Mobile game monetization is all about generating revenue from games - whether that’s from ads, in-app purchases, web shops, or a mix of them all. Let’s explore what game monetization means, mobile game monetization models, and a few of our top tips to maximize your revenue.
What are popular mobile game monetization models?
There are tons of technologies and tools to help you monetize. But the real challenge is picking the mobile game monetization model, or set of models, that maximizes revenue per user - all without disrupting their game experience. Here are a few popular ones for free-to-play games:
- In-app purchases: Sell items and subscriptions to players inside your game
- Ad monetization: Implement ads at various points in your game
- Web shops: Sell items to players on a website outside your game
Depending on the genre, game developers may choose to implement a mix of the above mobile game monetization models. For example, hyper-casual games tend to be nearly 100% ad based, while some other games may be a split of about 30% ads, 40% in-app purchases, and 30% web shop.
How to increase mobile game monetization
Each business model we mentioned above comes with its own tips and best practices. But all follow the same principle - always design free-to-play games with monetization in mind and integrate it into the game’s core loop. In other words, mobile game monetization should never be an afterthought. Now, let’s dive into a few tips and tricks for each mobile game monetization model.
In-app purchase monetization
First up, there’s in-app purchases (IAPs) like coins, energy, skins, and characters. Though only 5% of players generally make IAPs, those that do are usually extremely engaged and loyal.
IAPs can serve many different functions - they can help users progress in the game when they’re stuck, complete tasks, or just customize their experience. We can break IAPs down into three categories:
- Consumables: These are temporary purchases that can be depleted, like coins and energy
- Non-consumables: Think skins, cosmetics, characters, and levels
- Subscriptions: These are recurring bundles, like battle passes
Your goal is to make your IAPs appealing enough to sell. To do that, you need to A/B test pricing, discounts, placements, and even the content.
Doing IAPs right hinges on nailing the right price points and knowing when to show prompts for this premium content. It’s a good idea to also offer exclusive, limited-time packages that can get both new and existing players to invest more in their gaming experience. It’s all about building value and incentivizing the purchase.
Ad monetization
Like we mentioned, because only a small percentage of players choose to make in-app purchases, some developers choose to monetize the rest of their user base with ads.
Let’s start by reviewing the main ad units - of which we can split into two groups: system-initiated and user-initiated. They’re exactly what they sound like: system-initiated ads are determined and set by the game developer, like banners and interstitial full screen ads. Meanwhile, user-initiated ads are determined by the user - they’re usually always available for the user to opt into, like rewarded video ads or offerwall ads.
Generally, the best ad mobile game monetization tip is to have a mix of both. Beyond generating revenue, user-initiated ads are great for increasing retention and engagement - because they can progress in the game and earn rewards by interacting with the ad. Rewarded video, in particular, is increasingly used by even traditionally IAP-monetizing games to expand their monetizable user base. However, like in-app purchases, not all users will choose to opt-into engaging with them, which is where system-initiated ads come in. To monetize the rest of your players, you can set when and where to show banners and interstitials.
You never want to disrupt a user’s gameplay with ads. To make sure you’re not negatively impacting engagement and retention, be sure to constantly check in on how ads are affecting in-game metrics. To make sure each type of ad is delivering the best performance without negatively impacting retention, follow these tips:
- A/B test frequency and pacing: You want to carefully choose the right frequency capping (how many times you serve an ad per user session) and pacing (how many seconds between each ad you serve). This largely comes down to your genre’s benchmarks - hyper-casual users are more used to seeing ads and won’t mind shorter pacing and higher frequencies. But strategy users might. Do enough A/B testing to find the sweet spot between revenue and retention before rolling out ads to your entire audience.
- Choose the right placements: Where you place an ad is also critical, and it also largely comes down to genre. Let’s start with interstitials - you can place interstitial ads before a level, after a level, or even in between a level. For IAP heavy games, for example, you only want to show interstitials at the end of users’ sessions. Now for rewarded video, you want to make sure placements are visible and accessible to users. Try a bunch of placements and see which works best - for example, you can offer an extra life after failing, give daily bonuses, or always have a button on the home screen.
- Segment users: Different users have different mobile game monetization behaviors. There’s no reason to show all your users the same type of ads at the same time. For new users, you may choose to limit the system-initiated ads you show. For highly engaged users, you may choose to show more rewarded videos and fewer interstitials. Get the data and make the right decision for each group.
Web shop monetization
While ads are best for monetizing users who don’t make any IAPs, web shops are best for users who make a lot of IAPs. Because web shops require users to leave the game to make a purchase, only highly motivated spenders are usually willing to do so. But shifting those high spenders to a web shop can result in a huge uplift in revenue. That’s because while app stores charge you 30% on every in-app purchase, web shops only charge you 5-10% - meaning for every transaction you save more revenue.
Beyond higher margins, web shops open up more avenues for mobile game monetization. Because the web is a more flexible environment than apps, almost anything is possible - like loyalty programs, volume-based discounts, and dynamic pricing. You can use these features to increase how much players spend and how often, generating more revenue for your game.
Many of the top grossing games are using web shops to increase their game monetization - like Playtika, Huuuge, Scopely, Supercell, Rovio, and more. In fact, web shops account for 25% of Playtika's total revenue and 30% of Plarium's.
Start increasing your game monetization
If you’re ready to see the benefits of a web shop for yourself, reach out to us here at Stash. We’ll help you build a shop and optimize your mobile game monetization strategy in a way that creates a better experience for both you and your players.