Key Takeaways

• Gaming apps primarily leverage IAPs and rewarded ads, generating up to 50% of the global app revenue despite comprising only 13% of all apps

• Non-gaming apps are increasingly outpacing games in revenue growth, with subscription models showing 30% higher retention rates

• iOS users monetize at 2.4x the rate of Android users across both gaming and non-gaming categories

• Hybrid monetization (combining IAPs, subscriptions and ads) is becoming the dominant approach in both sectors, with gaming apps seeing 30% higher revenue with hybrid models

• Ad format preferences differ significantly: rewarded video dominates in gaming (76% adoption) while native ads perform best in non-gaming apps

The Mobile App Monetization Landscape in 2024

The monetization landscape for mobile apps has changed dramatically over the past few years. With mobile app revenue projected to hit a staggering $935 billion by the end of 2024, developers are constantly refining their approaches to capture their slice of this massive pie.

What's interesting is how differently gaming and non-gaming apps approach this challenge. While they share some common ground, the strategies that work for a casual match-3 game rarely translate directly to a productivity app or a fitness tracker.

The differences in monetization approaches aren't just theoretical, they impact everything from user acquisition strategies to retention tactics and even app design itself.

Let's break down these differences and see what each sector can learn from the other.

Revenue Models: Core Differences Between Gaming and Non-Gaming

The foundation of any monetization strategy starts with the revenue model. Gaming and non-gaming apps have developed distinctly different approaches based on user expectations and behavior patterns.

Gaming Apps: The IAP Powerhouse

Gaming apps have historically dominated the IAP (In-App Purchase) landscape. According to recent data, gaming apps generate about 50% of global app revenue despite making up only 13% of all apps. That's a pretty massive imbalance that speaks to how effectively games convert users into paying customers.

The primary revenue models for gaming apps include:

1. In-App Purchases (IAPs): The bread and butter of gaming monetization. Players buy virtual currency, power-ups, cosmetic items, or unlock new game content. The beauty of this model is its scalability, top spenders (often called "whales") can spend hundreds or even thousands of dollars, creating a revenue distribution where a small percentage of users generate the majority of revenue.

2. In-App Advertising (IAA): Particularly with rewarded video ads, where players receive in-game benefits for watching ads. This model has exploded in popularity because it monetizes the non-paying majority of users (over 95% of users never make a purchase in free games).

3. Hybrid Models: Increasingly, games are combining both approaches. According to AppsFlyer's 2024 App Monetization report, games using hybrid monetization see up to 30% higher revenue than those using a single model.

What's fascinating is how gaming apps have mastered the psychological triggers that drive spending. From limited-time offers to fear of missing out (FOMO) to social competition, gaming apps have turned monetization into a science.

Non-Gaming Apps: Subscriptions Lead the Way

Non-gaming apps have a completely different revenue profile. While they initially lagged behind games in monetization effectiveness, that gap is narrowing quickly. In fact, 2024 has been dubbed "the era of non-gaming apps" by some analysts as they outpace gaming apps in revenue growth for the first time.

The primary revenue models include:

1. Subscription Models: The dominant trend in non-gaming monetization. From productivity tools to fitness apps to dating services, subscriptions provide recurring revenue and higher customer lifetime value. According to Median's 2024 insights, apps with subscription models show 30% higher retention rates compared to one-time purchase models.

2. Freemium Access: Where basic features are free but premium features require payment. This model works particularly well for utility and productivity apps where users can experience value before commiting to a purchase.

3. External Revenue Conversion: Many non-gaming apps (particularly in retail, food delivery, and services) use the app as a channel to drive external purchases rather than monetizing directly within the app.

4. In-App Advertising: Though less dominant than in gaming, advertising remains important, particularly native ads that blend seamlessly with the app experience.

The key difference? Non-gaming apps typically have more utilitarian value propositions. Users pay for concrete benefits rather than entertainment or status, leading to more rational purchasing decisions and different optimization strategies.

User Engagement Patterns and Their Impact on Monetization

The way users engage with apps fundamentally shapes monetization opportunities, and this is perhaps where gaming and non-gaming apps differ most dramatically.

Gaming: Intense, Episodic Engagement

Gaming apps are designed to create immersive, often addictive experiences with these typical engagement patterns:

• Session Frequency: Multiple daily sessions

• Session Length: Can range from minutes to hours

• Engagement Curve: Often follows a steep adoption curve with potential burnout

• Retention Challenge: Maintaining interest once core gameplay loops become repetitive

This engagement pattern creates specific monetization windows. The first 3-7 days are critical for introducing monetization options, while the 30-60 day mark typically sees either declining engagement or conversion to committed players.

Retention is the name of the game here, literally. According to FoxData's 2024 analysis, increasing retention by just 5% can boost game profitability by 25-95% depending on the genre.

Interestingly, the rise of "hybrid-casual" games (combining casual gameplay with mid-core monetization) has been a massive trend, with revenues up 30% according to Deconstructor of Fun's mid-2024 report. These games effectively bridge the engagement patterns of casual and mid-core genres.

Non-Gaming: Utilitarian, Habitual Usage

Non-gaming apps generally follow very different engagement patterns:

• Session Frequency: Often tied to specific needs or daily/weekly habits

• Session Length: Typically shorter, more focused sessions

• Engagement Curve: Slower adoption but potentially longer retention

• Retention Challenge: Demonstrating ongoing value and becoming part of routines

This creates a completely different monetization timeline. The decision to subscribe or purchase premium features often comes after weeks of use, once the app has proven its value and integrated into the user's routine.

The key monetization metrics also differ. While gaming apps often focus on ARPDAU (Average Revenue Per Daily Active User), non-gaming apps typically prioritize:

• Conversion to subscription

• Subscription renewal rates

• Feature usage that correlates with retention

What's particularly interesting is how non-gaming apps are increasingly borrowing engagement techniques from games: achievements, streaks, progress tracking - to boost user retention and create stronger monetization opportunities.

Ad Format Effectiveness: Different Strokes for Different Folks

When it comes to advertising, the effectiveness of different ad formats varies dramatically between gaming and non-gaming apps.

Gaming Apps: Video Reigns Supreme

For gaming apps, the hierarchy of ad format effectiveness is fairly clear:

1. Rewarded Video: By far the most effective format, with implementation rates above 76% among top-grossing games. Players willingly engage with these ads in exchange for in-game rewards.

2. Playable Ads: Interactive mini-games that let users sample another game. These ads show strong conversion rates (up to 7x higher than static ads) but are more expensive to produce.

3. Interstitial Ads: Full-screen ads shown at natural break points. While potentially intrusive, they can be effective when shown at appropriate moments (between levels, after achievements, etc.).

4. Banner Ads: Generally considered the least effective but still used to monetize non-paying users with minimal gameplay disruption.

The key success factor for gaming ad implementation is integration with game flow. Ads that feel like a natural part of the game experience (rather than unwelcome interruptions) perform significantly better.

Non-Gaming Apps: Native Integration is Key

Non-gaming apps show a completely different pattern of ad format effectiveness:

1. Native Ads: Ads that match the look and feel of the app's content. These perform best in content-heavy apps like news, social media, and lifestyle apps.

2. In-Feed Ads: Similar to native but appearing in scrollable feeds. These work particularly well in apps with content discovery patterns.

3. Interstitial Ads: Used sparingly at natural transition points to avoid disrupting the user experience.

4. Rewarded Ads: While less common than in games, some non-gaming apps have successfully implemented rewarded ads (for example, offering premium features for a limited time after watching an ad).

The effectiveness hierarchy in non-gaming is more dependent on app category. What works for a news app might be completely ineffective for a productivity tool.

Median's 2024 research indicates that native ad CTRs in non-gaming apps can be up to 8.8x higher than standard banner ads, showing the premium users place on non-disruptive advertising experiences.

Monetization Optimization: Different KPIs for Different Goals

The metrics that matter most for optimization reveal perhaps the most fundamental differences between gaming and non-gaming app monetization.

Gaming Apps: ROAS-Driven Optimization

Gaming apps tend to focus heavily on these KPIs:

• ROAS (Return on Ad Spend): Critical for evaluating user acquisition campaigns

• LTV (Lifetime Value): Often predicted within days of install using early spending patterns

• ARPDAU (Average Revenue Per Daily Active User): Key daily monitoring metric

• Conversion Rate: Percentage of users making first purchases

• Average Transaction Value: Particularly important for IAP optimization

The optimization cycle in gaming is typically rapid and data-intensive. A/B testing of offers, prices, and placements is constant, with decisions made based on early revenue signals.

According to AppFlyer's 2024 monetization report, iOS mid-core games with hybrid monetization models reach a stunning $9.69 ARPU by day 90, compared to $7.31 for IAP-only models, demonstrating the optimization advantage of diversified revenue streams.

Non-Gaming Apps: Retention-Driven Optimization

For non-gaming apps, the KPI focus shifts dramatically:

• Retention Rate: Often the leading indicator of subscription conversion

• Free-to-Paid Conversion Rate: Percentage of users converting to paying customers

• Churn Rate: Critical for subscription businesses

• Feature Usage: Correlating specific feature usage with retention and conversion

• Subscription Renewal Rate: The ultimate measure of delivered value

The optimization cycle tends to be slower, with greater emphasis on improving core app value and user experience rather than direct monetization tactics.

Interestingly, the metric gap is closing as both sectors adopt more sophisticated analytics. Gaming apps are paying more attention to retention metrics, while non-gaming apps are getting better at optimizing direct monetization opportunities.

Platform Differences: iOS vs Android Monetization

Another fascinating aspect of app monetization is how the platform impacts strategy for both gaming and non-gaming apps.

The iOS Advantage

Across both categories, iOS users monetize at approximately 2.4x the rate of Android users, according to multiple 2024 reports. This platform disparity shapes acquisition strategy and monetization expectations.

For gaming apps:

• iOS users spend 1.8x more on IAPs than Android users

• iOS ad revenue (ARPDAU) is typically 1.5-2x higher than Android

For non-gaming apps:

• iOS subscription conversion rates are 1.7x higher than Android

• Premium app purchase rates are 3.5x higher on iOS

This disparity creates an interesting dynamic where developers often prioritize iOS for monetization while using Android's larger user base for scale and awareness.

The biggest surprise in recent data is how this gap is narrowing for specific app categories. In emerging markets, Android monetization is growing faster than iOS, particularly for non-gaming apps in the utility, finance, and services categories.

The Rise of Hybrid Monetization in Both Sectors

Perhaps the most significant trend across both gaming and non-gaming apps is the rise of hybrid monetization, combining multiple revenue streams within a single app.

Gaming's Hybrid Revolution

Gaming apps pioneered hybrid monetization, mixing:

• IAPs for whales and committed players

• Ads for non-paying users

• Battle passes (a form of subscription) for mid-tier spenders

This approach has proven remarkably effective. According to 2024 data from Udonis, hybrid monetization gaming apps have:

• 30% higher overall revenue

• 15% better retention rates

• More balanced revenue distribution (less dependence on whales)

Non-Gaming Follows Suit

Non-gaming apps are increasingly adopting this hybrid approach as well:

• Subscription for core value

• Premium feature IAPs for additional revenue

• Strategic ad placement for monetizing non-subscribers

The statistics back this shift. Apps using hybrid models show 22% higher user LTV compared to single-model apps, according to AppsFlyer's 2024 analysis.

What's perhaps most interesting is how the sectors are cross-pollinating techniques. Gaming apps are adopting subscription elements (battle passes, season passes), while non-gaming apps are implementing more sophisticated IAP and advertising strategies borrowed from games.

Future Trends: Where Gaming and Non-Gaming Monetization is Headed

Looking ahead, several trends are reshaping monetization for both gaming and non-gaming apps.

AI-Driven Personalization

Both sectors are leveraging AI to create personalized monetization experiences:

• Gaming apps use player behavior to present customized offers and bundles

• Non-gaming apps personalize subscription options based on feature usage patterns

The difference lies in implementation. Gaming apps use AI for real-time offer optimization, while non-gaming apps tend to use AI for longer-term experience customization.

In-App Communities

Building community features to drive retention and monetization is growing in both sectors:

• Gaming apps implement guilds, alliances, and multiplayer features

• Non-gaming apps create user forums, sharing features, and social elements

The monetization impact of these features differs: gaming communities drive competitive spending, while non-gaming communities enhance perceived value and reduce churn.

Privacy Changes and First-Party Data

With ongoing privacy changes impacting targeted advertising, both sectors are adapting:

• Gaming apps are focusing more on in-game events and contextual monetization

• Non-gaming apps are investing in first-party data strategies and direct relationships

This shift has been accelerated by iOS privacy changes and the coming deprecation of third-party cookies, creating a more level playing field for user targeting and acquisition.

Frequently Asked Questions

Which monetizes better overall: gaming or non-gaming apps?

Gaming apps historically monetize better on a per-user basis, with the top 10% of gaming apps generating more revenue than the top 25% of non-gaming apps. However, non-gaming apps often have lower user acquisition costs and higher retention rates, potentially leading to better long-term economics.

What monetization model has shown the most growth in 2024?

Subscription models have shown the strongest growth across both categories, with a 32% year-over-year increase in adoption among the top 1000 grossing apps. Even gaming apps are incorporating subscription elements through battle passes and season passes.

Do hybrid monetization models work for all app categories?

While hybrid models generally outperform single-stream models, the optimal mix varies dramatically by app category. Social and communication apps often struggle with direct IAP integration, while utility apps may find that ads hurt the core user experience. Testing is essential to find the right balance.

How has the rise of AI impacted app monetization?

AI has revolutionized monetization by enabling much more sophisticated personalization. Apps can now predict purchasing probability, optimize offer timing, and customize pricing based on user behavior patterns. Gaming apps tend to be ahead in implementing these AI-driven approaches, but non-gaming apps are quickly catching up.

What monetization trends should developers watch for in 2025?

The biggest trends to watch include: advanced subscription models with tiered benefits, alternative payment methods (particularly in gaming), increased use of dynamic pricing, and greater emphasis on first-party data strategies to compensate for ongoing privacy changes in the advertising ecosystem.