PUBG Mobile is extremely popular in India and it is amassing a huge number of players from across the world. Despite its success and popularity in India, which accounts for one-fourth of its total mobile user base, the battle royale title is not making enough money. This could be a rising concern.

The free-to-play online multiplayer game has grown by leaps and bounds in India and has 23-30 million monthly active users and 13 million daily active users. This milestone was achieved in just a year. But volumes don't translate to revenue, and in the case of PUBG Mobile, there is less than 1 percent of its MAUs who are willing to spend on the game.

PUBG Mobile is free to all and encourages fair gameplay. But its primary source of revenue is through in-app purchases, where players can spend real money to buy virtual clothes and skins for their weapons. The introduction of Royale Pass in the game turned out to be lucrative, where players spend anywhere between Rs 799 and over Rs 3,000 depending on the nature of rewards.

PUBG Mobile new update
PUBG Mobile revenue modelScreenshot/PUBG Mobile

PUBG Mobile Royale Pass offers players with great rewards, access to missions to unlock certain content, buy exclusive items and rank up faster in the game. But none of it affects how a Royale Pass member gains an advantage over a regular player in the game.

That said, Indian users are not usually big on spending on in-app purchases, but PUBG Mobile is changing the trend. According to Entrackr, PUBG Mobile is making an average of $7-8 million each month since May this year. This roughly translates to over Rs 50 crore a month. But when you take the total MAUs into consideration, the spending is not nearly enough.

"To have 23 million MAUs and have just 0.1-1% paying users is not sustainable. A healthy ratio should be about 6-7% paying users. In mature markets that ratio goes up to 10-15% paying users," Manish Kheterpal, Managing Partner at WaterBridge Ventures, a board member of online poker platform 9stacks, told the publication.

PUBG Mobile tips and tricks
PUBG Mobile tips and tricksPUBG Mobile

PUBG Mobile hasn't revealed its earnings officially, but Entrackr obtained the information from people familiar with the firm's financials who chose to remain anonymous.

When you do the math, the $7-8 million revenue per month is not nearly enough for a game of PUBG Mobile's stature. According to the report, Tencent Games must pay Google 30 percent cut and then royalties are paid to PUBG Corp, the developer of the title. Finally, there are operation costs, which includes server costs, infrastructure costs and managing a workforce of 150 people. In the end, Tencent is left with less than $100,000 (around Rs 70 lakh), said a source. But Tencent can afford it, which is keeping the game running.

As in the case of running any business, there are ups and downs. For PUBG Mobile, the revenue spikes in the months of new Royale Pass (RP) release, which means there will be a heavier cash flow in September when the next RP arrives.