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Top 5 Ways to monetize your Mobile Game

One of the most frequently asked questions about the mobile game market is how they actually monetize. Since most of the gaming apps are free nowadays, it’s hard to imagine the huge amounts of money that this industry is generating. In 2019 alone, the mobile game industry had $49 billion in revenue and $16.9 billion in profits, which takes up 60% of the total gaming industry’s revenue! So how are the games doing it when most of the games are free? And which models is the best one for your game? Let’s find out.

1. Premium model

Just as the traditional gaming model, a small portion of the mobile game industry stay to their root and sell their games for a fixed price. Even though this side of the market is quite small, both the Google play store and Apple’s Appstore have created great ways to get your premium mobile game visible. Not only do paid games have their own top games list, they are also quite often featured. However, nowadays a lot of developers put a minimal price tag on their game to reach the top of the paid chart.

APPLE’S APPSTORE TOP PAID CHART The Apple Appstore Top Paid Apps Section

When it comes to mobile game monetization, the premium model can be seen as the most simplest. The developer only needs to create a product that the user can use from start to finish, and sell it at a fixed price. But this is much harder to be done than on traditional gaming platforms such as PC and Consoles. Since most other games are free, the user does not feel the necessity to lose any money to purchase games, and picks the more available free stuff first.

And so, developers have created another way of monetizing their premium games: free to try, pay to continue playing. By setting up their games as free, and requiring the player to pay for either the full game, or for each individual level, the games can be considered as old school demos. Games now can convert players who used to be shunned by the price tag, to try the game out first.

This model is for you

If you are a more traditional game developer, and don’t want to think of ways of improving your monetization model, this is for you. All you need to do is to create a game, which the player can play from start to finish.

But

If you follow the mobile game industry closely, you will see right away that so few studios are actually taking this approach. So why might this be?

First of all, the mobile market itself is crowded with free games, and the user base is not exactly knowledgable in gaming. So when they see those free AAA games from huge studios such as Candy Crush and Supercell, they won’t think even twice which game to pick.

Second of all, the premium market is full of IPs and PC/console ports. So even with knowledgable gamers, it is hard to compete against games like Journey and Final Fantasy.

List of the most popular paid games. The top paid games are all already popular games

Last of all, premium games are just not scaleable. The cost to acquire a user is quite high, and after you have acquired that user, you won’t receive any further revenue from them anymore.

2. Ads

This is probably the most known mobile game monetization technique of them all. What people don’t realize however, is that there are different types of ads, with different revenues and purposes.

a. Interstitial

Between a specific number of levels, you can put in interstitial ads. These are short video ads that either run for only about 5 seconds, or are skippable after a short amount of time. These are mandatory for the user to watch, and are usually placed between game levels, or transitions between menus.

Since they are so short, and most of the revenue you get is from click throughs and conversions, they give out a much lower revenue stream for each ad you are showing. But even so, since they are mandatory for the user to watch, you could create a sure way to get some revenue across, with the only price to pay being lower retention and game ratings from frustrated players.

This model is for you

If you have a short gameplay loop and can show an ad after each loop. As long as you keep the player happy, the player won’t be too annoyed to lose a few seconds of ad watching.

Since they require a short gameplay loop to stack effectively, this monetization model is used most in Hyper-casual games.

But

Since the revenue of these ads are quite low, you are going to need a huge player base to be able to scale up your game.

By adding fewer ads, you would annoy your players less, but your revenue would go down a lot. Add too many, and your retention might suffer. It is quite hard to find the balance.

HYPER-CASUAL GAMES USUALLY HAVE A LOWER STORE RATING Hyper Casual Games that make use of lots of Ads tend to have lower Ratings

b. Rewarded

Rewarded ads are video ads that run for about 30 seconds, which are unskippable. The user would voluntarily watch a rewarded ad in exchange for in-game goods such as currency or game continues.

Screen where player can select to watch ads to continue after dying Games like Tiles Hop let you continue a song or buy new songs by watching video ads

Opposite from interstitial ads, rewarded ads are long and unskippable, and hence bring in much more revenue. But since they are not mandatory, the number of ads the user is watching also depends on how you design your game.

This model is for you

If your game has consumable items, which the player has the need to constantly buy, like hearts and in-game currency. The player has to keep spending your consumable items and have the need to get more.

In contrast of interstitial ads, the player not only chooses to watch an ad themselves, they get something in return, be it a time saver or a neat in-game item. This reduces the chance that the player will become upset while playing your game, even though they have to watch longer ads.

Because they are longer, you will get more revenue for each ad watched.

But

For a game to create higher revenue through rewarded video ads, you will have to keep the game’s economy in mind. Creating an economy where the player gets a lot of value just by watching ads over and over again would break it. On the other hand, creating an economy where the player doesn’t get much after watching a rewarded ad would give the player less of a reason to watch it in the first place.

Screen from adventure capitalist allowing user to pay for a boost Adventure Capitalist limits the number of ads you can watch each day

Another thing to keep in mind is that even though the revenue you receive from rewarded ads is higher than interstitials, it is way harder to have players watch them. While with interstitial ads, the player is pretty much forced to watch them; with rewarded ads, you have to convert them. Not everyone is going to watch the rewarded ads and they will definitely not watch them as much as interstitial ads.

c. Banner

Banner ads are probably the oldest form of ads in the digital age. They are constant ad stripes that show either on top of the screen, or on the bottom. While they are still used quite often on the web, games are using them rarer and rarer.

This model is for you

If you still have some screen space you can sacrifice. If you don’t have the screen space in your gameplay, some devs even put the banner ads in pause menu, main menus, etc.

But

The revenue is seriously not worth it. The click through rates and conversion rates are low since there is just not much information that can be given through a small banner ad space. The developer would have to sacrifice screen space, visibility and user experience.

3. In app purchases

Another well known monetization technique, which is slowly appearing in more and more PC and Console games. You pretty much just sell in-game items for real life money. This monetization model can be seen from casual games up to the most hardcore games.

Screen of candy crush in app purchases In App Purchases are detrimental to the monetization of Candy Crush...

Screen of call of duty in app purchases ...or Call of Duty

Games like this get most of their revenue from "sharks", "dolphins" and "whales" - phrases for users that single handedly spend a lot in your game and create most of your revenue.

This model is for you

If your game has a bigger game loop and requires the player to constantly stock up on those items. The revenue of this is also much higher than from ads, giving you a much higher revenue per purchase.

But

Since the conversion rate for these purchases are quite low, you are going to need a lot of users to be able to get those whales and dolphins in your game. If you can’t handle that, it might be better to stick to those rewarded ads, which the users are more willing to use.

4. Subscription

A newer monetization model. Subscriptions have been around way longer than games, but only recently have mobile games added them to their arsenal of monetization techniques.

The gist of it is that users pay in a regular interval for special access to your game’s features. The features might be special content like special music lists such as in Amanotes games, to battle passes in games like Fortnite and Archero.

Character selection screen with the battle pass highlighted for purchase on Fortnite Pay extra for a battle pass that grants you extra loot in Fortnite

This model is for you

If your game is already big and needs a way to scale up even more. This is a good way to distribute that extra content that takes forever to sell in IAP and rewarded videos. Users who have already subscribed to your service before, have a higher chance of returning.

But

As having said before, the game needs to be already big and having a lot of content. To convert users to buy your subscription the content has to be really lucrative.

5. Apple Arcade and Google Play Pass

Another rather new monetization model. For those who are not familiar with Apple Arcade and Google Play pass yet, they are pretty much Netflix subscriptions for mobile games. The user pays for a subscription monthly, and is able to play any game from a large selection of premium and high quality games without any ads.

But how does Apple and Google share the revenue you might ask. The way they do it, is by tracking the user’s playtime in your app, and dividing the revenue to the developers based on it.

This model is for you

If your game is of higher quality and perhaps initially intended for the premium model, this might be a good fit for you. Your game will face less competition than in the general store, it will get featured by the stores (App Store or Google Play) more often and you don’t really have to worry much about marketing, as Apple and Google are doing that for you.

But

To get your game into Apple Arcade and Google Play Pass in the first place might be quite difficult. You would have to get Apple’s and Google’s attention first. And if you get in, you will have to compete with Apple’s and Google’s handpicked products from top developers.

Martin Vu