The global video game industry has evolved into a financial powerhouse, generating $184.3 billion in revenue according to Newzoo's Global Games Market Value Report. What was once a straightforward business model of selling cartridges and discs has transformed into a sophisticated ecosystem of monetization strategies that keep players engaged (and paying) long after their initial purchase.
This revenue diversification reflects broader shifts in consumer behavior and technology adoption. Publishers have moved beyond the traditional one-time purchase model to embrace recurring revenue streams that can generate income for years from a single game. The result is an industry that has proven remarkably resilient, even during economic uncertainty.
Premium Sales
The traditional way to generate revenue from games is to put an upfront price tag on them. Digital and physical copies of games are typically priced at $60 for premium titles from popular studios. Indie games are generally priced lower, at $40 or less. Games may have additional downloadable content (DLCs) and other bonuses that drive up their cost.
The pricing model has remained consistent for years, but video game companies like Microsoft and Nintendo are considering raising prices amidst global inflation. Prices can vary drastically if publishers choose to implement regional pricing. In some cases, publishers reduce prices for countries based on their economic conditions. Some examples of premium titles include Grand Theft Auto V, EA FC 25, Cyberpunk 2077, God of War: Ragnarok, and DOOM: The Dark Ages.
Microtransactions
Most free-to-play games use microtransactions to support development. Nearly 85% of mobile revenue comes from free-to-play games that use in-app purchases and ads, according to a 2024 report by Udonis. A Comscore report revealed that 82% of gamers engaged with microtransactions in 2023, which highlights how popular the monetization model is.
Several triple-A (AAA) publishers like Activision, EA, and Ubisoft have found success with free-to-play games with microtransactions. Games like Call of Duty: Warzone, Apex Legends, and Rainbow Six Siege have generated billions of dollars in revenue since their release, according to official financial reports. EA has notably found success implementing microtransactions even in its premium gaming franchises like EA FC, EA Sports College Football, and Madden.
Battle Passes and Monthly Passes
Battle passes and subscriptions give players ongoing access to in-game rewards or games. The battle pass system is very popular and is seen in both free and premium games. Titles like Valorant, Fortnite, Marvel Rivals, and Overwatch offer battle passes that give players access to earnable rewards. Players have to complete missions in-game to unlock these rewards, which helps boost player engagement.
Some games like Marvel SNAP, Genshin Impact, and Honkai: Star Rail offer premium currency every day for logging in through monthly passes. These passes typically do not have any items associated with them, but they help boost player progression. They are typically priced at $5 and last a month. Just like battle passes, they require players to log in regularly for rewards. Roblox also has a premium monthly pass, but players get all of the currency on their subscription renewal date. Several Roblox games like Survive the Disasters 2, Fisch, and Brookhaven offer premium “gamepasses” with in-game perks and VIP memberships.
Advertising
Advertising is one of the oldest monetization models for free mobile games. Many games give players bonuses for watching ads or have ads at the bottom of the screen. It helps publishers offer a free-to-play gaming experience while also generating revenue. Some games offer ad-free upgrades that players can purchase to permanently remove ads from the game.
The in-game advertising market is expected to grow from $8.65 billion in 2024 to $19.64 billion in 2033. Some of the most popular games with in-game ads include Ludo King, Candy Crush Saga, and Free Fire. Games are not alone in embracing ads, with gaming-related services like Discord and Overwolf also jumping on the ad bandwagon for revenue.
Author
Abhimannu Das is a web journalist at Outlook India with a focus on Indian pop culture, gaming, and esports. He has over 10 years of journalistic experience and over 3,500 articles that include industry deep dives, interviews, and SEO content. He has worked on a myriad of games and their ecosystems, including Valorant, Overwatch, and Apex Legends.
Abhimannu Das is a web journalist at Outlook India with a focus on Indian pop culture, gaming, and esports. He has over 10 years of journalistic experience and over 3,500 articles that include industry deep dives, interviews, and SEO content. He has worked on a myriad of games and their ecosystems, including Valorant, Overwatch, and Apex Legends.
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