Video Game Design Business Monetization Models & Strategies

Looking back to video game design history, it has grown from its humble beginnings as a basic form of pleasure to a multibillion-dollar industry. The market value of the video game business, which has been expanding at a phenomenal rate, is predicted by 2025 to reach $300 billion. Due to the increasing interactive entertainment popularity and demand. 

However, creating a video game is no easy feat. It involves a complex process that requires a significant investment of time, effort, and money. According to the Electronic Entertainment Design and Research Institute, only 4% of video games are profitable, and only about 20% of games make it into store shelves. Therefore, game developers need a good strategy.

A monetization plan to help cover their production costs and yield profit. Suffice it to say, many video game design developers have also been wondering: how do I monetize my video game, and which mobile game monetization model should you choose? Well, the solid truth is that there are different ways to monetize a game, and your task is to find the right one.

This article will review the various monetization models and techniques that video game developers can adopt. But for beginners, the first thing we’d like to learn and understand is how the video game design business makes money.

How Video Game Design And Development Businesses Make Money

First off, to better understand how the video games industry makes money, let’s try and take a look at today’s video game market and mobile game business model in general.  Momentarily, a majority of the games on the market are free-to-play games. In most cases, some of these games make money by exposing players to microtransactions and/or in-game ads.

The other, less frequent type of video game on the market is paid games. If players wish to install and play these games, they need to pay a one-time fee first. It wasn’t always like this, though. Whereby, in the early days of the app stores, paid games ruled the mobile game market. However, nowadays, most players expect these games, especially, on mobile to be free.

On one hand, the biggest challenge in making money from F2P Mobile Game Models is making them work for both sides in the process – game developers and players. On the other hand, most developers want to earn as much money as possible, while players want to enjoy the games for free. And, as a result, this is where everything else gets tricky for us to fathom.

To enumerate, a lot of developers follow the money to the point they neglect their players. In the process, they ruin their overall User Experience (UX), block the players’ progress, and the like. Sure enough, a lot of players get frustrated and angry up to their breaking point; such that they can even uninstall the game. So, how do you avoid this from happening?

The Key Factors For Great Video Game Design Monetization Model

It’s only one word that we can tell developers – balance. Of course, it’s clear to point out that most players already know that the game developer needs to make money. For this reason, they expect to see monetization features in any given mobile video game design. As long as developers don’t go overboard with them, they will be able to keep and monetize their players.

Technically, mobile game monetization is the process of making money off a mobile and desktop game version. Usually, it includes different strategies and methods that game developers use to generate revenue from their games. However, building a quality video game takes a lot of time, effort, and resources. None of this is simple, and it’s not cheap either.

For this reason, you need to make sure your game is profitable enough to cover your development costs. Then again, your ultimate goal is to make money, not to maintain a zero balance. While some games become wildly profitable as soon as they get launched, for others, it takes years until they finally blossom. On the other hand, some games fail instantly.

All this depends on the quality of the mobile game but also on how developers handle monetization from scratch. With that in mind, before deciding on how to monetize your game, here are a few things that you should note:

1. Get The Foundation Right

If you have a passion for video game design, obtaining a degree in the field can be a great way to gain the necessary knowledge and skills. Getting the highly recommended and beneficial video game design degree in Florida or any other country that you are comfortable with, is a great option. The game design courses allow you to get all the knowledge and abilities.

Especially, as required to pursue a job in the field or enhance your productivity. Fortunately, there are accredited game design colleges. Let’s say that you choose video game design training in Florida. Here, you’ll find the best institutions in Florida, which provide some of the topmost best design and development programs in terms of video game creation. 

Besides, many people now prefer game design online courses, which you can access from anywhere. In this case, anyone globally can access the video game design degree in Florida at any time. These courses can give you a strong foundation in game creation, design, and programming. It can also offer you the chance to produce and present your own video games. 

In addition, many of these programs provide opportunities for internships and networking gatherings, which can help students develop crucial industry connections and gain practical experience. So, if you are new, you should consider starting from here.

2. Actualize Your Video Game Idea

Oftentimes, when someone says, “planning a video game,” what is your initial thought? Naturally, a lot of developers first think about the idea behind the game. Sure, the idea is important. However, thinking about how you will monetize your game is equally important. The thing is, you should be pondering how to monetize a game from the earliest design phases.

As soon as you start building your game, you should choose the primary monetization model. Once you do this, you’ve laid out the groundwork for your game. The monetization model you choose for your game will have an impact on many aspects of your game. For example, the game’s layout, user-based access dashboard, payment modes, level difficulty, features, etc.

For these reasons, it’s crucial to think about mobile game monetization during development. This is the only way to make sure your gameplay and monetization model will work well alongside each other. Don’t want to scare you – but this is one of the things that can make or break a game. Additionally, make sure to set and track Monetization KPIs right from the start.

3. Understand Your Audience

Understanding your target market is a crucial step in creating marketing plans that work and produce results. Obtaining insightful data that guide your marketing strategy entails digging deeper into the traits, tastes, and habits of your target market. Surprisingly, we all love discounts, and game publishers have to utilize this. Even more so, people like time-limited discounts.

According to Clevertap, they can outperform other types of promotions by 8%! Most game developers are aware of this. Therefore, time-limited IAP offers can be found in every genre and almost every game. That’s because this feature is almost universally applicable. You can design personalized and appealing ads, which resonate with your audience on a personal level.

You can increase engagement and conversion rates by thoroughly analyzing your target. While, at the same time, taking into account variables such as Age, Gender, Interests, Shopping History, and the like.

4. Display Your Monetization Knowledge 

Ultimately, it would help if you displayed mastery of the various earning methods and techniques available to game developers in your game design portfolio. Consider including a section in your portfolio that explains the theory behind the monetization plan and design choices you made for your game. As the game developer, show how you think this will work.

Must be remembered, that the ad-serving process happens through an ad network that best suits your game business by industry. This is a platform that connects publishers and advertisers. According to AppsFlyer, the top mobile game ad networks for in-app ads last year were AppLovin, Unity Ads, Meta, TikTok For Business, Google Ads, ironSource, etc.

In an ad network, publishers post whenever they have space they want to fill out with ads. The advertisers then bid on those ad placements hoping to win the ad slot. Finally, the ad network then picks out the winning ad. Overall, the aim of Ad networks is to bring the publisher as much revenue as possible. As a game developer, aim for the best ad network to deliver results.

5. Have A Seamless End-User-Based Support

Having a successful and great video game design business project does not everything else is fine. A lot of other things can go south so quickly. Such as hacking, bugs, error reports, downtimes, and the like. As such, it’s your role as the game developer to make sure that your target users get all the support they need whenever a crisis arises. Like providing them with early hints.

For example, ad monetization is something you need to be very careful about. The thing is, most players, don’t really like ads; they tolerate them. Plus, there are always some players who really hate them. If you plan on monetizing your game with ads, you need to be ready for a lot of “too many ads” reviews in the app stores. Find a way to resolve or manage such issues.

The Topmost Basic Business Principles For Your Video Game Design

Clearly, it’s worth mentioning that, as a game developer, as long as you stick to the basic principles and adhere to the rules of UI and UX design, quality and great mobile video game design have the potential to earn you billions of dollars. However, for this and other reasons, you need to create a great video game design strategy and master the game of monetization.

On that note, the right thing is to start by learning about a few video game design business monetization models that we are going to highlight herein. As a matter of fact, to make things even simpler for beginners, below is a free video tutorial with some basic principles that will help you to get started.  You can have a look at it and then proceed to our next section.

As a rule of thumb, picking out the right video game design business monetization model is one of the very first steps in the monetization process. By definition, video game design business monetization models — be it for desktop or mobile users — are the strategic steps that any given game developer uses to make money off the game.

As an example, if you look at the free-to-play game listings in the likes of Google Play or Apple Store, you will notice they say which video game design monetization models they use for these businesses. Understanding the various monetization options is the first step in comprehending the business of game design.

These can include:

• Subscription models
• In-game purchases
• Advertising

However, you must choose a monetization approach that supports the objectives of your game and is suitable for your target market. After all, if you decide to have ads in your game, you have plenty of options to do so. There are different types of in-game ads you can use, and they are called ad formats. Publishers can use only one or more ad formats at the same time.

Moreover, it’s important to mention that different ad formats come with different average eCPMs. This means, that some of them have a higher money-making potential for the publisher. Below are a few memorable mentions.

1. In-App Purchases

Basically, In-App Purchases (IAPs) are the most popular model of game monetization for mobile devices. IAPs have been used to monetize most mobile games. Players mostly in a country without a strong economy don’t have to pay anything to download and play games. However, they can make in-app purchases if they long for a premium in-game experience. 

Players can purchase certain game goods or features with real money when they make purchases. In-app purchases include additional lives, cash, weapons, moves, and boosters. Mostly, gamers can navigate to in-game shops by selecting an icon from their home screens. The items that players can purchase may be found in these virtual shops.

Sometimes, the entire product of the store is sold for actual cash. In other instances, gamers can purchase some goods and services using real money and others with in-game cash. 

2. In-App Advertising 

The advertising model is a method of game monetization where game designers make money by placing advertisements inside the game. Players in this model do not need to pay anything to play the game, but they will see the advertisements. Besides In-App Purchases, In-App Ads are the second most popular way for developers to monetize a video game design business.

In this model, game developers make money by serving advertisements to players. Players can get all the features in these games for free, but they have to watch ads as they play. Oftentimes, these are ads for other mobile games or non-gaming apps. That being said, there are three sides involved in the ad-serving process: Players, Publishers, and Advertisers.

The advertising model benefits developers by allowing them to make money from users who might not otherwise afford to buy the game. The drawback of this model is that it may annoy players and have a negative effect on their enjoyment of the game.

3. Subscription Method

Video game monetization can also use the subscription approach. Freemium mobile video games support the subscription model. Players cannot access the game unless they acquire the subscription. The free trial for the subscription-based monetization strategy is available. There are both auto-renewable and non-renewable subscription options.

Until the player cancels them, the auto-renewable subscriptions are continuously renewed. Non-renewing subscriptions, on the other hand, are manually renewed. To make the subscription model successful, game studios should take into account;

The following advice:

• Try to provide a variety of subscription models
• Try not to rely exclusively on one subscription model
• Convince the gamers you are trying to reach of the value of a subscription
• Give your subscribers missions, awards, coupons, etc., to keep them interested

4. The Pay-To-Play 

The most common form of monetization is pay-to-play, in which users pay a one-time charge to buy a game. According to this business model, game producers must pay upfront and rely on game sales to make money. Console and PC games have embraced this concept extensively, which is still used frequently in the sector.

Game developers benefit from the pay-to-play model since it allows them to predict their earnings and schedule their upcoming investments precisely. The drawback of this strategy is that players have little incentive to continue spending money on it after finishing the game.

5. Brand Collaboration 

The future of your game may lie in branded content or comprehensive product placement. A new era is approaching where users can express their digital personalities through their favorite brands and games. They can work with marketers to increase user engagement and profits. Developers should consider incorporating a few principles to drive their monetization.

Such as if companies could be ready to pay for product placement or sponsored content in their games. To succeed with this income source, try to unleash your imagination. For instance, the main character in a racing game can be portrayed as sporting a specific car brand. Anything that has happened in the actual world might likewise occur in this virtual state. 

Some Strategies And Tips For Optimal Game Monetization Revenue 

It’s, important to realize, that the center of almost every video game design economy is the in-game store. Whereby, in most cases, players can find in-game virtual stores by following an icon on their home screens and then they’ll find different things to purchase. Sometimes, all the offers in the store are sold for real money to the advantage of the game developer.

As a result, players can get some of the offerings with real money and others with in-game currency. Besides knowing the categories of in-app purchases, it’s useful to know some common forms they come to terms with. Always remember, there are so many ways to monetize a game. But, some game monetization features that work for other games won’t work for you.

Moving on, with the best video game design business monetization models in place, you’ll need defined strategies for the models to yield results. Below are a few things to consider when adopting some strategic games monetization plan to help you leap benefits. It would be best to decide which monetization model(s) to utilize and why before you start developing the game.

(a). Add Your Monetization Choice Early

One of the most common IAP features we can find in mobile games is Time-Limited offers. These are discounted offers, only available for a given time (like 24 hours). Another frequently used in-app purchase feature is Bundles to be precise. Basically, these are different items put together in one purchasable pack. Also, they commonly come at a discounted price.

You need to have the monetization strategy included in your mobile game. More precisely, it must be tightly connected with the user experience and primary game cycle of the game. That applies to all forms of revenue generation.

Including:

• Subscriptions
• Adverts
• In-app sales.

User retention is a measure that lets you know how well your game keeps players. Unfortunately, it’s a well-known fact that gamers naturally lose interest in games quite quickly. The game must be able to keep players engaged for a monetization plan to be successful. 

(b). Test All Functions

Testing allows you to determine what’s working and what’s not. With it, you can discover that some aspects function as intended, while others require adjustment. For example, if your game has in-app advertisements, you might notice too many ads displayed. You can also learn if players respond poorly to a particular ad format. For this to happen, do some research.

This includes keeping an eye on mobile video-based game monetization trends, top-grossing games, your competition, etc. By doing so, you’ll be able to track things like opt-in rates, drop rates, click rates, user experience, layout responsiveness, and the like. Moreover, your end goal should be to make your players as comfortable as they can to play your game longer.

(c). Avoid Pay To Win

When using in-app purchases, some developers fall into a trap. They create a revenue structure with paywalls so that gamers can access the entire game. This strategy leans towards pay-to-win, which most gamers dislike, and for a good reason. Instead, the products need to be a bonus, and players should be able to continue playing without having to pay. 

On a similar occasion, a lot of games purposely make players wait to finish some tasks in the game. This is where they stumble upon monetized wait timers. Players can then pay to skip wait times and continue with the game. One of the main things players want from games is to progress fast. For this reason, a lot of games offer them something that can directly help them out.

Such as offering them a way to purchase Boosts right from the game console. Still, there are items that don’t help players progress, but they are still popular purchases known as Cosmetic Items. They change the game appearance of characters or items. For example, clothes, hairstyles, weapon skins, etc. Instead of having a pay-to-win, use such game features.

Conclusion:

Video game development is a challenging process that costs a lot of time and money. Game developers have to employ a monetization strategy that generates income and gives players a positive gaming experience. This is an important way to ensure their businesses are profitable. 

Therefore, game developers can choose wisely and grow their businesses with the knowledge of the numerous monetization models and techniques. Moreover, game design training is vital for aspiring designers. It helps improve game quality, enhances the player experience, fuels innovation and creativity, develops collaboration skills, and opens up career opportunities.