With increasing internet penetration, Indian online gaming market is seen as an opportunity with a large potential today. Developers across the world are expected to enter the booming Indian online gaming market. Monetization in the past has been a big challenge for developers. Currently, revenue models in the industry include:
In-App advertising : Banner advertisements is based on revenue earned from the ad network depending on Cost per Click(CPC) or Cost per Mille (CPM)
In-Game product or brand placement : Revenue can be earned directly by promoting brands by placing their advertisements / branding directly in the UI / game play environment.
Incentive based advertisement : Allow the player to earn virtual currency, game play requisites or access to the game by watching advertisements.
Purchase / pay per download : Upfront charge for download and access to the game. This is the most straightforward system and works well for niche, in demand games and apps.
Freemium / upgrade model : Free to download and use a limited part /tries of the game. Player is charged for full access and unlocks all features, characters, levels etc. This is probably the most sensible model for new games or get traction with new users.
In-app purchase : Gamers pay to unlock virtual objects or virtual currency. This model works for complex / popular games in which the gamer would need to purchase some virtual objects to progress (faster) in the game.
Subscription model : This could be an monthly or annual subscription for access to a package that could be virtual objects, extended access to the game or a combination of these. This generally works well for device/ platform based access.
Online gaming industry has started to increasingly deriving revenues through ‘Paid by Ecosystem’ and ‘Paid by Online Gamers’.
Most developers are still dependent on the advertisers and publishers for monetization. Today, online gaming industry has started to adapt to the market and is increasingly deriving revenues through ‘In-app advertisement’ and ‘Incentive based advertisement
As the market grows in terms of volume and usage over the next five years, it is expected to move to a ‘Freemium’ model to recognize a better balance of revenue realization from the ‘Ecosystem’ and ‘Online gamer(s)’. ‘Freemium upgrades’ and ‘In-app purchases’ are expected to see an improved growth in future.