The top game monetization strategy to maximize profit

Let’s face it: optimizing your game monetization strategy is harder than ever right now. Before IDFA deprecation, mobile games had an established “price discrimination” UA model: they would identify potential users that fit their game’s profile and target them with ads, often gladly paying more to reach these high-value users. But IDFA deprecation upended this entire strategy - as of 2021, developers can no longer target as effectively, they don’t know what to pay for each ad impression, and they have to generate many more wasted installs to engage their core users. 

This has two main implications for monetization: 

• Immediately following the end of the IDFA, cost per install (CPI) on iOS for core games increased by 78%. That means your monetization strategy needs to generate even more revenue per user than before, in order to stay profitable - which is no easy feat. 
• Additionally, since you can no longer weed out users through precise user acquisition targeting, you need to make sure your monetization strategy is set up to monetize all types of players. That means implementing diverse monetization strategies is a must. 

So what’s the perfect monetization strategy? That's going to depend on your game’s economy, genre, users, etc. But to help you determine what’s best for your unique game, we’re diving into the top game monetization strategies and sharing examples of studios that are excelling at maximizing profit per player.

Top mobile game monetization strategies to improve LTV

We could kick this article off with an entire list of 20-30 ideas for mobile game monetization strategies - like from live ops, brand partnerships, and ads. But you could get that info anywhere. Instead, we’re going a step further to elaborate on the two strategies we think are most effective for maximizing LTV:

• In-app purchases (IAPs)
• Web shops

In-app purchases

IAPs are one of the most popular types of mobile monetization, especially in this era of freemium apps. In fact, almost 80% of game apps use IAPs as part of their game monetization strategy.

Developers can distribute their games as free-to-play, then sell IAPs to users. This mobile game monetization strategy has the potential to yield huge profits:

• In 2023 in the US, total store revenue for free game apps reached $16.7 billion
• And the top-grossing apps over that same time period achieved the following ARPUs (average revenue per user):some text
  • War and Order (iOS): $304.47
  • Evony (iOS): $268.87
  • Game of Thrones: Conquest (iOS): $190.56

There are three main types of IAPs: consumables, non-consumables, and subscriptions:

Consumables

Consumable IAPs are items players use, deplete, then repurchase - like in-game currency, energy, or boosters. They’re often the primary long-term revenue driver in F2P games, since engaged players buy them repeatedly to progress faster or gain an edge. Keep in mind there’s a lot of complexity to consumables - your economy and the gameplay context are major factors. But to help you get started, here are 3 of the key principles to keep in mind when developing a consumable IAP game monetization strategy: 

• Valuable but fair: Consumable IAPs should provide a feeling of real benefit (e.g., skipping wait timers or gaining bonus resources) and satisfaction. Make sure to balance that against feeling predatory or costing so much that the game becomes unenjoyable.
• Skillful spending: It's also important to tie consumable value to strategic choices. The aim is to have players feel clever for using them at the right times, rather than letting them pay to simply progress through the game.
• Balance: This is probably the most critical part of a consumable IAP game monetization strategy. You need to strike a delicate balance between how quickly players consume their IAPs vs. how quickly they can earn them and purchase them. Make sure the resources that players are buying feel valuable and meaningful - but not so valuable that they stop needing to buy more. 

Non-consumable IAPs 

Then there are non-consumables, which are one-time purchases that permanently unlock access to something. Think new content, characters, or cosmetic items. These can be highly effective revenue drivers, especially for the highest-priced IAPs. Often, a non-consumable game monetization strategy is tied to gacha systems, which incorporate a degree of randomness so players don’t know the exact reward they’ll get. If a user purchases a champion IAP, for example, a gacha system will ensure there’s an X% chance they’ll get a legendary champion, Y% chance it’s a rare one, and Z% the champion ends up being common. 

Limited-time offers and artificial scarcity are also highly effective approaches for a non-consumable IAP game monetization strategy. By creating a sense of urgency, players have a strong incentive to buy before the offer disappears.

However, there are pitfalls that developers need to watch out for with non-consumables, like content treadmills. These types of IAPs can include a huge range of items, which often requires constantly producing new content - which can get expensive. Aim to design an IAP production process that can scale with your player demand. At the same time, optimize your current production to avoid the need for designing new content too often.

Another danger to keep an eye on is accidentally creating a “pay-to-win” scenario. Many players find fault with games that enable users with lower skill to “buy” their way to victory. That means developers need to strike a balance between making non-consumable IAPs - like a weapon with special abilities or a bonus level with prizes - meaningful to purchase without alienating their broader community and making the game feel unfair.  

For example, FIFA 21 from EA Sports offers FUT packs for purchase that include a set of current and former soccer players. Users can use these packs to build the best team possible, which inevitably impacts gameplay. It’s up to EA Sports to make sure none of these packs individually becomes a secret key to success that lets any one player dominate.

You can address the pay-to-win issue by making your non-consumable purchases more focused on variety. This is a common approach in strategy games, where theorycrafting is core to the gameplay. 

Subscriptions

Subscriptions are traditionally less popular as an IAP game monetization strategy in F2P games - but they’re becoming more common. These purchases are usually made by a game’s most engaged players and provide temporary access to premium content, currency, or bonuses for a recurring fee. As a result, subscriptions can be a reliable source of revenue and are often an effective way of leveraging IAP benefits (both consumable and non-consumable) for ongoing engagement. 

Subscriptions and battle passes typically work alongside a broader IAP strategy by providing an extremely high value for the money they cost, encouraging higher conversion rates. They can also be used as an exclusive offer for a "VIP tier” of players. 

Setting up your IAP strategy

How do you know which IAPs to incorporate in your game? Games generally monetize with a mix of IAPs from each of these categories, depending on their genre. For example, a real-time strategy game like Clash Royale drives almost 27% of its IAP purchase volume from a $4.99 Pouch of Gems. The game also offers skins and cosmetic purchases, which can be made using either gems or real-world currency.

Meanwhile, a casino game like Lightning Link Casino Slots sells packages of coins - its main currency - from $9.99 to $19.99 that players can use as energy to keep spinning so they can earn other rewards. In casino games, it’s all about monetizing engagement: If users want to continue playing instead of waiting until they have enough energy for another spin or bet, they have to pay.

Web stores

A game website that houses a web shop is another excellent game monetization strategy. While IAPs have a middleman that takes a 30% cut - the app stores - web shops are a direct-to-consumer (D2C) channel. The transaction is just between you and the player, meaning more revenue in your pocket.

Why they work for monetization

There are 3 reasons why web shops help boost LTV:

1. By selling directly to users, you’re bypassing the 30%+ commission fee that app stores place on IAPs, meaning you can increase your profit margins per transaction
2. You can do much more on the web that you’re unable to do in-app, like offering volume-based discounts, loyalty programs, and unrestricted pricing - all of which increases spend per user
3. Incorporating non-commerce content (e.g. the lore and race taxonomies of World of Warcraft) can nurture a community around your game - leading to greater engagement and retention (both key components of LTV) 

These advantages have already been proven by major studios like Playtika, Supercell, and Plarium and their D2C strategies. Through these channels, they’ve not only eased their revenue losses post-ATT, but also earned significant profit.

Playtika, for example, generates over 25% of its total revenue from its D2C channels. In particular, its VIP and rewards program is a major source of its D2C success. Loyal users are rewarded with more incentives to keep playing - and spend even more, often through direct channels on the web. They even do off-app promotions and events to keep their highest-value users playing.

Like the Slotomania VIP club, which was treated to a Funtastic Fun Tour. Here, Playtika treated its most loyal players to a series of shows, dinners, surprises, and meet-and-greets with Slotomania employees.

Top tips for building a web shop of your own

Going direct-to-consumer with a web shop is simple. Let’s outline the steps here:

1. Register your domain.
2. Use a fully-outfitted web shop maker that handles the heavy lifting for you, or enlist the help of a web dev team.
3. Integrate a payment processor.
4. Populate with content and incentives, including loyalty programs, discounts, and engagement-focused experiences (e.g. a community forum).
5. Start driving traffic.

Once you have a shop set up, it’s time to optimize for conversions. A few best practices we’ve seen work in action:

• Create loyalty programs
• Provide limited-time offers 
• Give web-only deals and discounts
• Offer free gifts

For an even more in-depth guide into launching your own web shop, check out our article. 

Start putting these game monetization strategies into action

Ready to apply these mobile game monetization strategies to your own game? Stash can help maximize profit, drive loyalty, and boost retention with a D2C web store. Let’s talk about building your web shop.