Which F2P monetization model wins for your genre? That is the only version of the question worth asking, because the answer for a mid-core RPG has almost nothing in common with the answer for a hypercasual runner. This is a rewrite of an earlier version of this page. The architecture held up. The numbers did not, and several of them contradicted each other inside the same article, so I have rebuilt them against named primary datasets and removed the ones I could not source.
What follows is the four F2P monetization models, what each of them demonstrably earns, and a genre-by-genre decision matrix.
Key Takeaways
- Midcore and casino are IAP businesses. AppsFlyer measures roughly 90% of midcore revenue and 83% of casino revenue coming from in-app purchases. Ads there supplement the payer curve rather than forming a second pillar
- Rewarded video does not dominate casual ad revenue. TopOn measured interstitial at 44.25% of casual game ad revenue against 39.35% for rewarded video in H1 2025. Rewarded leads in midcore, at 51.77%
- Ad eCPM is drifting down. Casual Android rewarded eCPM fell from $3.60 in H1 2023 to $3.02 in H1 2025. An ads-only plan built on 2023 economics is already stale
- Hybrid adoption is contested. TopOn says over 72% of developers, AppsFlyer says under 30% of games. Both are right about their own sample, and the gap is a selection effect
- Most ARPDAU benchmarks do not exist. I can defend $0.03-$0.08 for hypercasual, $0.01-$0.05 for ads-only casual and $0.15-$0.50 for hybrid-casual. For IAP-dominant and subscription-led games, no primary source publishes one
- Scale does not rescue a single stream. Royal Match grossed $1.37bn in 2025 and still finished slightly below its 2024 total
The Four F2P Monetization Models at a Glance
| Model | Where the revenue comes from | ARPDAU you can actually cite | Best genre fit | Revenue predictability |
|---|---|---|---|---|
| IAP-only | Around 90% of midcore revenue, 83% of casino (AppsFlyer, 2025-26) | No primary benchmark exists. Model it from your own payer share and order value | RPG, strategy, casino | Medium, concentrated in few payers |
| Ads-only (IAA) | Interstitial and rewarded video carry it. Banner earns 6.50% of casual ad revenue on 37.01% of impressions (TopOn) | $0.03-$0.08 blended hypercasual; $0.01-$0.05 casual ads-only | Hypercasual, word | Low, eCPM moves with ad budgets |
| Subscription | 7% of revenue in games running all three streams, up from 4% a year earlier (AppsFlyer) | No standalone benchmark. A $5 to $10 monthly plan is $0.17 to $0.33 per subscriber per day at most | Word, trivia, lifestyle | High, recurring, small base |
| Hybrid (IAP + ads + pass) | Roughly 35% IAP, 56% advertising, 7% subscription in three-stream games (AppsFlyer) | $0.15-$0.50 blended for hybrid-casual | Hybrid-casual, casual, midcore | High, diversified |
Two things in that table deserve emphasis. The subscription row used to carry an ARPDAU band on this page that its own pricing made impossible, which is why it now carries arithmetic instead of a benchmark. And the IAP row has no ARPDAU figure only because no source I trust publishes one. The absence of a number there says nothing about the size of the model.
IAP: Still Where the Money Is
Sensor Tower put mobile game in-app purchase revenue at approaching $82 billion in 2025, growing 1.3% year on year. Growth that slow is the important part. Non-game app spending climbed 21% over the same period, so games are now competing for attention against categories monetizing far faster.
Where IAP dominates, it dominates completely. AppsFlyer’s monetization analysis, drawn from $900 million in verified purchases and $7.2 billion in advertising revenue between January 2025 and March 2026, puts midcore at 90% of revenue from purchases and casino at 83%. If you are building in those genres, ad revenue is a supplement to smooth non-payers, and treating it as a second pillar will distort your design.
Scale does not remove the risk. Royal Match grossed $1.37bn in 2025 according to Appmagic, and still came in slightly under its 2024 figure. An IAP-dominant model at the top of the market is a retention business first, which is why a title whose retention is not top-decile will underperform on the same monetization design.
When and how you surface an offer matters as much as what is in it. For paywall timing, value triggers and bundle anchoring, see our mobile game paywall optimization playbook 2026. Studios with a meaningful whale cohort should also evaluate the web shop playbook to recover platform fees on their highest-value players. And as you iterate on offers, factor in the 2026 gaming compliance landscape, which already constrains how monetization can be designed for younger audiences.
Ad Monetization: What the Formats Actually Earn
The claim that rewarded video accounts for most mobile game ad revenue is wrong for casual games, and the correction changes how you should build an ad stack. TopOn’s H1 2025 report, aggregating ad monetization data across its partner games from January to June 2025, breaks it down as follows.
| Ad format | Casual: share of ad revenue | Casual: share of impressions | Midcore: share of ad revenue |
|---|---|---|---|
| Interstitial | 44.25% | 29.31% | 30.27% |
| Rewarded video | 39.35% | 21.25% | 51.77% |
| Native | 9.59% | 11.95% | 8.76% |
| Banner | 6.50% | 37.01% | 7.72% |
| Splash | 0.31% | 0.48% | 1.48% |
Read the first two columns together. Banner takes 37.01% of impressions in casual games and returns 6.50% of the revenue, while rewarded video earns 39.35% of revenue from 21.25% of impressions. Rewarded video and interstitial both return more revenue than their impression share, and banner does the opposite by a wide margin.
The midcore column inverts the casual picture. Rewarded video leads there at 51.77%, and TopOn explains why: midcore eCPM is higher “mainly because these games focus more on IAP models, and their higher user acquisition cost (CPI) signifies a user base with higher commercial value.” Advertisers pay more to reach players who are already known to spend.
Pricing is drifting down. Casual Android rewarded eCPM went from $3.60 in H1 2023 to $3.02 in H1 2025, down 7% year on year, with interstitial down 11%. Regional spread is wider than the trend: casual rewarded eCPM in Europe and North America runs $8.90 on Android and $12.24 on iOS, against low single digits in Southeast Asia and Latin America. If your install base skews toward cheap geographies, your ad revenue skews with it.
That gives you the only ad ARPDAU formula worth using. Rewarded impressions per DAU, multiplied by eCPM, divided by 1,000. Both inputs are yours to measure, and neither is safely borrowed from a benchmark table.
Studios looking at direct brand deals rather than programmatic should see our in-game advertising and brand partnerships guide. Everyone else should check that ad revenue can plausibly cover acquisition cost before committing to an ads-only model, because at these eCPMs it frequently cannot.
Subscription: Small, Growing, and Arithmetically Bounded
Subscriptions are the smallest of the four streams and the most often overstated. In games running purchases, advertising and subscriptions together, AppsFlyer measured subscription revenue rising from 4% of total revenue in January 2025 to 7% in early 2026, with advertising falling from 63% to 56% over the same window and purchases holding at roughly 35%.
The ceiling is easy to compute and worth computing before you build one. A $5 to $10 monthly plan is $0.17 to $0.33 per subscriber per day. Multiply by whatever share of your daily actives you realistically expect to subscribe and the contribution to blended ARPDAU lands in the low cents. That is a useful margin on a stable base, and it is not a monetization model on its own. Beyond mobile, the picture differs in cloud gaming telco partnerships, where the subscription is the product rather than a layer on top of one.
Battle passes are the other commitment device, and they behave differently. GameRefinery found battle passes in roughly 60% of the top 20% grossing mobile games, a figure worth quoting with its vintage attached, because the measurement is from 2022 and nobody has republished it since.
| Feature | Subscription | Battle pass |
|---|---|---|
| Recurring | Yes, auto-renew | No, per season |
| Commitment asked of the player | High | Low |
| Churn pattern | High when content-locked | Lower, seasonal refresh resets it |
| Revenue shape | Steady baseline | Spikes at season start |
| Best for | Daily perks, time-savers | Engagement loops, progression |
From running LiveOps-driven monetization systems, the combination that works is a seasonal pass carrying engagement and a light subscription carrying convenience. The pass does the heavy lifting.
Ready to audit your current monetization stack? Download our free F2P audit guide and benchmark your game against what you can actually verify.
What Is Hybrid Monetization, and How Common Is It Really?
Hybrid monetization combines in-app purchases, in-app advertising and a recurring commitment layer such as a battle pass or subscription in one game. The logic is that payers and non-payers are monetized through different mechanisms rather than one of the two groups being left out.
How widely it is used depends entirely on who is counting, and the disagreement is large enough that you should know about it before quoting a figure. TopOn reports that “over 72% of developers adopted an ‘In-App Purchase (IAP) + Advertising’ hybrid monetization model” in H1 2025. AppsFlyer, working from 9,600 gaming apps and 24.8 billion installs across 2025, reports that hybrid monetization “is currently present in less than 30% of games,” with casual at 33%, hypercasual at 32%, casino at 20% and midcore at 15%.
Both numbers are defensible. TopOn measures games that use its ad mediation platform, which is a population already committed to advertising. AppsFlyer measures an attribution base spanning games that never integrated an ad SDK at all. The 72% figure describes adoption among ad-monetized games. It does not describe the industry, and it is quoted as though it does across most of the content on this topic.
For the operational setup, including how to balance the split and avoid cannibalization, see our hybrid monetization for mobile games guide.
The Hybrid-Casual Segment in Numbers
Hybrid-casual is the one segment where the monetization model is baked into the genre definition. Matej Lancaric’s June 2025 analysis of App Store data put segment net revenue at a record $174.8M in March 2025 on the App Store alone, up from roughly $100M in early 2024. That is growth of about three quarters. The earlier version of this page called it a doubling.
Color Block Jam was the segment’s standout, at $43.6M of net revenue in Q1 2025, which Lancaric puts at 16% of the category total. It is worth being precise about what that title demonstrates, because this page previously got it backwards. He describes its record month as purchase-driven rather than ad-driven, so Color Block Jam is an IAP-led title inside an ads-heavy segment. The segment-level profile is a separate claim: “hybrid-casual games usually have a 40-50% revenue profile driven by IAPs.”
If you are building here, our hybrid casual game design strategy guide covers the design and monetization playbook in full.
Which F2P Monetization Model Wins for Your Genre?
Your monetization model should follow from genre, retention and acquisition cost. Below is the decision matrix I use when advising studios through Game Growth Advisor’s consulting services. The useful output is a sequence rather than a single stream.
Genre-by-Genre Monetization Decision Matrix
| Genre | Start with | Then layer | What the revenue base looks like | ARPDAU you can plan against |
|---|---|---|---|---|
| RPG / strategy / midcore | IAP: currency, bundles, cosmetics | Battle pass and LiveOps events, then limited rewarded video | Around 90% of revenue from purchases (AppsFlyer) | Not published. Derive from payer share and order value |
| Casino | IAP | Rewarded video for top-ups and continues | Around 83% from purchases (AppsFlyer) | Not published |
| Casual / puzzle | Rewarded video plus light IAP | Battle pass at month 2, then a no-ads option | Hybrid present in 33% of casual games (AppsFlyer) | $0.01-$0.05 ads-only, higher once IAP lands |
| Hypercasual | Ads only: interstitial plus rewarded | Hold off on IAP until retention justifies the build | Hybrid present in 32% of hypercasual games (AppsFlyer) | $0.03-$0.08 blended |
| Hybrid-casual | All three streams from day one | Seasonal pass at month 2, then cosmetics and cross-promo | 40-50% of revenue from IAP (Lancaric, 2025) | $0.15-$0.50 blended |
| Word / trivia / lifestyle | Light IAP plus rewarded on hint reveals | Subscription for the committed segment | Subscription reached 7% of revenue in three-stream games | Not published |
The matrix is a starting point. The genre teams get most wrong is hybrid-casual, where they either treat it as hypercasual and never build IAP infrastructure, or treat it as midcore and over-engineer the meta. Our hyper-casual to hybrid-casual migration playbook goes deep on that transition. For RPG, strategy and 4X, our guide to midcore game monetization in 2026 covers the IAP stack and LiveOps cadence those titles require.
Reading the Matrix Against Your Acquisition Cost
A model that wins for your genre on paper still loses if your acquisition cost outruns it. Casual and puzzle installs on Android run roughly $1.50-$3.50 in the US, $0.60-$1.50 in Western Europe and $0.15-$0.60 in LATAM and Southeast Asia, with iOS costing three to four times Android in the same market and genre. There is no absolute go or no-go threshold, and no credible source publishes one. The usable rule is relative: acquisition cost should sit at 30% to 70% of projected lifetime value.
Liftoff’s D30 return on ad spend figures for casual games are 47% on iOS against 15% on Android, measured on 2024 data and published in its 2025 casual gaming report. Fifteen percent recovered in the first month is the number that should drive the model choice. If ad revenue alone has to repay a Tier 1 Android install, the arithmetic almost never closes, which is what pushes casual titles into hybrid regardless of design preference. Cross-reference the full CPI by genre and platform benchmarks before locking anything.
Teams unsure whether the constraint is pricing, ad load, payer segmentation or retention should treat it as a mobile game monetization consulting problem rather than a store configuration task.
Sequencing: Start With, Then Layer
| If your game has | Start with | Then layer |
|---|---|---|
| Strong D1 and a proven core loop | IAP: cosmetics and bundles | Rewarded ads, then a battle pass |
| Mid D1 and a broad casual audience | Rewarded video plus light IAP | Battle pass at month 2 |
| Weak D1, hypercasual shape | Ads only: rewarded plus interstitial | Fix acquisition cost before adding IAP |
| Strong social or competitive features | Battle pass plus IAP | Subscription for daily perks |
The mistake I see most often is bolting monetization on after launch — the costliest entry on our list of mobile game monetization mistakes, because it is the hardest to fix once the core loop is locked. Your soft launch phase should A/B test monetization layers as rigorously as it tests retention, and ARPDAU should sit alongside your core KPIs from the first cohort, because it is the one metric that combines both revenue streams into a single health indicator.
F2P Monetization Best Practices 2026
1. Segment Before You Monetize
Payers, rewarded-ad viewers and fully non-monetized players behave differently and should sit on different tracks. Build deep bundles and progression-triggered offers for high-value payers, entry-priced starter packs and a no-ads option for light payers, and rewarded video plus a free battle pass track for everyone else.
I am not going to attach an uplift percentage to this, because the figures circulating for segmentation gains have no primary source behind them. The reason to do it is structural: an offer tuned for a whale and shown to a non-payer is wasted inventory in both directions.
2. Sequence the Layers, Do Not Ship Them Together
The instinct after launch is to release the shop, the pass, the subscription and the ad stack at once. That creates offer fatigue and makes attribution impossible. A workable order:
- Weeks 1-2: rewarded video only. Establish the opt-in habit and measure your actual impressions per DAU, since no published benchmark for it exists
- Weeks 3-4: introduce IAP with a starter pack at an entry price tier and one cosmetic bundle. Measure payer conversion on your own cohorts
- Month 2: add a seasonal pass once you have enough engaged players to justify the content cost
- Month 3 and beyond: test a light no-ads subscription for your most committed segment
None of this holds if the underlying economy is broken. See our guide to game economy design for the currency sources and sinks every model above depends on. Studios using AI-driven optimization for offer timing can compress this schedule, though not skip it.
3. Battle Pass Design
- Launch the pass after the core loop has landed, not at release. Players need a reason to commit before they will buy a commitment device
- Free track plus paid upgrade: the free track builds the habit that makes the paid track legible
- Seasonal refresh rather than permanent: a refresh resets the urgency that a permanent pass loses
- Reward progression, not just purchase: if the paid track feels like catching up rather than getting ahead, it churns the players who bought it
4. Rewarded Ad Practice
- Place at decision points: post-level, near-miss continues and resource shortages. Generic “earn coins” placements underperform, though I have not found a published measurement of by how much
- Cap frequency and treat the cap as a hypothesis: pick a starting cap, watch D7 retention and revenue per session together, and move it. Any specific cap presented as an industry threshold is a design convention rather than a measurement
- Disable interstitials for recent payers: anyone who has purchased in the last 30 days should see zero forced ads. This is the fastest available way to lose a paying player
- Run mediation and test floor prices by market: given the regional eCPM spread above, floors set globally leave money in Tier 1 and block fill in Tier 3
5. Fairness and Compliance Principles
In 2026, fairness is increasingly a regulatory question as well as a design one. It is worth knowing what actually binds you, because this area is widely misreported:
- Loot box odds disclosure: Three jurisdictions require it by law. China since 2017, Taiwan since 2023, and South Korea since March 2024, the last being by far the most actively enforced. The UK relies on voluntary principles published by Ukie in 2023, after the government declined in 2022 to extend gambling law to loot boxes. Belgium does not require disclosure at all: its regulator has treated paid loot boxes as unlicensed gambling since 2018, though it acknowledged in late 2024 that the ban is hard to enforce. In the Netherlands, the penalty imposed on Electronic Arts over FIFA packs was overturned by the Council of State in March 2022. In practice the binding constraint is platform policy: Apple (guideline 3.1.1, since 2017) and Google Play (since 2019) require odds disclosure worldwide, which is why it has become near-universal.
- No pay-to-win in PvP: Games with direct competitive advantage purchasable via IAP face App Store and Google Play review risk in 2026, especially in EU markets.
- Cooldown periods on high-value offers: The EU Digital Fairness Act is still only an announced initiative. The Commission’s proposal is expected in Q4 2026 and no application date exists, so nothing in it binds you yet. What does apply is soft law: the CPC network’s Key Principles on In-Game Virtual Currencies, adopted in March 2025, set out how national consumer authorities read existing law on price transparency and the real cost of content. A 24-hour minimum on limited-time offers remains a sensible default.
- Minor protections: COPPA and equivalent local regulations now require explicit parental consent for IAP targeting players under 13. Segment minors out of whale-optimization systems.
- Refund policy clarity: Apple’s 90-day IAP refund policy and Google Play’s 48-hour window should be factored into revenue recognition — and into retention strategy. A player who triggers a refund is almost always gone. Catching dissatisfaction before refund with a proactive support touch is worth building.
What We Could Not Verify
Everything above is sourced to a named dataset with a date. Several figures that appeared in the earlier version of this page are not here, because I could not verify them. Stating the gap is cheaper than filling it.
- Payer conversion rate. The widely repeated claim that around 1.8% of F2P players make a purchase, and that this group accounts for 95% of all app spending, has no primary source I could locate. It is also internally impossible, since everyone who spends necessarily accounts for all spending. The closest Tier A figure is AppsFlyer’s install-to-purchase conversion of 2.6% within 30 days, and that measurement is from Q1 2022, is install-based rather than DAU-based, and is too old to publish as a 2026 benchmark
- ARPDAU for IAP-only and subscription-only models. No primary source publishes either. The bands previously shown here were internally consistent with each other and supported by nothing
- Subscription conversion rate. The 5-12% figure this page carried was impossible against its own subscription pricing. AppsFlyer’s install-to-subscription rate of 0.2% within 30 days is the only Tier A figure I found, and it too dates from Q1 2022
- Rewarded impressions per DAU by genre. The 3-5 per day figure in circulation is a design recommendation rather than a measurement, and no source publishes it by genre
- Battle pass share of IAP revenue. Frequently quoted at around 22%. I found no primary source, so the figure is gone
- Player sentiment toward rewarded video. The 74% and 82% figures previously here trace back to a Tapjoy survey of 2,615 US consumers conducted in April 2017, run by a rewarded video vendor, and reported at the time with that conflict of interest noted. Nine years old and vendor-run is not a basis for a 2026 claim
- Mobile gaming subscription revenue as an absolute number. The $4.2bn figure has no primary source I could find. AppsFlyer’s share-of-revenue data is what replaced it
- D90 ROAS by monetization model. Liftoff publishes D30. The D90 comparison previously shown here traced to an aggregator citing another aggregator
- Hybrid adoption rate. Genuinely contested between two Tier A sources, as set out above. I have published both rather than picking one
Conclusion
The honest comparison in 2026 is narrower than the volume of published benchmarks suggests. Midcore and casino are purchase businesses at around 90% and 83% of revenue. Hypercasual is an advertising business at a blended $0.03-$0.08 whose eCPM base is eroding. Everything between them is hybrid, and hybrid-casual is where the model is most fully worked out, at 40-50% of revenue from purchases and a blended $0.15-$0.50.
What decides the outcome is the order more than the label. Establish one stream, measure it on your own cohorts, then add the next. The teams that get this wrong are almost always the ones who shipped everything in the same build and then could not tell which layer was working.
If your studio needs senior leadership to own the transition, a fractional CMO with F2P expertise can design and run it. For a narrower outside read on the monetization system, see the mobile game consulting offer.
Need help designing a monetization strategy for your game? Book a call with Game Growth Advisor and get a roadmap built on numbers you can defend.