or perceived value
Reward-based monetization, which requires the player to ‘do this task’ (eg. watch a video, take a survey) to get something in return (eg. access content or a cosmetic)
PRO
Same as above, plus players perform only the tasks they need for the content they want
CON
Same as above, plus makes it extra grindy for players
Lock content behind paywalls, sometimes also known as ‘pay-to-win’ depending on the type of content
PRO
Players pay for what they want, giving them a high level of control
CON
Limiting access to core game content until a purchase transaction can feel like the game is just squeezing money out of players artificially, especially if the game is F2P
Subscriptions, whether monthly, quarterly or annually
PRO
Offer what you want at different tiers to entice a broad player audience
Passive recurring revenue that players can easily manage on their own
No extra development resources needed
CON
Need a mechanism to drive up the subscription tier engagement and keep strong subs loyalty, as players may perceive diminishing value in their subscription plans after a few iterations
In-game purchases, via an in-game store with a variable catalog of virtual items and virtual currencies
PRO
Players pay only for what they want, giving them a high level of control
Allows players a very customizable in-game experience
Continuous and valuable player engagement via promotions, new and unique items, regional pricing and more
CON
Some development resources are needed – but if you integrate via the Xsolla In-Game Store, this is easily handled
Physical merchandise, such as apparel or tangible representations of in-game items
PRO
Real-world brand recognition
Player pride and investment in the brand and the game
CON
Handling the logistics and challenges of selling physical goods
A potential high up-front cost to create the merch
Premium games
Many of the same monetization strategies are available for pay-to-play games, though the first three listed above are not typically employed. Rather, premium games offer additional content like DLC or expansions as one-time purchases.
DLC or expansions, such as new zones, questlines, cosmetics, or weapons
PRO
Extra content extends the life of the game and can attract a new audience
Players pay for what they want, getting a high level of control
CON
Increased development resources needed
Players’ future expectations increased
plus #4, #5, and #6 from the F2P list
The best game monetization strategy for indie devs
Now that you’ve familiarized yourself with the typical monetization avenues, you might guess that the best revenue strategy for game monetization is to actually mix strategies. But if you had to just choose one, or you’re a smaller studio, we recommend starting with in-game purchases.
In a nutshell, incorporating an in-game store adds up all the pros and mitigates the cons of several different revenue streams. Essentially, it allows you to offer a high level of control and customization for your players – and thus frequently have them log in and interact in your game – while providing you with on-going revenue. You can also easily promote your in-game purchases externally, such as on your game’s website, with advertising or organic social media posts.
An in-game store allows developers to:
sell virtual items and virtual currencies, which include DLC, subscriptions, bundles (like supporter packs), season passes, battle passes, and more
create a shop in one place and offer it across platforms, such as on the web, with immediate access/delivery to in-game account
not worry about dealing with advertisers or multiple third parties
easily change and adapt to player preferences
give players a high level of control over customization and content purchases
obtain valuable information on purchases and transactions
How to get started
1. Get a free copy of our ebooks. Learn all you need about how and why to set up your in-game store.
2. Partner with Xsolla. We know that planning your revenue model doesn’t happen overnight. That’s why teaming up with a partner like us is valuable. We understand the unique challenges of video game commerce and can help you navigate them — so you can focus on what you do best.
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