## International Journal for Multidisciplinary Research (IJFMR)

[E-ISSN: 2582-2160  ●  Website: www.ijfmr.com](https://www.ijfmr.com/) -   Email: editor@ijfmr.com

# Monetization Models in The Gaming Industry: A
 Comparative Analysis of In-Game Purchases,
 Subscriptions, And Free-To-Play Strategies

## Kumar Divya

Research Scholar, University Department of Commerce and Business Administration, Tilkamanjhi

Bhagalpur University, Bhagalpur, Bihar, India.

**Abstract**
This publication devotes its attention to the commercial aspects of the gaming business, with a particular
emphasis on investigating the various monetization techniques that are utilised by game developers and
publishers. A complete examination of in-game purchases, subscription-based services, and free-to-play
tactics is the goal of this research. The analysis will compare the economic viability of these techniques,
as well as their impact on player engagement and their potential to be sustained over the long run. The
purpose of this study is to provide those working in the gaming business with insights into the changing
landscape of gaming commerce. These insights will aid industry professionals in making educated
decisions regarding the creation of revenue and the pleasure of players. The gaming industry has witnessed
unprecedented growth in recent years, and as it continues to expand, the focus on commercial strategies
becomes increasingly critical for developers and publishers. This journal aims to delve into the intricate
world of gaming commerce, specifically scrutinizing the diverse monetization models prevalent in the
industry. By thoroughly examining in-game purchases, subscription-based services, and free-to-play
strategies, this research seeks to unravel the economic intricacies, assess their impact on player
engagement, and evaluate their long-term sustainability.

**Keywords: Gaming, Monetization, Subscription, Free-to-Play, video games, Business models.**

**INTRODUCTION**
In recent years, the gaming business has seen a fundamental transition on account of the advent of a variety
of different monetization models. Previously, the gaming industry was dominated by traditional one-time
transactions. Because of the expansion of digital landscapes and the ongoing evolution of player
expectations, game developers and publishers have embraced novel strategies in order to generate cash
while simultaneously sustaining player engagement. This shift in focus from a one-size-fits-all approach
to a more nuanced understanding of player preferences has resulted in the emergence of a spectrum of
different strategies for monetization. The purpose of this publication is to investigate the economic
strategies that form the basis of the contemporary gaming environment in order to unravel the complicated
tapestry that exists between these models. Over the course of its history, the gaming industry has
traditionally generated the majority of its revenue through the selling of physical copies or digital
downloads. However, as a result of the proliferation of mobile gaming and the introduction of online
connectivity, developers started experimenting with different methods of monetization. This evolution


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## International Journal for Multidisciplinary Research (IJFMR)

[E-ISSN: 2582-2160  ●  Website: www.ijfmr.com](https://www.ijfmr.com/) -   Email: editor@ijfmr.com

signified a shift from the old model of purchase and play, which resulted in the emergence of a multitude
of tactics that were aimed at improving player experiences while also guaranteeing that creators could
maintain their financial sustainability. The modern gaming scene is characterized by a wide range of
different monetization methods, each of which comes with its own distinct set of benefits, difficulties, and
player dynamics. Just a few instances of the numerous techniques that developers use to find a balance
between player enjoyment and profitability include in-game purchases, subscription-based services, and
free-to-play strategies. These are just a few examples. It is necessary for stakeholders to have a thorough
understanding of the complexities of these models in order to successfully navigate the complex landscape
of gaming commerce. The investigation of different models of monetization is not only an intellectual
exercise; rather, it is a practical necessity in a sector where innovation and adaptation are of the utmost
importance. In the gaming industry, game developers and publishers are always confronted with the
difficulty of matching their income strategies with the expectations of players and the changes in the
market. As a result, it is absolutely necessary to conduct a thorough research into these various forms of
monetization. This analysis will provide insights that can be used to guide strategic decision-making and
contribute to the gaming industry's continued expansion in a sustainable manner. The objective of this
publication is to offer a comprehensive and up-to-date examination of the numerous monetization models
that are being utilised in the gaming business. The purpose of this research is to provide a comprehensive
knowledge of the economic forces that are driving the gaming ecosystem. This will be accomplished by
analyzing the economic viability, player effect, and long-term sustainability of in-game purchases,
subscription-based services, and free-to-play techniques. We hope that by conducting this investigation,
we will be able to equip industry professionals, developers, and stakeholders with the knowledge
necessary to traverse the complex landscape of gaming commerce. This will allow us to cultivate an
atmosphere in which financial success is in harmony with player satisfaction and industry innovation.

**THE DIGITAL GAMING INDUSTRY**
The history of digital gaming has been a process that has been both swift and dynamic. This evolution has
been driven by changes in consumer preferences, advancements in technology, and the creation of new
business models. Some significant turning points in the development of digital gaming include the
following:
The beginning of history: In recent years, the progress of digital gaming has been a process that is both
rapid and ongoing. The 1950s saw the introduction of the first digital games, which coincided with the
development of the first computers and video game consoles. These early games were straightforward,
frequently showcasing graphics and gameplay that were fundamental. It was during the 1950s and 1960s
that the first digital games were developed. The earliest examples of these games were straightforward
text-based simulations and games that were played on mainframe computers. According to Kent (2001),
the primary functions of these early games were research and instructive in nature. In spite of this, they
were crucial in laying the groundwork for the creation of more sophisticated video games in the decades
to come.
The decade of the 1970s and the decade of the 1980s witnessed the introduction of arcade games such as
Pong and Space Invaders. These games were played on dedicated machines that were located in arcades
and other public areas. In comparison to the early digital games, these games were more advanced and
had graphics and gameplay that were more complicated or intricate. These games were the first to establish
the concept of coin-operated gaming, and they were played in arcade centers that were specifically


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## International Journal for Multidisciplinary Research (IJFMR)

[E-ISSN: 2582-2160  ●  Website: www.ijfmr.com](https://www.ijfmr.com/) -   Email: editor@ijfmr.com

designed for that purpose (Kent, 2001). Home video game consoles, such as the Atari 2600, were
developed as a result of the popularity of arcade games. These systems enabled players to enjoy games
that were similar to those played in arcades without having to leave the comfort of their own homes.
The decade of the 1980s witnessed the introduction of home consoles, which included the Atari 2600 and
the Nintendo Entertainment System. These systems made it possible for players to engage in gaming
activities within the confines of their own homes. Consequently, this event marked the beginning of the
market for console gaming (Kent, 2001).
The 1990s were a pivotal decade for the development of personal computer gaming, which coincided with
the surge in popularity of personal computers and the introduction of 3D graphics technology.
Consequently, this resulted in the creation of games that were more complex and immersive, such as firstperson shooters and real-time strategy games (Kent, 2001). The 1990s were a pivotal decade in the
development of digital gaming, marking a crucial turning point. Graphics that were more realistic and
gameplay that was more immersive were made possible by the introduction of the first systems that were
capable of 3D, such as the Sony PlayStation and the Nintendo 64. In addition, the proliferation of the
internet and the development of online multiplayer gaming made it possible for players to communicate
with one another and engage in competitive gaming in real time.
Mobile gaming: The decade of the 2000s witnessed the introduction of mobile gaming, which coincided
with the increasing use of smartphones and the development of mobile gaming platforms like as the App
Store and Google Play. According to DFC Intelligence (2016), this resulted in the growth of mobile games,
which included games that could be played easily and games that could be played while on the move.
Virtual Reality and Augmented Reality: With the advent of virtual reality and augmented reality
technology, it is now possible to immerse gamers in digital worlds in a manner that is more closely like
the actual world. According to Liu, Chen, Liu, and Chen's 2020 research, this technology is currently being
utilised not only in the gaming industry but also in other sectors, including tourism, healthcare, and
education.
The proliferation of mobile gaming can be attributed to the emergence of mobile devices such as
smartphones and other mobile devices. In comparison to games played on consoles and personal
computers, these games are typically less complicated and more informal in nature. They are designed to
be played on smaller screens. On the other hand, they have gained an enormous amount of popularity,
with several mobile games generating hundreds of millions of dollars in revenue by themselves. A number
of new technologies, such as cloud gaming, the introduction of e-sports, and the increasing popularity of
live streaming sites like Twitch and YouTube have all contributed to the continuous development of the
gaming industry during the past several years. The gaming industry is expected to expand even more in
the future as a result of the ongoing changes brought about by technological improvements. This expansion
will bring about new and exciting prospects for both players and developers.

**WHAT IS GAME MONETIZATION?**
When we speak of "game monetization," we are referring to the myriad of diverse ways in which game
producers might generate income from their creations. When it comes to monetizing video games, the
most conventional method is through actual game purchases. In this method, gamers simply pay a certain
amount to download and play a game. You may remember the early days of gaming when you either
walked to the store and purchased a copy or you inserted a quarter into the slot machine at the arcade.
Some of you may remember this scenario. At this point in time, there are a great many more avenues for


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## International Journal for Multidisciplinary Research (IJFMR)

[E-ISSN: 2582-2160  ●  Website: www.ijfmr.com](https://www.ijfmr.com/) -   Email: editor@ijfmr.com

game developers to generate income. Among the many powerful opportunities for monetization, in-app
purchases, rewarded video advertisements, regular display advertisements, and game sponsorships are all
examples. As a result of the numerous benefits that it provides to game creators, advertisers, and players
alike, in-game advertising has become one of the most widely used strategies for monetizing video games.
It is possible for game publishers to create revenue from their games without having to charge players any
money. This means that there are less obstacles to overcome in order to attract audiences into the
ecosystem of your game. Additionally, it is possible for marketers to be certain that their advertisements
are reaching the appropriate audience because in-game advertisements are targeted at particular
demographics. From the perspective of the players, in-game advertising does not disrupt their gaming
experience and may even provide a number of advantages, such as the provision of free content within the
game settings.

**UNDERSTANDING THE DIFFERENT MODELS OF GAME MONETIZATION**
When it comes to the gaming industry of today, monetization is an extremely important factor in
determining the success and profitability of game creation. The creators have a variety of alternatives
available to them in order to earn revenue, including free-to-play games that include in-app purchases,
subscription-based business models, and classic pay-to-play entertainment. It is crucial for both gamers
and game creators to have a solid understanding of the various forms of monetization that are available
for games. Within the scope of this post, we will investigate and throw light on the various models, their
mechanics, and the impact that they have on the overall gaming experience.

**In-Game Purchases: Over the past few years, the in-game purchase model has seen a tremendous surge**
in popularity. According to this model, game producers make it possible for users to download and play
their game without charge, but they charge for additional game content or features. One-time payments,
such as new character skins or level packs, or recurring subscriptions that unlock premium features or
allow access to exclusive material are examples of the kind of purchases that fall under this category. It is
possible for publishers to gain income from a wider variety of players through the use of the in-game
purchase model. This includes players who might not be ready to pay for a game in advance. Another
benefit is that it enables developers to provide a wider variety of content and experiences, which in turn
provides gamers with additional reasons to continue coming back. There are a few tried-and-true choices
available to you in terms of the kinds of purchases that you can make available to players.

-  **Consumables: Consumables are items that may be purchased within the game and gradually depleted**

as the player progresses through the game. It is possible for them to consist of additional lives,
ammunition for an in-game weapon, or food that the character consumes in order to restore their health.
The inclusion of consumables as an in-game purchase is advantageous to developers since, after they
are depleted, players are prompted to purchase additional consumption items. This means that each
player will continue to receive income.

-  **Exclusives: Exclusives are purchases that players can only receive from within the game, in contrast**

to consumable rewards, which provide players with additional items that they already have access to
within the game. It is possible that they will include a unique level, a unique item for their character,
or some form of enhancement to the overall game experience when they purchase them.

-  **Cosmetics: These days, one of the most widely used methods of game monetization is cosmetic**

improvements. Games that have been hugely popular in the past ten years have made almost all of


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## International Journal for Multidisciplinary Research (IJFMR)

[E-ISSN: 2582-2160  ●  Website: www.ijfmr.com](https://www.ijfmr.com/) -   Email: editor@ijfmr.com

their money from users buying skins, hats, costumes and other digital 'face-lifts'. Additionally,
cosmetic changes present an opportunity for sponsored brand integrations.

_Source: https://kevurugames.com_

**In-Game Advertising:** Brands show advertisements to players in-game. This is known as in-game
advertising. Given that players are frequently quite involved with the game's content, in-game advertising
can be a useful tool for reaching them. Additionally, gaming surroundings offer marketers a special chance
to match their merchandise with a gaming-related lifestyle.

-  **Banner Ads:** Since the early days of the internet, banner adverts have existed. These are

straightforward, static advertisements that feature details and visuals about a company and/or its
offerings. To avoid interfering with gameplay, banner advertisements should be positioned
strategically throughout the game, such as on the main menu screen or during game pauses. In addition,
game publishers can employ banner advertising to monetize their subscription-based services by
providing gamers who view the advertisement with a discount. When banner ads are positioned in
high-traffic parts of the game, this strategy performs admirably.

-  **Interstitial Ads: Full-screen advertisements known as interstitials are displayed to consumers during**

game interruptions, such as in between stages. They can be a useful means of bringing in money
without significantly degrading user experience if implemented correctly. An interstitial ad model
could be a straightforward static ad that the user has to close in order to resume gameplay, or it could
be a video ad that they can choose to watch or ignore.

-  **Rewarded Video Ads: The player is offered the choice to watch an advertisement in rewarded video**

ads in exchange for an in-game reward. Rewards can range from little things like an additional life or
a power-up to bigger things like getting to unlock a new character or level. No matter how much is
awarded, the player is always free to decide whether or not to watch the advertisement; there are no
repercussions for doing so.

-  **Integrated Ads: Advertiser messages become an integral element of the gameplay when integrated**

advertising are used; they no longer only show up in the game's menus or transition areas. Consider a
racing game where the cars are branded with real automobile names, or a cookery game where the ingame packaging is branded with brand names. In addition to being inconspicuous, these integrated


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## International Journal for Multidisciplinary Research (IJFMR)

[E-ISSN: 2582-2160  ●  Website: www.ijfmr.com](https://www.ijfmr.com/) -   Email: editor@ijfmr.com

advertisements can improve the "reality" of a player's gaming experience. You, your advertisers, and
your users all benefit from it.

**Premium Paid Model: The premium paid model of game monetization, in which users pay a one-time**
charge to access the entire game, is the most "vintage" approach. Publishers have found success with this
concept since it enables them to earn from their games and recover their investment.
Sadly, there are a couple significant drawbacks to the premium priced approach. One of the main issues is
that getting players to pay for a game in full might be challenging. In addition, paid premium games
frequently have shorter lifespans than free-to-play ones since, in the case that no new content is added,
player interest will eventually wane.

**Subscription Model: The success of massively multiplayer online role-playing games has contributed to**
the rise in popularity of the subscription game monetization model in recent years. Both game developers
and gamers can benefit from this concept in a number of ways. It offers game publishers a more consistent
flow of income that they may put towards long-term investments in game development and expansion. It
provides a more comprehensive gaming experience for users with frequent upgrades and the availability
of new content.
Nevertheless, if gamers must pay a monthly subscription, they might be less inclined to check out new
games, and cancellations could affect the consistency of revenue.

_[Source: https://kevurugames.com](https://kevurugames.com/)_

**Sponsorships: Every year, the sponsorship model in gaming gains popularity. Although it takes many**
different forms, the general idea is always the same: a company pays a game creator to include their brand
in their creation. This might be as easy as having the brand placed prominently in the menus and transition
areas of the game. It might even be as intricate as a whole branded experience integrated into the actual
game world.
Big free-to-play games have built whole events around branded experiences, with celebrities and
multinational organisations performing in-game as their avatars.


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## International Journal for Multidisciplinary Research (IJFMR)

[E-ISSN: 2582-2160  ●  Website: www.ijfmr.com](https://www.ijfmr.com/) -   Email: editor@ijfmr.com

**Hybrid Models: Multiple monetization strategies are combined in hybrid models to diversify revenue**
streams. A game might, for instance, have an in-app purchase system and be free to play, but it might also
have a premium edition that can be purchased once to get rid of advertisements or unlock more features.
Hybrid models offer flexibility in order to optimize revenue possibilities while accommodating varying
player preferences.

**HOW TO MONETIZE GAMES OF ALL TYPES**
Let's talk specifically about how each distinct platform monetizes games. There are three primary platform
possibilities for gaming: desktop, mobile, and web-based applications. Though there are some significant
differences to take into account, all three share many of the same guiding concepts.

**Web-Based Games: Firstly, there are numerous ways to monetise online games through advertising.**
Selling advertising space within the game is the most popular strategy. This can be achieved by embedding
advertisements within the gameplay or by displaying banners and/or video adverts on game screens. For
instance, certain games show advertisements when a player stops or finishes a level. Since web browsers
are used to play web games, banner or muted video adverts can be positioned outside the game window
of the browser without interfering with the player's experience. Web-based games can also be made
profitable by including branded virtual items or power-ups that can be bought with real money. These
things can be utilised to advertise a specific brand or product and frequently give players a competitive
edge over other gamers.

**Mobile App Games: The revenue model for mobile app games is continually changing. Game publishers**
are always searching for new methods to make money as the mobile gaming business gets more
competitive. There are several more ways to increase game revenue in addition to in-app purchases, which
have become the norm for mobile game monetization.
Using rewarded video advertising to monetize games gives players the control. Developers might find that
unsettling. However, because of the positive brand perception that users have now developed—especially
if the advertisement is helping them progress through a level or solve a puzzle—you can ensure happy
advertisers by testing the balance between what you're asking of players and the reward they receive in
return. This will result in happy users and a happy bottom line for your game.

**Desktop Application Games: In terms of game monetization, desktop apps have always been the "final**
frontier." Within the game industry, desktop applications are thought to be the most difficult to monetize
through advertisements. Several causes for this include:

-  The majority of demand partners employ approval procedures that inherently reject chances for

desktop advertising.

-  Desktop applications are not able to use user-tracking techniques like cookies and domain names.

-  Even demand partners who are willing to use non-web-based solutions have concerns about fraud

monitoring.

Considering that Google Adsense isn't even compatible with desktop games, self-publishing your game
using DIY means is really challenging. After you get beyond that obstacle, there are other ways to make
money with desktop games that are similar to those from web or mobile games. The possibilities for
immersive in-game advertising, rewarded video, and interstitial adverts are endless.


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## International Journal for Multidisciplinary Research (IJFMR)

[E-ISSN: 2582-2160  ●  Website: www.ijfmr.com](https://www.ijfmr.com/) -   Email: editor@ijfmr.com

**CONCLUSION**
Within the ever-changing landscape of the gaming business, achieving successful game monetization
requires striking a delicate balance between the generation of income and the provision of users with
entertaining experiences. Various tactics have been investigated by gaming studios in India and abroad.
These strategies include the free-to-play model with in-app purchases, advertisement-based monetization,
subscription models, pay-to-play alternatives, in-game events, and merchandising. The various methods
of monetization each have their own advantages and are suited to a variety of audiences and types of
content.
Additionally, it is necessary for gaming studios to continue to be flexible and innovative in their approach
to monetization in order to keep up with the ongoing evolution of the gaming industry. Gaming studios in
India and around the world are able to negotiate the complex environment of game monetization and
develop viable companies while simultaneously offering players with unforgettable gaming experiences.
This is accomplished by understanding their target demographic, welcoming feedback from players, and
producing experiences that are engaging.

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## International Journal for Multidisciplinary Research (IJFMR)

[E-ISSN: 2582-2160  ●  Website: www.ijfmr.com](https://www.ijfmr.com/) -   Email: editor@ijfmr.com

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