How Do Gaming Apps Make Money-Interesting Facts

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On June 4, 2022

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How Do Gaming Apps Make Money

The gaming industry is one of the most grossing industries worldwide. The usage of mobile phones and gaming is becoming more popular by the day. People love to play games either simple or complex on their smartphones as they are easy to access and are a perfect source of fun. But how do gaming apps make money? Are these paid and free gaming apps profitable for the developers? These are just a few basic questions that can be easily understood by analyzing how apps make money.
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Gaming Apps Quick Stats

The gaming app developers use different strategies to monetize the apps and drive revenue from them. The top 200 apps make an average of $82,500 daily in revenue. The top 800 apps earn about $3,500 daily in revenue. The gaming app developers have a number of options to monetize their apps either by one-time payments, in-app purchases, or using advertisements.

The gaming application industry has a huge potential of earning millions of dollars. It mainly depends on the app, its graphics, and user simplicity and sometimes it’s all a matter of luck. The gaming app development process for monetization is the same for Android as well as iOS. However, as mentioned earlier not every app that comes on the market enjoys the same success. Therefore, before starting up, the question of “how do gaming apps make money?” should be thoroughly understood.
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Before we dive into the methods, let’s look at the statistics of the gaming apps. The application stores of your smart devices whether App Store or Google Play store have about 5.50 million downloadable apps. Most of which are gaming apps and you will find an app for whatever game you can think of. This means that the competition is quite tough. Therefore, it is very important to know how to properly use the methods to monetize your gaming apps.

Let’s look at the methods of making money from gaming apps;

Methods to Monetize Gaming Apps

Paid Games

This has to be the most obvious method of making money from gaming apps. Paid games are a direct and straightforward method of gamers to earn money from their games. This is a method that is preferred by a lot of people as they wish to avoid apps having in-app purchases and in-app ads, as they can get annoying after a certain limit.

This method, how easy it may seem, has its challenges. Paid games have to be one of a kind with a strong proposition so that people are actually willing to pay for it. Having a well standard and a good price for the gaming app requires it to perform exceptionally well in the App store as well as Play Store.

We can take the example of one of the most famous gaming apps with exceptional performance, Minecraft. Minecraft can be downloaded from the app store of your device by one-time purchase. It can be played infinitely without having to pay again. This game doesn’t have in-game ads or pop-ups. This means you can buy it once and own it forever.

Paid Subscription and Premium Services

This is another of the direct methods used by developers to monetize their gaming apps. They get paid by providing paid subscriptions or premium services. The gamers have to pay on a monthly or annual basis to enjoy the games. This method of payment is popular in Massively Multiplayer Online games MMOs.

Like the one-time payment apps, apps with this feature must also keep the quality of the game interesting with constant upgrades to maintain the interest of its gamers. They are required to provide excellent content and quality to keep the gamers engaged in their app.
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PubMatic’s Study in 2019, showed that 45% budget of the media buyers was allocated for mobile platforms and 56% of the respondents believed that in-app advertisements was more effective at targeting audiences than any other methods. The publishers get paid whenever the user sees the ad or interacts with it. There are various types of mobile gaming app advertising methods:

Native Ads
These ads are the simplest ones, as sometimes the gamers might not even notice them. They are usually targeted on the basis of the past activities, interests, and other data. These ads are the most efficient revenue streams as they are the least annoying and intrusive type of ads.

Interstitial Ads
These are considered to be one of the most annoying ones. They pop up on the entire screen and are displayed periodically. They usually have a close button on the corner to close them. They appear periodically, meaning in gaming apps they usually appear before or after the new content is displayed. These ads are rich of media, in the form of video, audio or text.

Video Ads
These types of ads play automatically during the natural pauses and the video lasts up to 10-30 seconds. These videos may be played in the gaming apps as a reward for some in-app perks which may include extra points, diamonds, bonuses, extra lives or any other additional features. They have leverage for the gamers, so it can be considered as one of the most effective methods as well.

Incentivized Ads
These ads are based on gamers’ interactions. They require the gamer to fill out some form of some kind of survey or share their content, etc. Like the previous advertisement method, this method may also be used to reward the gamer with additional features.

Banners
These types of ads are usually placed at the top or bottom of the gaming apps. They don’t interfere with the app which means users can continue using the app without any disturbance. These types of ads however have low click-through rate as the consumers care about the user experience and user interface design more these days.

Generating money from the gaming apps can be done by using different types of models such as cost per acquisition or cost per action (CPA), cost per click (CPC), and cost per install (CPI).
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Freemium Apps

This is one of the most profitable methods of monetizing gaming apps. Sounds weird right? Let’s understand how do gaming apps make money.

Most of the free gaming apps, found on your app store are basically freemium apps. According to the report of Statista, 91.1% of the apps downloadable from the App Store and 96.1% of the apps of the Google play store are free.

These types of apps don’t charge the gamers from the beginning. They can be downloaded from the app store for free and the gamers can access the basic features for free. This gives the gamers a taste of the game, and to access all the premium features, a fee must be paid.

Freemium gaming apps use two methods to monetize their apps. The developers allow the gamers to buy certain features or items of the game through in-app purchases or offer a subscription.

This type of model is mostly followed by the gaming apps that have a surety that the gamers will stick to their app once they have played a demo version of it.
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Microtransactions

Microtransactions are also referred to as in-app purchases. This is also another of the most common methods of monetizing the gaming apps. It accounts for 53% of the revenue of the developer and requires an integrated system of payment. At least 30% commission of the earnings is kept by the App Store in such purchases. This type of method usually offers additional features or enhancements for the gamers to improve their gaming experience. These purchases mainly include the following:

Consumable Virtual Products that are purchased and used only once within the app, such as extra bonuses, points, etc. Most of the gaming apps their virtual currencies such as coins, gold and gems.
The non-consumable products don’t expire and require a one-time purchase only within the gaming app. They might include icons, ad blocks or new game levels.

Licensing

Apart from the above-mentioned methods, the developers of games also have this method of monetizing their apps. They can earn money by merchandising and licensing. The E-commerce business develops mobile applications for selling goods and earning merchandise and licensing. Most of the hit gaming apps are able to merchandise t-shirts, toys, stationaries, phone covers, etc.

This can be understood by taking a simple example of the famous game of the 2010s, “Angry Birds”. Rovio’s Angry Birds was a massive success at the App store and the Play store. Due to its immense popularity, it had the opportunity to license the game to movies, spin-offs and series. It was also able to get more than 200 licensing partners and was able to produce T-shirts, phone cases, and toys.

Points to Keep in mind

Audience

The most important factor while monetizing your gaming apps is to know and understand your target audience.

Some games require sheer focus and thus to keep the gamers interested, it is important to choose a monetizing strategy that doesn’t interfere in their gameplay. However, if its an app focusing on kid’s development, one may opt for development and subscription services for earning money through the app.

Therefore, it’s very important to analyze your target audience before working on your app development plan.

App Purpose

This is another of the important factors you should consider before you decide to monetize your gaming app. Gaming apps have a wide variety and can range from action, role-playing, puzzles, MMO, and digital cards to kid’s developments, and so on.

To earn money from your app, your app must be exceptionally good, if you don’t opt for an advertising method. It should either be one of a kind or provide excellent services in its domain. This will also help you to understand what type of monetization strategy suits the best for your app.

Technology Type

The popularity of your app highly depends on the type of technology used to develop it. The technology of your app enhances the user experience and makes it superior to other apps. This adds to the earnings of the users significantly.

Competitor Analysis

If you are opting for a paid gaming app, a subscription one, or some other similar monetizing strategy, this is the most important thing. Competitor Analysis allows you to understand the type of apps already present in the market and the strategies used by them. This can also allow you to have a brief idea and outline of the monetizing strategy perfect for your gaming app.

How Do Gaming Apps Make Money-Frequently Asked Questions

Are gaming apps profitable?
Yes, gaming apps are profitable. Moreover, they are one of the most profitable type of apps. They use a number of techniques to generate handsome revenues.

How much money can you make from a gaming app?
Money generated from gaming apps depends on various factors. On average gaming apps make around $22,250 daily, but this is an overall average which can vary largely.

How do game apps earn money?
Gaming apps earn money by using a well-developed monetizing strategy. The most common methods used for earning money from the gaming apps include paid subscriptions, premium services, advertisements, freemium apps, microtransactions, and licensing and merchandising.

How much money do free game apps make?
Recent statistics show that, the top 16% of Android developers and 25% of iOS developers make around $5k per month on average from their free apps.

What type of apps make the most money?
Mobile gaming and streaming apps make the most money. Gaming apps are dominant over the mobile app industry in all domains, with the users spending the most on these apps.

How does PUBG earn?
PUBG is one the most popular gaming apps and it’s earning mainly comes from the in-app purchases.

Why do most apps fail?
When developers have poor research and poor execution of the strategy, they fail immediately or after some time of their launch. Therefore, it is very important for the developers to understand, properly research and carefully develop the strategy for their app before developing and launching it.
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How Do Gaming Apps Make Money-Conclusion

The gaming industry has seen a remarkable increase in its market, due to the ever-increasing popularity of smartphones and the internet. Thousands of games are downloaded around the globe on daily basis. But it is very important for the game developers to know how do gaming apps make money.

Advertising methods in gaming apps have proven to be one of the most effective methods in earning money from the apps and generating good revenue. But this requires the developers to develop a unique and engaging app, which must be appealing to its users.

You will find thousands of games on the app or play store which have poor quality and questionable quality. Such games don’t gather much attention and quickly disappear in the stream of apps. Your goal must be to avoid this. A well-developed and strategized app gains popularity and interest of its users and thus results in generating good revenue for the developers.

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