From Whales to Casuals: How Startups Are Monetising Every Gamer

The gaming industry has evolved and grown over the years. Initially, developers relied on two primary revenue models: in-app purchases (IAP) or ads.

But as player expectations grew and market saturation intensified, a third path has emerged: hybrid monetisation.

By blending IAP, ads, and subscriptions, this model has taken a huge role in foreseeing growth.

Let’s explore why hybrid models are reshaping gaming’s financial future and how startups are utilising them without alienating players.

Hybrid Monetisation Is Replacing Traditional Models

Traditional monetisation strategies are no longer working for the growing set of audience for gaming.

In-app purchases, while being lucrative, cater only to a small subset of "whales" (big spenders). Ads, though accessible, often disrupt gameplay and frustrate users.

Hybrid models bridge this gap by offering choice.

Let's consider the data:

75% of app revenue now comes from ads, with the in-app ad market projected to hit $534 billion by 2029.
Games using hybrid monetisation see 25% higher average revenue per user (ARPU) compared to IAP-only models.
Players who engage with rewarded ads (e.g., watching a video for in-game currency) are 68% more likely to make a purchase later.

All of this is about strategic integration.

For example, a puzzle game might offer a $3 ad-free subscription, sell power-ups via IAP, and reward players with bonus lives for watching a 30-second video.

Each layer caters to different user preferences: spenders, ad-tolerant players, and subscription enthusiasts.

Startups on The Front Line

For startups, hybrid monetisation is a viable and survival tactic. The simple logic behind it all is - Limited budgets and fierce competition demand creativity.

Two examples that stand out are:

1. Roforco Accelerator: Empowering Roblox Creators

Roblox’s open platform has birthed a new generation of indie developers, but standing out is tough.

Roforco Accelerator, a startup incubator, provides up to $30,000 in funding and mentorship to Roblox Studios. Their focus lies in teaching developers to balance monetisation with retention.

2. Streamloots: Monetising Streamer-Viewer Interactions

Streamloots, a platform for live streamers, lets creators sell interactive content (e.g., custom emotes or gameplay commands) during broadcasts.

While not a game itself, it exemplifies hybrid thinking:

Direct purchases for custom content.
Tiered subscriptions for premium features.
Ad-sponsored events with brand partnerships.

The Balance Between Monetisation and Player Experience

For startups, the key is to test boldly but thoughtfully. Here’s how:

1. Segment Your Audience

It is a fact that not all players spend the same way:

Whales: Target with exclusive IAPs.
Ad-engaged users: Offer rewarded videos for progress boosts.
Casual players: Introduce low-cost subscriptions (e.g., $1.99/month for ad-free play).

Tools like predictive LTV modelling can help tailor offers without overwhelming users.

2. Reward Engagement, Not Just Spending

Hybrid models thrive on reciprocity.

For example:

Let players earn in-game currency via ads or purchases.
Offer a "first purchase discount" to ad-engaged users.
Use limited-time ad-sponsored events (e.g., "Watch an ad to unlock a holiday skin").

This approach mirrors mobile hit Royal Match, which saw a 30% revenue jump after introducing rewarded ads alongside IAPs.

3. Prioritize Transparency

Players despise hidden costs. It is crucial to be upfront about:

How ads are used (e.g., "Watch an ad to continue?" vs. forced interstitials).
Subscription auto-renewal terms.
What IAPs provide (avoid "pay-to-win" traps).

Indie studio Dream Games credits its success to a "no surprises" ad policy, resulting in a 4.8/5 App Store rating despite heavy monetisation.

Developers can avoid alienating players by keeping monetisation player-first: integrate options naturally, maintain fairness, offer real value, personalise experiences, and always test and communicate openly.

The goal is to enhance the game for all players - paying or not - so everyone feels valued and engaged.

Challenges and Opportunities

Hybrid models also have their cons, and startups should navigate accordingly:

Ad fatigue: Too many ads can drive players away. Cap daily ad views or tie them to meaningful rewards.
IAP saturation: Avoid cluttering menus with purchases. Curate offers based on user behaviour.
Platform cuts: Apple/Google’s 15-30% fees on IAPs don’t apply to ad revenue - a hidden advantage for ad-heavy hybrids.

Yet, the opportunities outweigh the risks. With cloud gaming and Web3 integrations rising, hybrid models will only expand.

Imagine a future where players earn NFT skins via ads, trade them in-game, and subscribe for premium access - all within the same ecosystem.

Real-World Wins: Hybrid Monetisation in Action

Hybrid monetisation has become a defining strategy for top-grossing mobile games.

Here are some standout games and how they implement these models:

1. Call of Duty: Mobile

Monetisation Mix: Primarily IAPs (COD Points for weapons, loot boxes, and cosmetics), complemented by in-game ads and occasional subscriptions.
Why It Works: The game offers a rich variety of purchasable items while keeping ads unobtrusive, ensuring that non-paying players can still enjoy the game and contribute to revenue through ads.

2. Clash of Clans

Monetisation Mix: IAPs for gems, battle passes, and cosmetic upgrades, along with optional ad views for small in-game rewards.
Why It Works: Players can progress for free, but those seeking faster advancement or exclusive content can spend, while ad rewards are seamlessly integrated.

The New Normal: Hybrid Monetisation Dominates Gaming

The data is clear: hybrid monetisation is no longer optional.

It’s a necessity for startups aiming to survive in a market where 3% of mobile gamers account for 80% of IAP revenue.

By blending ads, purchases, and subscriptions, developers can democratize revenue, turning every player, regardless of spending power, into a valued participant.

As Roforco’s founders aptly put it: