Decoding The Revenue Models In Indian Mobile Gaming Market

When the world came to a standstill due to the outbreak of Covid-19, the mobile gaming industry witnessed a massive momentum as people stayed at home and spent more time on mobile games for entertainment.

The behavioural shift – television took a back seat as the family entertainer and ‘me-time’ in personal entertainment was up – was amply reflected in the data captured and may well forecast the future of gaming, at least in the short term. According to the mobile app market intelligence firm Sensor Tower, India has topped the global market in terms of game downloads during the first nine months of CY2020, followed by the US and Brazil. As per data, India had close to 1.8 Bn game downloads in Q1 (Jan-March 2020) of the current year, which increased by 50% to 2.7 Bn in Q2 (April-June 2020) due to Covid-induced lockdown imposed from late March.

Consumer spending on mobile games continued to rise even in Q3 2020, and this has become a global trend. The third quarter has seen a significant rise, growing 27% year on year to reach $20.9 Bn in worldwide spending on the Apple App Store and Google Play. More than half of this revenue came from the App Store, though, as it generated $12.4 Bn from in-game spending.

Globally, India has ranked No. 1 in mobile game downloads during the first three quarters of CY2020. People from India have installed 7.3 Bn games, nearly 17% of worldwide downloads.

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How Mobile Games Make Money

Free Mobile Games

In-App Purchase: These are initially free to download but require payment for various upgrades provided within the game.

Freemium:  Users can download and play these games for free, but later on,  they have to pay to unlock more levels.

Shareware: This model allows users to try a free trial or demo version of the game, but requires them to make a payment to unlock the full game.The purpose is to provide limited gameplay so that users can be enticed to purchase the full version.

Advertising: In this model, users are not charged, but the game contains advertisements for revenue generation.

• Display ads: Static ads, dynamic display ads, banner ads, video ads, pop-up ads and the likes are placed for revenue.
• Interstitial ads: These are commonly displayed between levels, leveraging a natural break in the gameplay, and, therefore, are less intrusive.
• Incentivised ads: These ads come with in-game incentives, in the form of a play currency or a boost, if users view an ad or interact with it.
• Contextual ads: These are integrated to sell the goods in context with the game.

Paid Mobile Games

Up-front payment model: This applies to games which are purchased by making a one-time payment then downloaded directly onto a mobile device. A few popular examples include Minecraft, Bike Mayhem Mountain Racing and Grand Theft Auto: Vice City.

Subscription model: These games charge a recurring fee, usually on a monthly basis, if users want to continue playing. The subscription model is not very common in mobile gaming. It is more frequently used for massively multiplayer online games (MMOs) and other video games which require continuous server hosting and administrative overview for smooth operations.

Different mobile games follow different revenue models, depending on their positioning and target audience. Many gaming companies also combine two or more revenue models to widen their earning opportunities.

To know more about leading mobile gaming companies and the revenue models they follow, read the latest release from Inc42 Plus — Mobile Gaming In India: Market Opportunity Report, 2020

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