Lesson 2: Business Model & Revenue Strategy

Your game concept and audience are set; next is deciding how the game will make money. This lesson walks you through the main business models for indie games, how to pick one that fits your scope and goals, and how to turn that into a simple revenue strategy you can plan and track.

What You'll Learn

By the end of this lesson you will be able to:

• Compare premium, free-to-play, DLC, and hybrid models
• Choose a business model that fits your game and audience
• Set a price (or price range) using comparable games and platform norms
• Outline revenue streams (base game, DLC, merch, etc.) and rough timing
• Document your revenue strategy in one page

Why This Matters

The way you monetize shapes design, scope, and timeline. A premium $15 game and a free-to-play title with in-app purchases demand different content, retention systems, and analytics. Deciding early keeps your development and marketing aligned with how you actually plan to earn.

Step 1: Review the Main Business Models

Premium (pay once)

• Player pays once to own the game (e.g. Steam, Itch.io, console).
• Pros: Simple, no live ops required, matches narrative/single-player games.
• Cons: You need enough wishlists and visibility to get that one-time sale.

Free-to-play (F2P) with optional spend

• Game is free; revenue from IAP, ads, or battle passes.
• Pros: Lower barrier to try; can scale with retention and spend.
• Cons: Needs retention design, balance, often ongoing content and analytics; more complex legally (loot boxes, age ratings).

DLC / expansions (add-on content)

• Base game is premium (or F2P); extra revenue from paid DLC, expansions, or season passes.
• Pros: Extends revenue after launch, rewards engaged players.
• Cons: Only makes sense if you plan post-launch content and have an audience that will buy it.

Hybrid

• e.g. Premium base + DLC, or F2P with optional "premium" one-time unlock.
• Pros: Combines strengths (e.g. simple entry + later revenue).
• Cons: More to design, balance, and communicate.

Pro Tip: For a first indie game, premium or premium + small DLC is usually the most manageable. F2P is a bigger commitment in design, analytics, and compliance.

Common mistake: Picking F2P because "free gets more players" without planning retention and monetization loops. Low retention often means low revenue and more support burden.

Step 2: Match the Model to Your Concept and Goals

Use your one-pager from Lesson 1 (concept, audience, success criteria).

Questions:

• Is your game short and complete (e.g. 2–6 hours)? Premium one-time often fits best.
• Is it long-lived or multiplayer with seasons? F2P or premium + DLC/season pass can make sense.
• Is your main goal learning or portfolio? Premium or pay-what-you-want on Itch keeps things simple.
• Do you want ongoing revenue? Then plan for DLC, expansions, or F2P from the start.

Examples:

• "Narrative adventure, 3–5 hours, PC/Switch, story fans" → Premium at $10–15, optional small DLC later.
• "Roguelike with daily runs and leaderboards" → Premium first; add a small DLC pack if the game gains traction.
• "Mobile puzzle with levels and power-ups" → F2P with IAP or premium (no ads, no IAP) depending on scope and audience.

Write 2–3 sentences: "My game will use [model] because [audience/scope/goal]. I will consider [one alternative] if [condition]."

Step 3: Set a Price (or Price Range)

If you go premium (or have a premium product inside F2P), you need a price.

Do this:

1. List 5–10 comparable games (from your Lesson 1 research). Note their price at launch and current price (sales).
2. Note typical ranges for your platform and genre (e.g. "indie narrative on Steam often $10–20").
3. Pick a range (e.g. $12–15) and a launch price. Consider a small launch discount (e.g. 10%) to reward early supporters.
4. Regional pricing: Steam and others suggest regional prices; use them so you do not over- or under-price in other regions.

Pro Tip: Slightly under-pricing can boost units and reviews; over-pricing can hurt both. When in doubt, start at the middle of your comparable range and adjust after launch based on data.

Common mistake: Pricing by "hours of content" only. Players care about quality and fit; use comparables and audience expectations, not just length.

Step 4: Outline Revenue Streams and Timing

List every way you expect to earn from this project and when.

Example (premium + DLC):

Example (F2P):

Pro Tip: Do not plan 10 revenue streams for a first game. One or two clear streams (e.g. "premium + one DLC") are easier to execute and explain.

Step 5: Write a One-Page Revenue Strategy

Put your decisions in one document you can revisit (e.g. when planning budget in Lesson 3 or marketing in later lessons).

Suggested sections:

1. Business model – Premium / F2P / DLC / hybrid and one sentence why.
2. Price (or range) – Launch price and platform(s).
3. Revenue streams – Table like above (stream, when, note).
4. Assumptions – e.g. "We need X wishlists to expect Y sales" or "We assume 2% of players buy the DLC."
5. Risks – e.g. "If launch underperforms, we will rely on discounts and bundles" or "We will not add loot boxes."

Keep it to one page. You will use it for budget planning (Lesson 3) and later for launch and post-launch decisions.

Mini-Task: Document Your Revenue Strategy

1. Choose your business model and write the 2–3 sentence justification (Step 2).
2. Set your price or price range using comparables (Step 3).
3. List revenue streams and timing in a short table (Step 4).
4. Assemble the one-page revenue strategy (Step 5).

Save it next to your concept document. In Lesson 3 you will use both to plan budget and resource allocation.

CTA: Share your chosen model and price with a small group (Discord, Reddit) and ask: "Does this match what you would expect for a game like [your one-liner]?" Use feedback to refine.

Troubleshooting

"I want to do F2P but my game is single-player and short"
Consider premium first. F2P usually needs retention loops, regular content, and clear optional spend; it is a big step for a first project.

"My comparables are all over the place in price"
Narrow to games with similar scope (length, polish, audience). Use the median price of those 5–10 titles as an anchor.

"I am not sure I want to monetize at all"
You can still write a "revenue strategy" that says "free / pay-what-you-want for portfolio and learning." That is a valid choice and keeps your planning consistent.

Recap and Next Steps

You now have:

• A chosen business model and short justification
• A price (or range) based on comparables
• A simple table of revenue streams and timing
• A one-page revenue strategy document

In Lesson 3: Budget Planning & Resource Allocation you will turn your concept and revenue plan into a realistic budget and resource plan (time, tools, contractors).

For more on monetization and storefronts, see our guides and help articles on publishing. Bookmark this lesson and revisit your revenue strategy when you get close to launch.