Free-to-play mobile games are phone games that anyone can download for free, and that earn money from purchases inside the game and from ads. They are also called F2P games. Almost every popular mobile game in India is free to play. Most players never pay anything, and most of the money comes from a small share of players who spend a lot.
A free-to-play game earns in two ways. The first is in-app purchases. Players buy extra lives, new characters, hints or a season pass, usually with a virtual currency such as coins or gems. The second is ads. The game shows a short video ad between levels, or gives the player a reward for watching one. In-app advertising monetisation software offers each ad slot to many advertisers and sells it to the one that pays the most. Many of those ads arrive through a mobile ad network.
Consider a word puzzle game made by a studio in Bengaluru. In one month, 10 lakh people play it. Most of them play free and see ads. The ads earn the studio about ₹2 per player that month, or ₹20 lakh in all. Only 2% of the players, about 20,000 people, buy anything. Most of them spend a little, but a few hundred spend thousands of rupees each. Together, the buyers spend ₹40 lakh. So 2% of the players bring in two-thirds of the studio's money.
The studio also has to find new players. It buys ads for its game inside other apps. Say each new player costs the studio ₹60 in ads. The studio must earn more than ₹60 from that player over all the months the player plays, or every new player is a loss. A mobile measurement partner (MMP) tells the studio which ad brought each player. Then the studio can stop paying for the ads that bring players who never spend.
Why do Indian studios make games for the world? Indian players spend much less than players in America or Europe. So a studio in Bengaluru often earns most of its money from players abroad, through a game played in English.
A free-to-play game is never finished. It runs as a live service game, with new levels and events every week. The studio uses game analytics to see which levels make players quit. Studios now also use AI-generated content for art, text and new levels. Players without cards can buy the game's currency on a game top-up website. Some games of this kind copy casino games, and are called social casino games: they are played with coins that are never paid out.