The multi-billion-dollar gaming industry has undergone significant changes over the years. Rapidly increasing costs for game developers, the vast competition on the market, and the growing drive for profitability, have left companies with no other choice but to adapt if they want to be successful.

Online gambling brands have introduced a range of monetization models and ultimately, this has also benefited the gaming industry. Developers have adopted gambling-based in-game mechanics such as loot boxes and skin betting to drive up their profit and add value in an oversaturated market.

The Growing Monetization of the Gaming Industry

Whether we’re talking about online gambling in the Philippines, the US, or anywhere in Europe, safe and secure gambling sites know how to make a profit, and gaming companies have followed in their footsteps. They’ve successfully integrated monetization as part of their services with features such as loot boxes, skin betting, and virtual casinos.

All these options have presented substantial opportunities for additional revenue generation. They have made the line between gaming and gambling increasingly more of a blur and created a win-win scenario. Gaming brands generate more money, while the gambling sector benefits from exposure to new audiences.

Loot boxes – These are mystery bundles of features related to a video game. You can purchase them by using virtual currency, in-game items, or real money. It’s estimated that loot boxes alone generate more than $15 billion a year in revenue. More than 50-60% of video games include this feature.

Skin betting – Also known as skin gambling, players use acquired skins to gamble on the outcome of an online game, such as a tournament or livestream with other players. It is often enabled through third-party gambling sites.

Virtual casinos – Yes, virtual casinos are also available in popular games like GTA V, for example, with its Diamond Casino & Resort update. You can use virtual currency (which you can also buy for real money) to play games like roulette, blackjack, and Three Card Poker.

This is by no means an exhaustive list of monetization models and practices used in the gaming industry. Another popular example is the in-game stores or in-app purchases (IAPs), where you can buy extra lives, unlock new levels, or upgrade your character. Weekly, monthly, or annual subscription options are also regarded as IAPs.

Estimates suggest that 79% of game apps use in-app purchases to generate revenue. In 2020 alone, gamers spent around 54 billion USD on additional in-game content. According to Statista, in 2025, this amount will be over 74.4 billion USD. This only reaffirms the significant revenue potential of monetization models in video games.

Cross-Promotion Between Gambling and Gaming Brands

It’s becoming more common for gaming companies to integrate sponsorships and in-game ads for gambling brands. Football Manager, for example, partners with different betting sites. Another players’ favorite, The Sims 4, has also introduced realistic gambling experiences for its users and, thus, the potential for online or retail casino collaborations.

If done right, these collaborations can help gaming brands expand into new markets and attract an audience interested in both gaming and gambling activities. But with that, a vital issue emerges – how can we regulate the growing number of monetization models, and more specifically, gambling features, in video games?

Regulatory Challenges

The rapid adoption of in-game gambling features has raised valid concerns worldwide. Countries such as the Netherlands and Belgium, for example, have already banned loot boxes for violating local gambling laws. Skin betting is also controversial and has recently been prohibited by one of the biggest streaming platforms in the world, Twitch.

So, while these new developments have had indisputable positive effects on the gaming industry, including revenue generation and differentiation from the competition, they also pose challenges. We see more frequent calls for proper regulations of such features, especially considering that a significant portion of the gaming market consists of players under the age of 18.

Regulatory bodies such as the Gaming Commission in the UK and GGL in Germany will have to monitor the situation and act accordingly by setting up new rules when necessary. This will require an in-depth understanding of the gaming market, which will take time and effort. Gaming and gambling, although connected, are also very different.

Future of Partnerships Between Gaming and Gambling Brands

With the two sectors becoming more intertwined, gaming companies will continue to benefit from their collaboration with gambling brands. The increasing costs and competition game developers face in their line of work require innovation and adaptability, and monetization models based on gambling seem essential for revenue generation.

We expect both sectors to develop new ways to attract new customers and retain current users. The rapid development of AI, AR, and VR will probably be one of the major focus areas in the foreseeable future. With the right partnerships, gambling and gaming brands have the potential to grow their client base and expand into new markets.