A microtransaction or in-app purchase is any paid transaction that happens inside a game after the user has downloaded or unlocked it. Many studios don't have the recognition when they first launch. That’s why letting players try the game for free and then making money off of their engagement through microtransactions works. Once players are hooked, here’s how monetized content can follow.
Monetization Logic: Why It Works
Players are far more likely to try a game that costs nothing up front. Optional purchases feel like a natural next step rather than a paywall. This “hook-then-convert” model is why Genshin Impact or Clash Royale thrives on microtransactions.
Unlike one-off sales, microtransactions create steady recurring revenue. Players spend continuously on skins, passes, and upgrades, keeping studios funded and games regularly updated.
Most developers now use a mix of ads and in-game purchases to make money. For example, casual games might sell extra lives, while bigger games might offer premium tiers or cosmetic bundles.
Whether buying loot boxes, unlocking premium skins, buying in-game currency, or joining real-money hybrid systems, quick and reliable transactions are what set real platforms apart from fake ones. Players expect transparent payments, much like those in a fast payout online casino, where every deposit and withdrawal is tracked, verified, and almost instant. That feeling of trust and response keeps players engaged. In other words, delayed payouts break the illusion that the system plays fair.
Types of In-Game Purchases
Udonis Mobile Marketing Agency reveals that global in-app purchases and subscription revenue went up about 13% from 2023 to 2024, reaching almost $150 billion. This shows that digital purchases are now the main source of income for the gaming industry. Key categories include:
Consumables
These are one-off items players buy, use, and then replace. Think extra lives in a platformer, in-game currency, or temporary boosts in a racing title. They’re small, frequent purchases that encourage players to stay active without feeling like major investments.
Non-Consumables
These upgrades are permanent and will stay with the player. This includes skins, character unlocks, and new levels. Non-consumables are often used as status symbols because they don't go bad. Players can use them to show progress or make their experience unique.
Auto-Renewal Subscriptions
This model charges players regularly, usually once a month or once a year, for ongoing benefits or access to premium content. It has become popular in live-service games that get regular updates because it helps developers guess how much money they will make while rewarding loyal players.
Non-Auto-Renewal Subscriptions
These time-limited subscriptions, which are best known for their seasonal passes, give players access to special missions, cosmetics, or bonuses for a set amount of time. Users have to opt in again after the term ends, which keeps engagement going and is linked to new content drops.
Growth, Spending Behavior & Market Trends
Mobile gaming dominates in-game purchasing, accounting for roughly 55% of total revenue. Consoles stand at about 27% while PC is at 18%.
Still, only a small slice of players actually pay. A small percentage of users ever make a purchase. Within that fraction, an even smaller segment (the whales) accounts for 50% or more of total revenue, spending hundreds or even thousands on upgrades, skins, and event passes each year.
Developers have changed how they get people to spend money by fine-tuning things. Strategic gating, like limiting playtime or adding "energy" systems, gently nudges players toward optional purchases. They save time or help them move forward. In this model, wait timers and premium skips are very common, especially in mobile RPGs and strategy games.