How Do Mobile Games Make Money?

How Do Mobile Games Make Money?

There are millions of free games available for download for Apple and Android phones so you may wonder how do mobile games make money if game play is free.  Mobile games make money in two different ways, in app purchases and through advertising.  Mobile gaming is BIG business and game developers fight tooth and nail for every download they get.  Let’s take a look at this business model and see how game developers make their money.

In App Purchases

In app purchases are where you can buy items to make your game play better.  These can be anything from extra lives, extra levels or special tools for your character to use. Most mobile games only offer a certain amount of lives and when you exhaust them you have to wait before you can start playing again.  The game allows players to buy extra lives or even unlimited lives for a whole day for a small purchase.

Developers walk a fine line between offering enough free game play to get players involved and want them to keep playing enough so that they make a purchase.  Typically the cost for in app purchases are usually pretty low, under $10.  Getting this aspect of the game right is crucial to how mobile games make their money.


Game developers also understand that there will be millions of players that will never make an in app purchase so they still need to find a way to monetize their audience, that’s where advertising comes in.  These ads can range from small display ads at the bottom of the screen to pauses in the game to watch a full 30 second commercial.

Some games will tie advertising into their game as a sort of in app purchase, need extra lives to continue playing then watch this 30 second commercial and you can have them.  The incentive can be extra lives, extra moves, longer play or some other special bonus.  This is called interstitial advertising and it works because it catches players in the middle of a game where their attention is focused.

Other games, particularly the epic fantasy action/adventure games used to have an upfront cost and that was where developers generated a portion of their revenue from.  Most, if not all have moved away from that business model and use some combination of in app purchases or advertising to make money.  There are still some games that will remove the advertising if you subscribe to their “Premium” version of the game.  No matter how they monetize their games you can still count on nothing being “free” in the mobile gaming world.