Premium for narrative single-player. Free-to-play with IAP for RPGs and strategy. Hybrid (ads plus IAP) for casual mobile. Subscription for live-service. Battle pass for ongoing-content games. That is the short answer. The longer answer, which most monetisation guides avoid, is which model actually fits your specific game type, audience, and content cadence. Most articles you will find on this topic are written by ad networks, IAP SDK vendors, or analytics platforms with a financial interest in pushing one model over another. We are a working Unity studio (RuneScape Mobile at Jagex, Domi Online, Word Fun World, Pocket Factory) with no SDK to sell. Here is how we would think about the choice as engineers who have shipped each of these models commercially.
Monetisation Models at a Glance
Use this table as a starting point, then read the detailed sections for context on each model.
| Model | Best for | Player retention impact | Implementation effort | Watch out for |
|---|---|---|---|---|
| Premium (paid upfront) | Narrative single-player, console, premium PC | Neutral, no monetisation pressure on session length | Low. Storefront listing only. | Discoverability: requires marketing budget or strong IP |
| Free-to-play with IAP | RPGs, strategy, simulation, gacha | Positive when balanced, negative when pay-to-win | High. Virtual economy design, IAP catalogue, server validation. | Whale-dependent revenue, regulatory risk on loot mechanics |
| Hybrid (ads + IAP) | Casual mobile, puzzle, hyper-casual | Positive: rewarded ads improve session retention | Medium. Ad mediation, IAP integration, analytics. | Ad fatigue, GDPR/CCPA consent flows |
| Subscription | Live-service, premium content libraries, kids' apps | Positive when content cadence sustained, negative if not | Medium. Recurring billing, content pipeline, churn analytics. | App store revenue share, churn management, GDPR-K for kids' content |
| Battle pass | Ongoing-content games, multiplayer, live-service | Positive: structured engagement loop | High. Season cadence, reward design, content pipeline. | Burnout if cadence too aggressive, content debt accumulates |
| Ads-only | Hyper-casual, low-DAU experimental titles | Negative if intrusive, neutral if rewarded-only | Low. Single SDK integration. | Low ARPU ceiling, ad mediation complexity at scale |
| Paymium (paid + IAP) | Premium games with optional cosmetics or expansions | Neutral if cosmetic-only, negative if pay-to-win | Medium. Storefront plus IAP integration. | Player perception: paid game with IAP is often resented |
Premium pricing
The player pays once to download the game. No ads, no microtransactions, no recurring fees. The entire experience is included in the purchase price.
How it works
You set a price, typically £2.99 to £9.99 on mobile, £14.99 to £49.99 on PC and console, and the player pays before they can play. Platform holders take a cut: Apple and Google take 30% (15% for developers earning under $1 million annually through their small business programmes), Steam takes 30% (dropping to 25% above $10 million and 20% above $50 million).
Pricing psychology
Price points carry signals. A £0.99 mobile game suggests a throwaway experience. A £4.99 price says the developer believes in the product. On PC, £19.99 has become the sweet spot for high-quality indie titles, while £29.99 to £49.99 suits games with substantial content. Pricing too low can actually hurt conversion by signalling low quality.
Discounting strategy matters as well. Seasonal sales on Steam drive significant volume, but frequent deep discounts train your audience to wait rather than buy at launch. Balancing launch price, sale cadence, and perceived value requires planning.
When premium works
Premium works best when the game offers a complete, self-contained experience that players can evaluate before buying. Strong word of mouth, a recognisable IP, positive reviews, or a demo that sells the full version all help overcome the friction of an upfront price.
Certain genres have audiences that expect and accept paid pricing. Narrative adventures, puzzle games with a clear endpoint, and simulation games are natural fits. Monument Valley (£3.99), Stardew Valley (£4.99 on mobile, £10.99 on PC), Dead Cells (£8.99 on mobile), and Plague Inc. (£0.99) all launched as premium titles and found their audiences because the model matched player expectations.
When premium does not work
Premium is difficult for games that need a large concurrent player base. A paywall reduces your install base dramatically compared to free-to-play, which can be fatal for multiplayer titles that depend on network effects.
On mobile, paid games account for less than 5% of total App Store revenue. The vast majority of players expect mobile games to be free. You need strong marketing, strong reviews, or a strong brand to overcome that expectation.
Revenue expectations
Revenue is front-loaded. Most income arrives in the first weeks after launch, with a long tail driven by discoverability, editorial features, and sale events. A well-reviewed indie game on Steam might sell 10,000 to 50,000 copies in its first year. On mobile, volume is typically lower but profitability can still work if development costs are controlled.
The upside of premium is simplicity and predictability. Revenue per user is known from day one. There are no funnels to optimise, no virtual economies to tune, and no ad networks to manage.
Free-to-play with IAP
The game is free to download. Revenue comes from players purchasing virtual goods, currency, or content within the game. F2P is the dominant model when you want the largest possible audience and are prepared to invest in economy design and live operations.
Core loop design and IAP
The most successful F2P games tie their IAP directly to the core loop. If the core loop creates a desire (progress faster, look better, compete more effectively), the IAP fulfils that desire. Clash of Clans creates a desire to upgrade faster; its IAP sells gems that accelerate building timers. Genshin Impact creates a desire for new characters; its IAP sells the gacha currency to unlock them.
Only 2% to 5% of players typically convert to paying users. The top 10% of those spenders generate 50% to 70% of total IAP revenue. Understanding your spending distribution matters far more than your headline conversion rate.
Types of IAP
Consumables are used up and repurchased: extra lives, energy refills, premium currency, boosters. These drive recurring revenue from the same players.
Cosmetics change appearance without affecting gameplay: skins, emotes, decorations. Cosmetics are widely considered the most ethical form of monetisation because they generate revenue without creating pay-to-win dynamics. Fortnite generates billions almost entirely from cosmetic sales.
Progression items provide gameplay advantages: stronger weapons, experience boosters, skip tickets. These generate higher revenue per buyer but risk alienating the non-paying majority if the balance feels unfair.
Ethical considerations
Player sentiment around IAP has shifted significantly. Loot boxes face regulatory scrutiny in Belgium, the Netherlands, and other markets. Manipulative dark patterns (artificial urgency, friction-then-offer flows, targeting vulnerable players) attract negative press and can trigger app store policy enforcement. The studios generating the most sustainable F2P revenue tend to be those offering genuine value rather than exploiting psychological pressure.
Server-authoritative validation
Any game with real-money IAP needs server-side purchase validation. Without it, receipt manipulation and refund abuse can drain significant revenue. This is especially important for games with tradeable items or competitive elements. Implementing a server-authoritative backend that validates every transaction is a baseline requirement for any serious F2P title. We built this for Domi Online, an MMO supporting 1,000+ concurrent players where every purchase, drop, and trade has to be validated against the server.
Revenue expectations
Average revenue per daily active user (ARPDAU) for a well-optimised mobile F2P game typically falls between £0.05 and £0.30. At 100,000+ daily active users, that compounds into substantial monthly revenue. The catch is user acquisition cost: cost per install varies by genre and geography, but £1 to £5 per install is common for competitive genres. Lifetime value per user must exceed acquisition cost for the model to sustain itself.
Examples
Clash of Clans, Genshin Impact, Fortnite, Candy Crush Saga, Marvel Snap, Pokemon GO, Honkai: Star Rail.
Hybrid monetisation
The hybrid model combines ad revenue with in-app purchases, capturing value from both paying and non-paying segments of the player base. This is currently the dominant monetisation approach on mobile.
How it works
Free players generate revenue through ads, primarily rewarded video. Players who prefer to spend money can purchase IAP to accelerate progress, unlock cosmetics, or remove ads entirely. The two revenue streams are complementary rather than competing.
The design insight that makes hybrid work is that rewarded video ads become a marketing tool for your own economy. When a player watches an ad to earn 50 gems and discovers what those gems can buy, they get a taste of the premium experience. This exposure lifts IAP conversion rates. The ad is not just generating ad revenue; it is demonstrating the value of your virtual currency.
Key takeaway: In a hybrid model, rewarded video ads are not just a revenue stream. They are a conversion funnel that demonstrates the value of your premium currency to free players.
Ad formats
Rewarded video is the gold standard. Players choose to watch a 15 to 30 second video in exchange for an in-game reward (extra life, currency, power-up). eCPMs typically range from £10 to £30 in tier-one markets (US, UK, Germany, Australia), dropping to £2 to £8 in tier-two markets (Brazil, India, Southeast Asia). Player satisfaction is high because the exchange feels voluntary and fair.
Interstitial ads are full-screen ads that appear between levels, after deaths, or at natural break points. eCPMs range from £2 to £10 depending on geography and format (video interstitials pay more than static). Placement and frequency are critical: too many interstitials and retention drops sharply.
Banner ads are small, persistent ads displayed at the screen edge. eCPMs are low (£0.10 to £0.50) but they accumulate over long sessions. Most developers consider banners the weakest format because they generate little revenue while degrading the visual experience.
Offerwalls present players with a list of actions (install another app, complete a survey, sign up for a trial) in exchange for in-game currency. eCPMs can be very high (£20 to £50+) but engagement rates are low and the user experience is interruptive.
Integration best practices
Frequency capping is essential. Showing an interstitial after every level will tank your day-seven retention. A common pattern is one interstitial every two to three minutes of active play, with rewarded video available on demand at natural friction points.
Placement timing matters as much as frequency. Showing an ad immediately after a player fails a level (when frustration is high) creates negative associations. Showing a rewarded video offer before the player attempts a difficult level (as a proactive boost) feels helpful.
Ad mediation platforms manage demand from multiple ad networks and optimise for the highest-paying impression. Using mediation rather than a single network typically increases eCPM by 20% to 40%.
Segmenting paying and non-paying players
Effective hybrid games treat their audience as distinct segments. Non-paying players see more ad placements and receive smaller free currency drips, which makes the rewarded video offer more attractive. Paying players may see fewer or no ads (sometimes via an ad-removal IAP), preserving a clean premium experience.
The balance is delicate. If free players feel that the game is deliberately punishing them to drive purchases, they leave. If paying players feel that ads cheapen the experience they paid for, they stop spending. Analytics, A/B testing, and careful economy tuning are essential to getting hybrid right.
Revenue expectations
Hybrid models typically outperform pure ad-only or pure IAP-only approaches because they capture revenue from a wider slice of the player base. ARPDAU for a well-optimised hybrid game can reach £0.15 to £0.50. Most top-grossing mobile games outside the very highest tier use some form of hybrid monetisation.
Examples
Clash Royale, Coin Master, Archero, most King titles (Candy Crush Saga and similar), Royal Match, many mid-core mobile games. Pocket Factory is an idle/tycoon title we worked on where layered progression and a hybrid revenue model had to coexist without one undercutting the other.
Subscription models
Recurring revenue models have become increasingly important in games, particularly for titles with regular content updates and engaged communities.
In-game subscriptions
Enhancement-based subscriptions offer paying players ongoing benefits: bonus daily currency, exclusive cosmetic items, faster progression, an ad-free experience, or priority access to new content. These work well in live-service games where there is always new content to justify the recurring fee.
Old School RuneScape membership is one of the longest-running examples, with millions of subscribers paying monthly for access to the full game world. On mobile, the Clash of Clans Gold Pass and similar "VIP" systems convert a portion of high-engagement players into steady recurring revenue.
Typical subscription conversion rates on mobile are low (1% to 3% of active players), but subscribers have higher lifetime value than one-time purchasers because revenue recurs automatically. A game with 10,000 subscribers at £4.99 per month generates nearly £50,000 monthly before platform fees.
Platform subscriptions
Apple Arcade and Google Play Pass represent the platform-level subscription model, where players pay a monthly fee for access to a library of games. Developers are paid based on engagement metrics rather than direct purchases. This model removes monetisation friction entirely from the player experience but gives the developer less control over revenue.
Educational and kids' subscriptions
For children's games and educational titles, subscription is often the most appropriate model. Ads attract regulatory scrutiny under COPPA (US) and GDPR-K (EU/UK), and IAP in kids' apps faces additional restrictions including parental gate requirements. A monthly or annual subscription paid by the adult resolves both concerns and aligns with the educational publisher's licensing model. Word Fun World operates in this space.
When subscriptions do not work
Subscriptions face high churn on mobile. Players are accustomed to paying once or not at all, and committing to recurring payments is a higher bar. If you cannot deliver enough new value each period to justify the fee, players cancel. Games with slow update cycles or limited content pipelines are better served by premium or one-time IAP models.
Battle passes
The battle pass model, popularised by Fortnite in 2018, combines time-limited content progression with a paid upgrade tier. Every player progresses through a free track of rewards by playing. Paying players unlock a premium track with better rewards.
Why battle passes work
Battle passes serve multiple goals simultaneously: they drive daily engagement (players return to complete challenges), they create a predictable content cadence (seasonal resets), and they generate recurring revenue (players buy the pass each season). The free tier acts as a permanent advertisement for the premium tier.
Effective battle pass design requires a content team that can deliver fresh rewards each season. If the rewards feel repetitive or low-value, pass purchase rates decline. The most successful implementations (Fortnite, Apex Legends, Call of Duty: Warzone) tie their best cosmetic content to the pass, creating a strong incentive to buy.
Where battle passes fail
The two most common battle pass failures are cadence and content debt. Aggressive cadence (a new pass every month) burns out both the playerbase and your content team. Content debt accumulates when each season has to top the previous one to feel worthwhile, and the cost of producing seasons compounds while pass purchase revenue stays flat.
Solo and small-team developers should be honest about whether they can sustain a battle pass cadence for years. If the answer is no, a one-off premium release or a smaller IAP catalogue is more sustainable.
Ads-only and paymium
Two models worth covering briefly because they fit specific cases.
Ads-only
Suitable for hyper-casual games and low-DAU experimental titles where session length is short, install volume is high, and integrating an IAP catalogue would cost more than it returns. Hyper-casual games typically earn £0.02 to £0.10 per user per day. Crossy Road, one of the first major rewarded video success stories, reportedly generated over $10 million in its first 90 days, almost entirely from opt-in ads.
The ceiling on ARPU is low. Without IAP, you have no whales, and revenue scales linearly with install volume. For studios building one hyper-casual title after another, this is the model. For most other games, hybrid will outperform.
Paymium
Paid upfront plus optional IAP. The best implementations restrict IAP to cosmetics or content expansions and avoid pay-to-win mechanics. The worst version (paid game with aggressive consumable IAP) is often resented by players who feel they paid twice for the same experience.
Paymium can work for premium PC titles where the base game is the main purchase and IAP is genuine optional content (Cities: Skylines, The Sims). It rarely works on mobile, where players who paid upfront expect a complete experience.
How to choose
The right monetisation strategy depends on several interconnected factors, and the decision should be made early in development rather than after the game is built.
Decision framework
Genre sets the baseline. Hyper-casual games are almost always ad-funded. RPGs and strategy games lend themselves to IAP. Narrative games work well as premium. Competitive multiplayer titles increasingly rely on battle passes and cosmetic sales.
Platform shapes expectations. Mobile players expect free games with optional spending. PC and console players are more comfortable paying upfront. A game targeting both mobile and PC may need different monetisation approaches for each platform.
Audience influences spending behaviour. Younger audiences are more accustomed to F2P. Older audiences are more willing to pay upfront. Geographic markets vary significantly: Japan and South Korea have higher IAP spending per user than most Western markets.
Development capacity determines sustainability. Subscription and battle pass models require ongoing content production. If your team cannot update the game regularly, a premium or one-time IAP model is more realistic.
Key takeaway: Monetisation is a design decision, not a business afterthought. The model you choose shapes your core loop, your economy, and your content pipeline requirements. Decide early.
Budget constrains options. F2P with IAP and hybrid models require investment in analytics, economy design, live operations, and ad mediation integration. Premium requires only the game itself. Our cost calculator gives you a structured budget breakdown for either path.
Mobile-specific considerations
Apple takes a 30% cut of all App Store transactions, reduced to 15% for developers earning under $1 million annually through the App Store Small Business Programme. Google Play has the same structure. These fees apply to IAP and subscriptions but not to ad revenue, which is why ad-heavy models can be more capital-efficient on mobile.
Emerging markets (India, Brazil, Indonesia, parts of Africa) represent massive player populations with lower average spending. Successful mobile games use regional pricing tiers: lower IAP price points in lower-income markets to maximise conversion, while maintaining higher prices in tier-one markets. Google Play supports sub-dollar pricing in many markets, which can dramatically improve conversion rates.
Ad mediation platforms require integrating multiple SDKs, each of which adds to your app's binary size, memory footprint, and startup time. On lower-end Android devices, poorly managed ad SDK integration can cause frame drops, increased battery drain, and longer load times. Mobile performance optimisation should account for ad SDK overhead from the start of development, not as an afterthought.
Interactive walkthrough
Our game monetisation strategy tool walks through these factors in a structured way and gives you a weighted recommendation based on your specific project requirements. If you need specialist help with economy design, IAP integration, or ad mediation setup, our monetisation services cover the full scope from strategy through to implementation.
Frequently asked questions
How do you monetise a game?
Match the model to the game type. Premium for narrative single-player. Free-to-play with IAP for RPGs and strategy. Hybrid (ads plus IAP) for casual mobile. Subscription for live-service. Battle pass for ongoing-content games. The wrong model can kill an otherwise good game, so the choice matters more than the implementation.
What is the best monetisation model for mobile games?
There is no single best model. Casual mobile games tend to perform best with hybrid (ads plus IAP), where non-spenders watch ads and engaged players buy ad removal or premium items. Deeper genres like RPGs and strategy see the highest revenue from free-to-play with IAP. Premium pricing on mobile is viable but requires strong IP or marketing.
How much money does a mobile game make?
It varies by orders of magnitude. Median revenue for a Steam indie game is roughly $4,000 lifetime. Top mobile titles generate hundreds of millions per year. The realistic middle is a polished mobile game earning $10,000 to $100,000 in its first year, with the bulk of revenue concentrated in the top 10 percent of players for free-to-play titles.
Is it better to monetise with ads or in-app purchases?
Ads convert a higher percentage of players but at low ARPU. IAP converts a smaller percentage at much higher ARPU. For most casual mobile games, hybrid (both) outperforms either alone, because each model captures a different player type. For deeper genres with engaged players, IAP-led F2P is usually the higher-revenue path.
How do free games make money?
Free-to-play games make money through some combination of in-app purchases (consumables, cosmetics, progression unlocks), advertising (banner, interstitial, rewarded video), subscriptions (monthly content access), and battle passes (seasonal progression). The dominant model in the mobile market is free-to-play with IAP plus rewarded ads.
How do I monetise an Android game?
The mechanics are the same as iOS but the player base typically has lower ARPU and higher tolerance for ads. Most Android-first games lean on hybrid monetisation (rewarded ads plus IAP) and ad mediation platforms to maximise ad fill rates. Google Play takes a 15 to 30 percent cut on IAP, the same as the App Store.
What is hybrid monetisation?
Hybrid monetisation combines advertising and in-app purchases in the same game. Non-spending players generate ad revenue, while engaged players buy ad removal, premium currency, or cosmetic items. It is the dominant model for casual mobile because it monetises the entire player base rather than only the small percentage who spend money.
Can I monetise a game without ads?
Yes. Premium pricing, IAP-only free-to-play, subscription, and battle pass are all ad-free models. Ad-free is often the right call for kids' games (regulatory risk under COPPA and GDPR-K), premium narrative games (ads break immersion), and educational or institutional titles where ads are inappropriate.
How do indie games make money?
On Steam and PC, premium pricing with optional DLC or expansions is the dominant indie model. On mobile, indie games typically use free-to-play with IAP plus rewarded ads. The honest reality is that the median indie game makes very little money: revenue is concentrated in a small number of breakout titles. Marketing, community, and audience-building are usually more decisive than monetisation model choice.
Summary
Game monetisation is a design decision, not a business afterthought. The model you choose shapes how players experience your game, how long they play, and how they feel about spending money. Define your monetisation approach before production begins. Test your assumptions with real player data as early as possible. Be prepared to iterate on your economy based on what the data tells you, not what you assumed.
The studios that sustain revenue over years are the ones that treat monetisation as a service to the player, offering genuine value in exchange for money or attention, rather than as an extraction mechanism.
Written by the team at Ocean View Games, a London-based Unity development studio. Director David Edgecombe is a Unity Certified Expert and former Mobile Team on RuneScape Mobile at Jagex (2017 to 2019), with 12 years in game development. If you need help defining or implementing a monetisation strategy, get in touch.
