Free-to-play (F2P) gaming has come a long way, from Candy Crush in the early 2010s to complex midcore titles with sprawling in-game economies today. But despite the innovation in design, user acquisition, and engagement loops, one problem remains surprisingly consistent: most players never pay. Across the industry, I’ve worked closely with mobile developers, particularly those building games, who’ve built excellent products but consistently hit a ceiling in revenue growth. And not because their games aren’t good, but because their monetization strategies depend too heavily on a small group of paying users. The Harsh Reality: Most Users Don’t Pay It’s no secret in game monetization: the vast majority of the revenue comes from a small slice of players. Industry benchmarks show: Only 1.83% of mobile gamers make in-app purchasesThe global average revenue per paying user (ARPPU) in mobile games is about $43But average revenue per user (ARPU) across all users hovers around $2–3 Only 1.83% of mobile gamers make in-app purchases 1.83% The global average revenue per paying user (ARPPU) in mobile games is about $43 $43 But average revenue per user (ARPU) across all users hovers around $2–3 That means up to 98% of players love your game but never spend a cent. And it’s not because your IAP offers are bad. It’s because IAPs are a conversion model, not a monetization one. They depend on a user's willingness, ability, and context to buy something. That context is rare. Ads Aren’t the Lifeline They Used to Be Display ads and rewarded videos helped close this monetization gap for years, but cracks are starting to show: eCPMs are falling fast, especially in Tier 2/3 marketsPrivacy policies like Apple’s ATT have sharply reduced targeting and ad effectivenessAd fatigue undermines retention, too many ads drive users awayManaging and optimizing ad formats across platforms consumes significant developer time eCPMs are falling fast, especially in Tier 2/3 markets eCPMs are falling fast Privacy policies like Apple’s ATT have sharply reduced targeting and ad effectiveness Apple’s ATT Ad fatigue undermines retention, too many ads drive users away Managing and optimizing ad formats across platforms consumes significant developer time Ads are still a valid channel, but relying on them to monetize 95% of your audience is increasingly risky. So… What About the Other 95%? This is the big question. How do you monetize players who don’t spend and don’t engage with ads? Some teams have started exploring alternative monetization layers that run passively in the background - non-intrusive methods that don’t interrupt the user experience. These models aim to extract value from users who are otherwise unmonetizable, especially in Tier 2 and Tier 3 markets where IAPs and ads underperform. Background Monetization This concept centers around turning parts of the user’s interaction (or idle resources) into revenue without requiring them to click, watch, or buy anything. These methods are typically: Privacy-compliant and consent-basedLightweight, so they don’t slow down gameplayComplementary, they don’t replace ads or IAPs, but run alongside them Privacy-compliant and consent-based Privacy-compliant and consent-based Lightweight, so they don’t slow down gameplay Lightweight Complementary, they don’t replace ads or IAPs, but run alongside them Complementary In practice, this allows developers to monetize a larger portion of their player base, without sacrificing experience or engagement. Especially in markets where ARPU is low, this can lead to a meaningful increase in lifetime value. Why This Matters The future of game monetization won’t be about choosing one model—it will be about layering revenue streams that fit your players and respect your product. one That means: Using IAPs to monetize your whalesUsing ads to engage mid-level spenders or attention-driven playersAnd using passive monetization to capture value from the silent majority Using IAPs to monetize your whales Using ads to engage mid-level spenders or attention-driven players And using passive monetization to capture value from the silent majority Most free-to-play games aren’t failing because their design is flawed, they're failing because their monetization stack is incomplete. Final Thought If you’re a developer trying to unlock revenue from the 95% of players who never convert, it’s time to think beyond ads and IAPs. Passive, background-friendly monetization can help you stop leaving money on the table, without hurting retention or UX. You don’t need to overhaul your economy. You just need a strategy that includes everyone, not just the top 5%. everyone

The is an opinion piece based on the author’s POV and does not necessarily reflect the views of HackerNoon.

This story contains AI-generated text. The author has used AI either for research, to generate outlines, or write the text itself. 

Why Most Free-to-Play Games Fail to Monetize Beyond Their Top 5% of Players

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