In-game purchases: the indie dev’s best revenue friend
October 11, 2021
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).
We also recommend that you discover how a player-centered design philosophy for monetization can strongly benefit any F2P game, by grabbing a free copy of our in-depth ebook, Game Commerce Essentials: Why You Should Add an In-Game Store to Your Published or Upcoming Video Game.
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.
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).
We also recommend that you discover how a player-centered design philosophy for monetization can strongly benefit any F2P game, by grabbing a free copy of our in-depth ebook, Game Commerce Essentials: Why You Should Add an In-Game Store to Your Published or Upcoming Video Game.
- Advertising-based monetization, such as using in-game ads, or a one-time payment from the player to remove all ads
- Keeps the game free for new and existing players
- Motivates players to make initial purchase to remove ads forever
- 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)
- Same as above, plus players perform only the tasks they need for the content they want
- 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
- Players pay for what they want, giving them a high level of control
- 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
- 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
- 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
- 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
- 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
- Real-world brand recognition
- Player pride and investment in the brand and the game
- 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
- 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
- Increased development resources needed
- Players’ future expectations increased
- 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
- Game Commerce Essentials: Why You Should Add an In-Game Store to Your Published or Upcoming Video Game
- Game Commerce Essentials: How to Make a Successful In-Game Store
Popular
GET THE LATEST CONTENT DELIVERED TO YOUR INBOX
Featured content
3 minute read
Community Growth
Xsolla expands leadership in game development and innovation in APAC with strategic partnerships in Busan
Xsolla partners with Busan City and BDAN to establish APAC headquarters, empower local talent, and drive Web3 advancements6 minute read
Payments
Direct carrier billing drives digital payments in Japan
Discover Japan's various direct carrier billing payment methods as the country pivots to a cashless future.4 minute read
Game Sales and Commerce
Xsolla Launcher 2024 in review: Transformative results
Dive into what Xsolla Launcher can do for your business and take a sneak peek at how our solution performed in 2024.DIGITAL GUIDE
Free guide
BOOST PLAYER ENGAGEMENT WITH REWARDS
Learn how you can grow your community with rewards during all stages of your game development. Download our free guide.
READY TO LEVEL UP?
The Xsolla team is ready to help.Your game business is our #1 priority.
