The GameAnalytics monetization series:

1. Exploring game monetization: Traditional strategies
2. Exploring innovative game monetization: Alternative approaches
3. Exploring monetization: Maximizing game revenue
4. Exploring monetization: Using data to guide decisions

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Why is revenue data important?

Having access to data is important for optimizing your monetization strategies and ensuring their effectiveness for several reasons:

• Insights into player behavior: By tracking purchase events and other business metrics, game developers can gain deep insights into player behavior. This includes understanding which items or features are most popular, how often players make purchases, and what factors influence buying decisions.
• Performance evaluation: Data allows developers to evaluate the performance of different monetization strategies objectively. They can measure metrics such as conversion rates, average revenue per user (ARPU), and the lifetime value (LTV) of players.
• Optimization and iteration: Armed with data, developers can iterate and optimize their monetization strategies continuously. They can experiment with pricing models, promotions, and in-game offers based on real-time feedback and analytics.
• Personalization: Data-driven insights enable personalized monetization approaches. Developers can segment players based on their spending behavior, engagement patterns, and demographics.
• Forecasting and planning: Data helps to forecast future revenue streams and plan for scalability. By analyzing historical trends and performance metrics, developers can predict revenue projections and plan their monetization strategies accordingly.
• Competitive edge: In the competitive gaming market, data-driven decision-making provides a significant competitive edge.

The GameAnalytics’ monetization features are built with these reasons in mind.

GameAnalytics’ monetization features

To support you and ensure you maximize your revenue data, we’ve enhanced our monetization view into a stand-alone overview with improved features. The most significant update is the integration of Web Shop functionality, enabling you to track revenue directly from your Web Shop.

Note: Currently, GameAnalytics supports tracking of In-App Purchase data for mobile games only.

Let’s take a look at individual features:

Revenue overview and ARPPU

The core feature is the comprehensive revenue view. Positioned prominently at the top of your Monetization Overview, this tool displays your total revenue over time and offers comparisons between iOS, Android, and Web Shop earnings for your game.

This view enables you to address key questions:

• Which platform generates the highest revenue?
• Is revenue consistent or does it fluctuate with peaks and valleys?
• Are there indications of growth on any particular platform?

To uncover and understand your revenue trends, we recommend to:

1. Analyze your user base across each platform. While one platform may dominate in revenue, this could simply be due to having a larger player base on that platform. For instance, if 650 out of 1000 players use Android devices, it’s likely that Android generates the highest revenue. However, this doesn’t necessarily indicate the spending potential of iOS users or those using your Web Shop.
2. Compare revenue generated per platform with the average revenue per paying user (ARPPU). This comparison can show you spending patterns across different platforms. Building on the previous example, while Android may generate more revenue overall due to its larger user base, iOS users might spend twice as much per person. This insight could prompt a strategy shift towards acquiring more iOS users, who potentially have higher spending capabilities
3. If you observe notable changes in your revenue generation, evaluate the events leading up to and during the period of deviation. Consider the following:

• Did you recently release a new game build or introduce fresh content that could influence user spending behavior?
• What was the overall health of your game during this time? Were there any technical issues or bugs that might have impacted player experience and spending?
• Are there recurring patterns in your revenue trends, such as higher generation during paydays or lower revenue towards month-end? Understanding these patterns can help in aligning monetization efforts with peak spending periods and optimizing revenue throughout the month.

Converting users, paying users, and split by items

Other crucial charts to consider include displaying the total number of converting users and paying users.

Who are converting users? Converting users are those who made their first purchase on a specific day, identified by the “converting=true” event filter. These users indicate first engagement with monetization features.

Who are paying users? Paying users encompass all users who made a purchase on a given date, identified by events where “is paying” equals “true.” This metric reflects ongoing engagement with in-game purchases.

Both charts are invaluable as they reveal the likelihood of players making repeated purchases, giving insights into player satisfaction with available content and monetization strategies.

If the number of paying users is higher than the number of converting users, it indicates that players find your purchase items appealing and beneficial to their in-game experience. They appreciate the value of owning premium items and make purchases repeatedly, reflecting a strong monetization strategy.

However, if the number of paying users closely matches or even equals the number of converting users, it signals a need to reassess and optimize your strategy. One effective step is to utilize the ‘Revenue grouped by item’ feature.

This feature categorizes all your revenue by the purchased item, providing insights into which items drive consistent purchases. Items that perform well can be further enhanced or diversified to increase sales, such as offering more skins or rare items within successful categories.

Conversely, if players purchase an item once but don’t return for another purchase, it suggests that the perceived value may not meet expectations. Evaluating different item offerings through A/B testing can help refine and optimize your monetization approach, ensuring that items resonate well with players and drive sustainable revenue growth.

Reviewing the durability of items in your game can also give you an idea of player spending behavior. If players are buying passes or items that offer extended benefits, they may not feel tempted to make frequent additional purchases. To address this, you can consider the following strategies:

• Shorten the duration of passes or items to encourage more frequent purchases.
• Limit the availability of rare or exclusive items within these passes to maintain their value and desirability.
• Increase the price of passes while enhancing their content to justify the higher cost.
• Convert passes into subscription models that automatically renew, providing ongoing value and convenience to players.

First transaction revenue data for in-app purchases

Understanding the First Transaction Revenue chart is also interesting as it uncovers player spending potential within your game. This data reveals how much players are willing and able to invest in in-app purchases the first time around, providing insights that can optimize your pricing strategy and prioritize items effectively.

By analyzing this chart, you can identify the spending thresholds of your player base and strategically place items within these price ranges to maximize conversions. Highlighting items that align with players’ willingness to spend can increase their likelihood of completing purchases, enhancing both player satisfaction and revenue generation.

Generate more revenue by building your own Web Shop

In Part 2 of this series, we highlighted how Web Shops enhance mobile game monetization by facilitating direct sales of in-game items, virtual currency, exclusive content, and subscriptions through a web-based storefront.

Building on this in Part 3, we emphasized the cost-effectiveness of integrating a Web Shop with GameAnalytics, reducing platform fees significantly. If you haven’t yet integrated your Web Shop, our calculator in the Monetization Overview can estimate potential revenue and savings, with Xsolla charging only a 5% fee.

Use the calculator to project your Web Shop revenue by adjusting sliders for estimated revenue and capture rate.

If you are ready to explore this opportunity, simply submit this form to connect with an expert for guidance on Web Shop implementation, no obligations attached.

Now that you understand all the features and tricks to tracking your revenue and optimizing monetization strategies, you are ready to take action. The knowledge of tracking your revenue and the data will help you to make informed decisions, refine your monetization efforts, and ultimately maximize your game’s profitability. The last step is to go ahead and connect your business events to GameAnalytics, accessing all the insights you need to drive your game’s success.

The GameAnalytics monetization series:

1. Exploring game monetization: Traditional strategies
2. Exploring innovative game monetization: Alternative approaches
3. Exploring monetization: Maximizing game revenue
4. Exploring monetization: Using data to guide decisions

________________

In our exploration through Part 1 and Part 2, we established the two primary monetization models: freemium and premium games, including numerous examples of monetization strategies. While much attention and effort is often directed towards monetization within free-to-play games, premium games also offer revenue generation opportunities.

Regardless of which model your game aligns with, the core principles of successful monetization remain the same – prioritizing player satisfaction while maximizing revenue potential.

Successful game monetization strategies

To ensure that you’re effectively implementing and managing your monetization efforts, several approaches can be taken:

1. Tracking revenue and player behavior

Tracking revenue and player behavior involves collecting and analyzing data related to in-game transactions, player interactions, and engagement metrics.

By leveraging data through GameAnalytics, developers gain insight into players’ spending habits, preferences, and behaviors. This data can then be used to optimize monetization strategies, tailor content offerings to meet player needs, and identify opportunities for revenue growth.

For example, tracking which in-game items or features are most popular among players can inform decisions about pricing, promotions, and content updates. Additionally, analyzing player retention and churn rates can help identify areas for improvement in the overall player experience, ultimately leading to increased monetization opportunities.

All-in-all, data is key to success.

Note: The last part of this series, focused on how to use GameAnalytics’ Monetization Overview will be released next Thursday. In the meantime, please make sure your business events are connected to GameAnalytics.

2. Cost-effectiveness of monetization solutions

When evaluating monetization solutions, it’s important to consider not only the potential revenue they can generate but also the costs associated with implementing and maintaining them.

For example, while in-app purchases may offer significant revenue potential, they may also require ongoing development resources to create and update content, as well as marketing expenses to promote them effectively.

On the other hand, advertising-based monetization models may have lower upfront costs but typically require a large player base to generate substantial revenue.

To ensure cost-effectiveness, developers should carefully assess the return on investment (ROI) of each monetization solution, taking into account factors such as development time, resources required, and potential revenue generation.

Reduce store commissions with custom Web Shops

Platform fees are another critical aspect to consider. These fees can impact your game’s profitability, as some platforms can charge up to 35% percent of revenue earned through their services.

Luckily, there are solutions that can help to mitigate these fees by conducting transactions directly through your own storefronts – reducing reliance on third-party platforms and retaining a larger portion of generated revenue.

The best and most popular solution particularly for mobile games are Xsolla’s Web Shops – a Direct to Consumer (D2C) store that enhance a game’s LiveOps using promotion, retention, and engagement mechanics to monetize players in the most personalized way possible.

Additionally, Web Shop solutions not only help you preserve more revenue (Xsolla only charges you a small fee of 5%), but they also help you increase your reach of paying players by expanding into new markets and accepting payments in over 700 currencies. They’re available to developers, studios and publishers as a trusted partner to guide through this innovative strategy.

This approach eases the burden of store commissions while offering greater flexibility and control over monetization efforts, enabling developers to optimize revenue streams more effectively.

3. Marketing efforts beyond user acquisition

While user acquisition is an essential component of any marketing strategy, developers should also consider other marketing initiatives to promote purchasable content and drive revenue.

This could include targeted advertising campaigns, social media engagement, influencer partnerships, and community events. For example, hosting in-game events or tournaments can generate excitement among players and encourage them to make purchases to participate or unlock exclusive rewards.

Also, leveraging social media platforms to showcase new content updates, promotions, or special offers can help drive player engagement and increase revenue opportunities.

Cross-promotion and partnerships

Collaborating with other developers or brands to cross-promote each other’s games or products can expand your reach and drive revenue. By tapping into each other’s audiences and marketing channels, developers can increase visibility and attract new players who may be interested in purchasing additional content or features.

4. Continuous updates with personalized offers

Regularly updating your game with new content, features, and events will keep players engaged and encourage them to spend more. Offering limited-time promotions, seasonal events, or other exclusive rewards for loyal players can create a sense of urgency and generate revenue.

As we mentioned earlier, data and analytics will be your best friends in creating personalized offers or adjusting pricing. By segmenting players based on their behavior, preferences, and spending habits, your offers will better match individual player needs and interests, leading to increased revenue.

Earlier in this article, we mentioned Xsolla Web Shops as a great cost-effective monetization solution. These stores can be highly customizable, offering players the best content personalized to them – helping to create a quality player experience.

5. Explore incentivized actions

Offering incentives for players to take specific actions within the game, such as watching ads, completing surveys, or inviting friends, is a good way to increase your ad revenue.

By rewarding players with in-game currency, items, or bonuses for engaging with advertisements or participating in promotional activities, you can generate additional revenue streams without disrupting the player experience.

6. Gamification of monetization

Incorporating gamification elements into your monetization strategy, such as loyalty programs, achievement systems, or progression rewards, can encourage players to spend more, increase engagement and improve retention.

Rewarding players for their loyalty, progress, or achievements with exclusive benefits or bonuses, can foster a sense of investment in the game and encourage continued spending over time.

7. Revenue allocation strategies

Careful allocation of revenue is critical to sustaining long-term profitability and continuous growth. When it comes to managing and allocating your newly gained revenue, we recommend you prioritize investments that contribute to enhancing the overall player experience and driving more growth (and therefore more revenue).

This could include investing in game development to create new content, features, or updates that add value for players and encourage spending. Also, allocating resources to marketing efforts can help attract new players, while retaining existing ones. Generally, the more players, the higher the possibility of a successful purchase.

Finally, investing in player engagement initiatives such as customer support, community management, and live events can help foster a loyal player base and drive long-term revenue growth. By strategically allocating revenue across these areas, developers can maximize the return on investment and ensure the ongoing success of their games.

Compare, analyze and optimize your revenue with GameAnalytics

Taking guesses isn’t the best way to boost your monetization and keep your games making money. With GameAnalytics, you can track your IAP (in-app purchase) and WebShop revenue to get a clear picture of how your players spend and improve your strategies. Head over to our tool or click to learn more about maximizing your game’s revenue and using data to make smart decisions.

The GameAnalytics monetization series:

1. Exploring game monetization: Traditional strategies
2. Exploring innovative game monetization: Alternative approaches
3. Exploring monetization: Maximizing game revenue
4. Exploring monetization: Using data to guide decisions

________________

Last week we explored traditional monetization strategies commonly employed in the gaming industry, focusing on freemium and premium models. We outlined various methods such as in-app purchases, advertising, and limitation removal, highlighting their implementation and impact on player experiences.

However, it is not a secret that our industry is constantly changing as player preferences and market trends are shifting over time. What worked once will not necessarily work the second time, and a strategy that uplifted one game could be detrimental to another. This is why Game Developers, Growth Managers and Game Designers should be aware of as many innovative monetization solutions as possible. Beyond revenue generation, these alternatives offer resource-efficient options and the flexibility to tailor strategies that enhance player experiences in ways traditional methods can’t.

Alternative monetization strategies

Traditional strategies may not always be suitable for every game or audience, as player demographics and gaming habits vary widely. Alternative strategies, on the other hand, offer customization options to cater to diverse player needs and preferences. Through creativity and experimentation, developers can differentiate their games and create unique experiences that resonate better with their players.

These are some of the alternative monetization strategies:

1. Web Shops
2. Digital subscriptions and memberships
3. Merchandising and licensing
4. Sponsorships
5. Live streaming and donations
6. NFT and blockchain
7. Events and experiences

1. Web Shops

Web Shops are the perfect addition to mobile game monetization strategies. Revenue is generated from purchases made through the web-based storefront. This includes various monetization strategies such as selling in-game items, virtual currency, exclusive content, and subscriptions directly to players as part of a direct-to-consumer (D2C) strategy.

What this means in practice is that mobile players are invited to a browser-based store, where they proceed with their purchases just as they would in your app. However, this solution offers a more personalized shopping experience, that reflects players’ needs to progress within the game.

Web Shop also expands a game’s LiveOps capabilities with wide-range of web-based LiveOps tools that increase players’ LTV, Retention and Engagement across all platforms.

The goal of implementing a Web Shop is to maximize revenue opportunities and enhance the overall LiveOps monetization strategy for mobile games.

2. Digital subscriptions and memberships

Subscriptions are commonly used on mobile platforms, particularly iOS and Android, where users can subscribe to access premium features, receive content updates, or enjoy exclusive perks on a recurring basis. Examples of games using subscriptions include Clash of Clans by Supercell, which offers a monthly Gold Pass subscription for additional in-game rewards and perks. Also, platforms like Roblox offer premium memberships that grant players additional Robux currency and exclusive items.

Note: Subscription in-game monetization can also refer to monetization model that maintain player’s access to a game base on recurring fee.

3. Merchandising and licensing

Merchandising involves selling physical merchandise such as clothing, accessories, or collectibles featuring game branding and artwork. This strategy is commonly used across various genres, with examples like “Fortnite” by Epic Games offering a wide range of merchandise, including apparel, toys, and accessories.

A related strategy is licensing game assets, characters, or intellectual property for use in merchandise, spin-off games, or other media formats. Games like Minecraft by Mojang Studios license their characters and branding for various merchandise, toys, and media projects.

4. Sponsorships

Game developers can partner with brands or companies for sponsorships, integrating product placements, branded content, or sponsored events within the game. This strategy can be found in mobile games like Pokémon GO by Niantic, which collaborates with various brands for in-game events and promotions.

5. Live streaming and donations

Live streaming platforms offer opportunities for game developers to monetize content through ads, subscriptions, donations, or sponsorships. Games such as League of Legends by Riot Games are popular choices for live streaming, with streamers earning revenue through subscriptions and donations from viewers. Game developers who feel comfortable in front of the camera can also venture onto platforms like Twitch or YouTube and receive donations from their viewers during live streams and gameplay sessions.

6. NFTs and blockchain

Exploring opportunities in non-fungible tokens (NFTs) and blockchain technology allows developers to create digital collectibles, in-game assets, or player-owned economies. In the last few years, we’ve seen a lot of Web3 games come out. Sky Mavis released Axie Infinity, Nplus Entertainment has League Of Kingdoms, Bright Star Studios made Ember Sword. The idea of owning your digital assets is clearly quite important. In fact, Web3 gaming accounts for almost half of all blockchain activity. We explored this trend and took a look at Zynga’s Sugertown here.

7. Events and experiences

Hosting virtual or real-world events, conventions, or meet-ups for fans to engage with developers, participate in tournaments, or purchase exclusive merchandise is a strategy used by many major games across all platforms. Games like World of Warcraft by Blizzard Entertainment host in-game events and real-world conventions like BlizzCon for their community.

These are just a few examples of popular and innovative monetization strategies. However, the potential for creativity and innovation knows no bounds. Game developers are continually exploring new avenues to generate revenue and enhance player experiences, leading to a diverse range of monetization approaches across the industry. If you are curious to learn more, you can venture into exploring in-game events, digital collectibles, influencer partnerships, or virtual real estate, to name a few more.

Compare, analyze and optimize your revenue with GameAnalytics

Taking guesses isn’t the best way to boost your monetization and keep your games making money. With GameAnalytics, you can track your IAP (in-app purchase) and WebShop revenue to get a clear picture of how your players spend and improve your strategies. Head over to our tool or click to learn more about maximizing your game’s revenue and using data to make smart decisions.

The GameAnalytics monetization series:

1. Exploring game monetization: Traditional strategies
2. Exploring innovative game monetization: Alternative approaches
3. Exploring monetization: Maximizing game revenue
4. Exploring monetization: Using data to guide decisions

________________

Decades ago, you’d place your game with a price tag on a shelf and hope for the best. However, with everything moving into the digital world, there are plenty of ways to earn from your game. Do you charge players upfront, or opt for the freebie route and make money from ads and in-app purchases? It could be a bit of a maze out there, but we’re here to guide you through the world of game monetization.

Why should you monetize your game?

Before exploring typical approaches, let’s take a moment to remember why we monetize our games in the first place. Understanding the purpose behind monetization is important as it guides our approach to implementing these strategies effectively.

• Sustainability: Generating revenue is essential for sustaining business operations, funding ongoing development efforts, and ensuring the longevity of your games. Without monetization, you may struggle to cover the costs associated with game development and maintenance.
• Investment in player experience: Sufficient funds allow you to invest in the quality of your games, including hiring talented developers, artists, and designers, as well as implementing advanced technologies and features. All-in-all, you will be able to create richer, more immersive gaming experiences that engage your players, ensuring their retention.
• Innovation: Having resources is often an incentive to explore new ideas, experiment with different gameplay mechanics, and push the boundaries of your game. Such innovation is attractive to both developers and players alike, supporting the culture of your studio as well as player satisfaction and engagement.
• Support for free-to-play models: Monetization is particularly important for free-to-play games, which rely on revenue streams such as in-app purchases, advertising, and subscriptions. These games offer a low barrier to entry for players, making them accessible to a wider audience. However, they still need to generate revenue to remain viable.

Clearly, monetization affects more than just the revenue you generate. It increases flexibility and scalability, boosting player engagement, and removing barriers to entry.

Through monetization, you can also support ongoing content updates, personalize revenue generation, build a sense of community, and use data to optimize your game development, monetization, and marketing strategies.” – Nicholas Lim, Founder and CEO of Sonamine

Gaming monetization models

The traditional strategies revolve around two primary models: freemium and premium.

What is a freemium game?

Freemium games, usually free to download, entice players with various ways to generate revenue. The income can be derived from in-game advertising, microtransactions (such as individual purchases, loot boxes, or gacha), downloadable content (DLC), or tiered extras like season passes or battle passes.

Many gaming studios combine two or more of these models to maximize profits. These combined models are prevalent in free-to-play (F2P) games – where players are enticed to make purchases for enhancements such as extra lives, virtual currency, customized avatars, ad-free experiences, or extended playing time.

Players who choose not to spend money might experience in-game ads, encounter timers, bump into limited customization options, or have restricted access to content. Note that some companies have faced criticism for implementing aggressive pay-to-win (P2W) strategies, where players must make purchases to progress or compete effectively in the game.

What is a premium game?

Premium games require an upfront payment for full access. Once purchased, players typically have unrestricted access to all content and features without the need for additional in-game purchases. However, some premium games may offer additional downloadable content (DLC) or expansion packs for an extra fee – providing players with new levels, characters, or storylines to enhance their gaming experience. Additionally, premium games can also offer optional cosmetic microtransactions, allowing players to customize their characters or avatars with virtual items or skins for a small fee.

Monetization strategies

Now that we’ve covered the basics of the two primary monetization models, let’s dive into the typical strategies used within these models. The extent of these strategies vary depending on whether the game follows a freemium or premium model, but they all aim to maximize revenue while providing value to players.

Monetization strategies for game publishers:

1. Advertising
   • Banner ads
   • Interstitials between levels
   • Video ads
   • Offerwalls
   • Branded experiences
2. In-app purchases
   • Premium version
   • Level packs
   • Battlepasses
   • Extra resources and skins
3. Limitation removal
   • Remove ads
   • More energy, time, etc.
4. Vouchers and wallet payments

1. Advertising

Advertising is a very common and popular monetization method used in various types of games across all platforms, including mobile, PC, console, and even web-based games. Game developers integrate ads into their games to generate revenue by displaying promotional content to players during gameplay. Here are some of the examples:

Banner ads: Banner ads are small advertisements that appear at the top or bottom of the screen while players are engaged in gameplay. These ads are typically static or animated images and can be non-intrusive, allowing players to continue playing while still being exposed to the advertisement.

Interstitials between levels: Interstitial ads are full-screen advertisements that appear between levels or during natural breaks in gameplay. These ads often include interactive elements or video content and provide an opportunity for players to engage with the advertisement before continuing with the game.

Video ads: Video ads are short promotional videos that players watch in exchange for in-game rewards or currency. These ads can range from a few seconds to several minutes in length and may include pre-roll, mid-roll, or post-roll placements within the game.

Offerwalls: Offerwalls are interactive interfaces within the game that allow players to earn in-game rewards or currency by completing tasks or engaging with third-party advertisements and offers. These tasks may include downloading and installing apps, signing up for services, or completing surveys.

Branded experiences: Branded experiences involve integrating sponsored content or branded elements into the game to create immersive advertising experiences for players. This may include in-game events, challenges, or virtual items sponsored by external brands or companies.

2. In-app purchases

In-app purchases are a prevalent monetization method employed across various gaming platforms, including mobile, PC, and console. This approach allows developers to offer additional content, features, or virtual goods to players within the game, enhancing the overall gaming experience. Here’s a breakdown of some in-app purchase strategies and their usage across platforms:

Premium version: This model is commonly used across mobile and PC platforms, where players can purchase a premium version of the game to unlock exclusive content or features not available in the free version. While mobile games often offer a free base game with optional premium upgrades, PC games may release a deluxe or collector’s edition with additional content at a higher price point.

Level packs: Level packs are popular across all platforms and are often used to extend the lifespan of a game by offering additional levels, challenges, or gameplay experiences. Players can purchase these packs to access new content and expand their gaming experience. This strategy is particularly common in mobile games and downloadable content (DLC) for PC and console titles.

Battlepasses: Battlepasses are frequently implemented in multiplayer games across all platforms, offering players a progression system with rewards, challenges, and exclusive content over a set period. While mobile and PC games often feature battlepasses as part of their free-to-play model, console titles may offer similar season pass options for additional content updates.

Extra resources and skins: The sale of extra resources and skins allows players to purchase in-game currency, power-ups, or cosmetic items to enhance their gameplay experience. While the availability of these items may vary depending on the platform and game, the concept of offering optional purchases for virtual goods remains consistent across platforms.

“Some mobile genres generate a bigger share of their revenue via purchases than others: engagement-intense genres like strategy or RPG (as well as casino games that are based on player transactions) see most of their revenue from in-app purchases. In contrast, more than 94% of hypercasual gaming app revenues were via in-app revenue. Compared to other app categories, mobile gaming apps had the largest share of free-to-download apps with in-app purchases.” – Statista, 2024

3. Limitation removals

Limitation removal is a monetization approach commonly used in mobile games, where players can opt to remove certain restrictions or limitations within the game by making a purchase. The two common limitation removal strategies include:

Remove ads: This strategy allows players to eliminate intrusive advertisements from the game by purchasing an ad-free experience. This feature is typically found in mobile games, but may also be available in browser-based or PC titles.

More energy, time, etc.: Another limitation removal strategy involves allowing players to purchase additional energy, time, or other resources to bypass waiting periods or restrictions within the game. For example, players may be able to purchase extra lives, energy points, or time-based boosts to progress through levels more quickly or access premium content without having to wait for cooldowns or recharge timers.

4. Vouchers and wallet payments

The use of vouchers and wallet payments addresses barriers to traditional payment methods such as credit cards (due to fx. age restrictions or regional-related payment methods).

Vouchers are digital codes or coupons that players can redeem within the game to unlock special rewards, discounts, or in-game currency. These vouchers may be distributed through various channels, such as promotional events, partnerships with other brands, or in-game achievements.

Wallet payments enable players to store funds or virtual currency within their game accounts, allowing for quick and convenient purchases without the need for repeated credit card transactions. Players can preload their accounts with a certain amount of virtual currency or link their accounts to digital payment platforms such as PayPal, Google Pay, or Apple Pay.

As we wrap up our exploration of traditional monetization strategies, it’s important to acknowledge that the gaming revenue landscape is vast and always changing. While we’ve covered the basics, there are plenty more ways to make money from your games just waiting to be discovered.

Compare, analyze and optimize your revenue with GameAnalytics

Taking guesses isn’t the best way to boost your monetization and keep your games making money. With GameAnalytics, you can track your IAP (in-app purchase) and WebShop revenue to get a clear picture of how your players spend and improve your strategies. Head over to our tool or click to learn more about maximizing your game’s revenue and using data to make smart decisions.

By removing platform-imposed roadblocks, you can define your own path when distributing your game in-store and out-of-store.

Xsolla continues to lead the way in helping all our partners generate more profits for their mobile games with Xsolla products and solutions such as Web Shop, Payments SDK, and others to match mobile game developers’ needs. In 2023, we powered over 150 video games’ Web Shops that help our partners accelerate revenue by monetizing beyond the app store.

Knowledge is power. Xsolla can help you reach out to users by proactively adjusting your strategy to address, navigate, and comply with these changes. This blog post breaks down the market shifts, future caveats, and emerging benefits affecting you and game companies worldwide.

What to expect in 2024?

Beyond Epic’s initial litigation, the looming DMA’s compliance enforcement and related global rulings have pressured Apple, Google, and other platforms to start allowing alternative billing and respond to legal actions.

Alternative billing or third-party billing allows the game developer to add a payment solution different from Apple’s and Google’s built-in payments.

Despite Google being more flexible than Apple, it still requires game developers to return 27% of their earnings. Meanwhile, Google has already begun piloting alternative billing in many countries worldwide (European Economic Area, Australia, Brazil, India, Indonesia, Japan, South Africa, South Korea, and the United States,) allowing developers to incorporate third-party payment platforms.

Developers on Google Play can now offer consumers a “user choice” within the same app to select between Google Play Billing and alternative billing in pilot markets.

Apple filed a legal challenge to the EU’s DMA in November 2023. Nevertheless, Apple has acknowledged the upcoming changes with the recent press release published on January 25  announcing several updates to App Store policies.

Apple is now offering developers a choice of either keeping the existing business terms of a 30% fee or moving to the new business terms announced in the press release. 

Regarding the new reduced rate: Developers must consider if the 0.50 EUR Core Technology Fee annually will positively or negatively impact their business model. Even when combined with a reduced commission, this fee introduces uncertainty. There might be a scenario where a developer experiences an influx of low-quality traffic from user acquisition campaigns that fail to monetize effectively, yet they are obligated to pay the $0.50 fee.

Alternatively — and of particular concern — if Apple alters its infrastructure (as it did in response to IDFA), it may threaten developers’ business models and still require the $0.50 fee for each user acquired in the previous year. This scenario is particularly concerning for publishers releasing free apps — e.g., for community features. On the other hand, accepting new business terms also means that developers can use alternative billing in-app, choose side-loading, and opt for a link-out option.

Unlike Google, Apple requires developers to choose either Apple’s billing system or alternative billing. In the case of alternative billing, developers will have to pay Apple a 10% (or 17%) commission, a CTF, and an additional payment to an alternative billing provider.

Apple’s policies on side-loading state that side app downloads can only occur from alternative marketplaces. In Apple’s terminology, “alternative marketplaces” are the app stores developers must build. To be compliant, app stores will go through a separate entitlement process. Apps will only be available for download on the developer’s official website via Safari (or other browsers) once they implement support for app marketplace download. App downloads directly from the web will not be allowed.

Finally, while link-out options facilitate communication with gamers in-app, Apple requires redevelopers to pay the same commissions on transactions for purchases made after following the link.

Third-party billing: a national example

If Apple’s convoluted reaction to DMA in Europe is a surprise, it shouldn’t be. Look at South Korea’s ongoing dispute about implementing a government-enforced resolution to open App Stores. A pattern has emerged where Apple will implement per-country resolutions uniquely adapted to each local landscape, resulting in similar complexity in other countries and making a strong case for direct-to-consumer relations with players.

Korea’s video game industry monetization and payments have changed significantly, allowing new payment systems (mostly digital wallets) to compete with traditional channels like local credit cards and prepaid cards. A few years ago, paying online without Internet Explorer and plugins installed on a consumer’s computer was impossible.

Still, with so many advances in Korea’s ecommerce and mobile transactions space, third-party billing options have only recently opened for developers focused on Korea’s gaming market.

• Under South Korea’s recent Telecommunications Business Act amendment, developers now have the option to implement pre-approved third-party payment solutions within their games on app stores in South Korea.
• Commission fees: Developers utilizing third-party payments in South Korea are subject to a 26% commission on generated revenue, aligning with Apple’s revised App Store policies.
• Technical integration: Implementing third-party payments requires specific technical steps. Developers must activate the StoreKit External Purchase Entitlement within Xcode, integrate designated StoreKit APIs, and submit a separate app binary specifically for South Korea’s App Store.
• Market specificity: This option is exclusive to South Korea’s App Store. Developers with global distribution plans must maintain separate builds for South Korea’s market if they implement third-party payments in that region.

Direct-to-Consumer: A timely approach to game commerce

The best method for succeeding in the current gaming market is to launch a bespoke, frictionless web-based commerce destination with exclusive player offers and rewards. A web shop lets players purchase in-game items and currencies and top up their accounts from a game-branded, developer-controlled website.

With Xsolla Web Shop, an effective direct-to-consumer solution, you can reduce commission expenses to 5% + processing fee and increase a game’s incremental revenue by 20% and more.

Add payments SDK

You can accept hundreds of new local payment methods via Xsolla Payments SDK. With this method, you can monetize underserved audiences in new regions, adding to increased revenue. However, the platform’s share portion depends on the platform rules and can be as high as 27%.

Alternative billing with Xsolla Payments SDK enables you to become the first to monetize players in regions where platforms are behind innovative local payment methods.

Choose side-loading

The power of Xsolla Pay Station SDK lets you launch a mobile version of your game for out-of-store distribution and create new business models that would be impossible in-store. As a result of the recent Google vs Epic ruling, we anticipate side-loading apps for end-users will become simpler on Android. For developers complying with Apple’s policies for side-loading, Xsolla Pay Station SDK will also be available out of the box.

Xsolla Web Shop features

Web Shop is a time-proven, direct-to-consumer method of empowering players and the game’s community to decide and vote on what’s best for them. Users enjoy a smooth experience from their first visit — login to purchase.

• Seamless authorization and a simplified purchase flow;
• Reduced friction for purchases made outside mobile;
• No login required – automated user ID when they enter the shop;
• Authorization by player ID, bound social media account, email, or login and password;

Creates personal offers exclusive to TOP players;Your web shop is a familiar destination where players can purchase in-game items and currencies and top up their accounts — all from a game-branded website that you customize for your audience.

• Tie VIP offers —priced above $500— to huge in-game advantages;
• Allow targeted offers to attract players and cohorts with a catalog customized to user needs;
• Present high-value, web shop-exclusive content (e.g., gifts, bundles;)
• Use time-limited offers and bundles in connection with valuable promotions;
• Augment web shop purchases with rewards that players can only spend on your game’s web shop items and offers;
• Connect new offers to launches and in-game events.

Web Shop benefits

• Leverages added-value content to communicate hyper-clear value to consumers;
• Enhances engagement by tying in-game events directly to web shop content;
• Creates unique, time-limited web shop bundles dedicated to events or holidays;
• Brings users back to your web shop with daily or weekly gifts that increase engagement;
• Promotes increased LTV and ARPU with exclusive VIP packs designed to monetize whales;
• Motivates players to make a first purchase;
• Relevant, targeted offers and rewards increase revenue and LTV;
• Capitalizes on game personalization by creating new rules based on user attributes.

Web Shop success story

Xsolla Web Shop is a white-label solution where each game’s web store has a unique identity, target audience, and business goals. Metrics that define each shop’s success will vary from one store to the next. This Xsolla partners’ success story offers valuable insights into the prospective health and performance of a well-planned web shop business.

A popular RPG strategy game implemented Xsolla Web Shop for its e-commerce strategy. It successfully applied a web-shop-exclusive currency pack mechanic by promoting a bonus for purchasing hard currency. The reward, which is an additional amount of hard cash, increases in proportion to the value of the purchase.

This incentive has been particularly effective, with over 50% of web shop revenue generated from packs priced above $100.

Get started on tomorrow’s success

The Digital Markets Act presents a unique opportunity for you to re-evaluate your distribution model, take advantage of direct-to-consumer opportunities, and chart a path to lower commissions, more revenue, and a smoother ecommerce experience for your players.

Xsolla is a trusted partner in building a future-proofed business model alongside video game developers. Join forces with our proven expertise and gain access to the tools and infrastructure you need to establish a vibrant direct-to-consumer ecosystem. We empower you with flexible, tailored solutions for establishing a powerful direct-to-consumer sales presence.

Schedule a consultation with Xsolla’s experienced team to discuss your specific needs and unlock new avenues for growth.

This article was originally published on the Xsolla’s blog.

“Xsolla anticipated this seismic shift earlier this year, when we launched multiple products that are being actively used by some of the world’s largest game companies to increase profit and build closer relationships with their mobile and pc players. We’ve now combined these products and learnings into an elegant new solution called Xsolla Web Shop for Mobile Games,” said Chris Hewish, President of Xsolla.

Through Xsolla Web Shop for Mobile Games, developers can expect significant revenue growth and can reach new players in new geographies previously unavailable to them. This solution solves many challenges developers face; such as discoverability, declining profit margins, lack of control over the user experience, access to localized payment methods, cross game marketing, more efficient user acquisition, effective collaboration with creators and influencers, and much more.

Three industry-changing announcements make this opportunity more timely than ever:

1. The Epic v Apple ruling allows App Store developers to direct users to other payment systems, effectively bypassing the 30% cut of in-app payments that Apple takes.

2. Apple announced a willingness to allow the use of alternative payments methods outside the App Store.

3. South Korea approved the first law in the world requiring Apple and Google to open their platforms to alternative payment systems.

Combined with the fact that both Apple and Google explicitly state that cross-platform games can sell IAPs outside of mobile apps, it becomes clear that developers stand ready to unlock their full global revenue potential, increase profit margins and build stronger relationships with their players.

Yoshio Osaki, President and CEO of IDG Consulting, said in a statement to Xsolla, “Although it is still early days on determining the level of potential impact from Apple’s decision, this represents a positive incremental first step in expanding consumer choice, as well as increased flexibility in monetization and business models for developers who sorely need it. We believe this is a net positive for the industry, but execution and implementation on the part of both Apple and developers will be key.”‍

Game Commerce Expertise You Can Trust

With a robust and powerful set of tools and services, Xsolla has helped video game developers and publishers market, sell, connect and optimize their games globally for over 16 years, carefully studying the changing tides of the games industry to position partners for continued success.

In 2020, digital and mobile wallets accounted for roughly 45% of global ecommerce payment transactions, making the digital wallet the most popular payment method worldwide. This number is estimated to increase to over 60% in 2025. Consumers are more likely to pay with mobile wallets in countries like Malaysia and India, and other geographies where credit cards are not the primary payment method. By plugging in the Xsolla Web Shop solution, developers instantly access more than 700 payment methods, including the most popular ones in Southeast Asia.

“Through Xsolla Web Shop, we are helping game developers think about and scale their games across multiple platforms to expand their business into new markets and to grow their audience,” said Anton Zelenin, Head of Game Commerce at Xsolla. “The opportunities are even greater, and we’ve seen amazing success stories from partners who have integrated this solution.”

How Does Xsolla Web Shop Help Game Publishers?

This unique mix of select Xsolla tools and services allows users to add virtual currencies and virtual items to their accounts using their preferred local currency and payment method complete with multilingual display support. In addition, the solution gives developers the tools to extend the life of their mobile and even PC games beyond app stores and other platforms.

But Xsolla Web Shop is much more than simply selling IAPs via a branded location that you control. This solution includes a wealth of benefits for developers and publishers from all over the world, including:

• Savings on platform fees. Xsolla only charges 5% plus channel processing fees, allowing you to generate higher profit and save up to 20% per transaction.
• Access new regions and unlock more revenue. Reach players in 250+ countries and allow them to pay using their preferred local method of payment with access to Xsolla’s 700+ payment systems, and players who use familiar payment methods will spend more.
• Higher retention. Increase retention of local players in specific countries and regions like Southeast Asia and Latin America, where credit cards are not the preferred payment method.
• Top up online. Add a top up capability that allows your players to add virtual goods such as currencies and items. They can also upgrade, downgrade, and manage their subscriptions across platforms.
• Easy-to-start FastTrack Integration. Utilize API calls to import your item catalog to Xsolla so you can start selling right away.‍
  Support your complete catalog of games. Unlock growth opportunities for multiple games with a single online experience, and enable game purchases online after porting your mobile game(s) to the web.
• Reduce risk. Eliminate the headaches of local taxes, VAT, and other fees as well as compliance with COPPA, GDPR, and other regulations with Xsolla handling everything as the merchant of record (MoR) for developers and publishers.‍
  Manage fraud. Conduct business securely with a best-in-class anti-fraud system tailored for the games industry, which can effectively block 99% of fraudulent behaviors.‍
• Understand player behavior. Data ownership and insight into player preferences will allow you to conduct more effective marketing campaigns aimed at reaching new players and giving current players what they want in your game. ‍
• Built-in influencer marketing. Create performance-based influencer campaigns to promote your web shop to new users with revenue share and coupon/cashback opportunities for players via creator tags and content drops.‍
• Better user acquisition. Control the UA process with ecommerce campaigns that feature improved discoverability on a global scale.‍
• Your custom brand experience. Create a customized, branded experience for your game and players rather than being controlled, managed, and limited only to what the app stores provide.‍
• Physical goods. Create an ecommerce experience to market and sell branded merchandise to your fans.
• Gift purchases and promotions. Increase average user revenue via marketing channels with gift purchases for friends and family, custom bundles, sales, bonus and cashback coupons, upgrades, and more.

The future of mobile games is exciting. There are many opportunities to unlock new revenue and expand your audience through a custom, multi-platform experience that caters to players’ needs and wants. With the proposed changes to the App Store and shifting tides across the in-app purchase landscape, Xsolla sees the possibility to turn this shared momentum into game business growth for its existing and prospective partners.

For more information about how to accelerate your mobile game visit Xsolla Web Shop for Mobile Games.

This article was originally published at the Xsolla blog.

What is Web Shop for mobile games?

As a mobile game developer looking to expand, you need a global monetization solution that successfully operates in multiple regions worldwide and offers payment methods your players find familiar and are comfortable using.

That’s exactly what Xsolla Web Shop does. Web Shop for Mobile Games is a highly customizable, long-term solution that allows you to create your own shop, on your own website. Using the Web Shop, you can reach more players, earn more revenue and grow your mobile games worldwide. It lets you do everything the app stores do and more, for only 5%.

How can Web Shop help you do all that?

Web Shop helps you acquire new players and drive existing gamers to your own, branded website. You are essentially creating a white-label payment experience for your players and increasing your brand loyalty at the same time:

• You can connect and communicate directly to your community via updates on your site, an email list, newsletters, social media handles, a Discord server, and more.
• You can set up reward systems for your loyal players and keep users returning to your shop for easy-to-use transactions like purchases and subscriptions.
• You can utilize FastTrack integration, and Catalog Import features to start selling your in-game items and currencies right away. Plus, with the built-in Pay Station integration, you can let your customers pay with more payment methods that they know, trust, and prefer to use.

And did we mention it’s all available for only a 5% fee?

Launch your Web Shop

Okay, now that you know why you should launch your own Web Shop for Mobile Games, how do you do it? It’s a lot easier than you might think. We’ll walk you through the simple integration steps so you can get up and running on your own in no time.

It all starts with your Xsolla Publisher Account, an easy-to-use, all-in-one control center that lets you set up and manage every Xsolla product you need to optimize and monetize your games. Just log in and follow the steps below, or try out Xsolla’s simple demo.

Step 1: Set up your project

If you’re an existing Xsolla Partner, log in to your Publisher Account and go to your project. If you’re new to Xsolla, simply register for an account, and fill in the required details for your project.

Step 2: Create a Web Shop landing page

On the left-hand navigation menu, head to Site Builder, click Create site and choose the Web Shop Page template and enter the link to your app from the App Store or Google Play. You’ll see a pre-created page with assets imported from your game page.

Step 3: Import your catalog or add items manually

In your Store block, click Set up purchases in Store in the navigation menu. Scroll down to Catalog management, and click Configure. On the Catalog management page, under Connectors, click Configure. On the Connectors page, select the platform you want to import from, and click Configure. Make sure the Show in Store toggle is set to on. You can also import items via API.

Alternatively, you can set this up manually. In Site Builder, click Add block and choose Store as the type. From the Select purchase type pull-down in the navigation menu, select Virtual currency (packages), and then click Create virtual currency. Fill in all required fields and create a currency and a currency package.

Step 4: Review your page Go back to the Site Builder and open your page to view it. The currency package you create should be displayed on the landing page.

Step 5: Choose the authorization flow Use Webhooks for Player ID authorization or JSON Web Token (JWT) for Server authorization.

Webhooks: Webhooks let you add items to a specific account in your game. Go to Project Settings > Webhooks. Switch the toggle to ON.

JWT: Follow these instructions to implement user registration and authentication via a platform.

Step 6: Sign Licensing Agreement and launch your page Access and sign the Licensing Agreement with an Owner or Accounting role, and publish your page. Your web shop is set up and ready to use, and you can start selling in-game items, currencies, subscriptions, and more right away for only 5% per transaction.

Step 7: Let your players know about your web shop

Now that your web shop is live, it’s time to tell your players about it. You can do this via email, newsletters, social media handles, a Discord server, and more. Use the email addresses or handles you may have collected when players signed up for your game. You can also have LiveOps or a banner in-game, asking players to sign up and enter any information you may require: email address, social handle, etc.

You can use that information to direct players to your WebShop, let them know about sales, special item bundles, subscriptions, and more. It’s your shop, now open for business. Let everyone know!

Please contact Xsolla’s integration team for advanced help with setup or any technical assistance. You can also reach them via online chat at this link by clicking the message icon in the bottom right corner.

For more information about Web Shop for Mobile Games, download the free ebook, or feel free to set up a call. Your future starts now, and Xsolla’s here to help.

This article was originally published at the Xsolla blog.

As games move more towards a hybrid-casual model, the potential for new avenues of revenue opens up. As your retention rises, so too do the opportunities. Let’s look at six ways you can increase your profits.

1. Incorporate native advertising

Native advertising is where adverts are embedded in the very fabric of the game. They’re far less intrusive than traditional advertising, allowing you to place ads in your game that don’t disrupt how the gameplay flows. They feel natural; in places where players would expect to see them in the real world.

For example, a native advert might be on an in-game billboard, the banners alongside race tracks, superimposed over the field of a tennis match, posters on the wall, or holograms in the street.

These adverts can either be static sponsored content or dynamic ad space that brands can purchase in real time. The key is that you don’t pause the game to show the ad.

2. Add audio adverts to your game

Did you know, 73% of mobile players have their volume at or above 10%? It might not be loud, but it’s enough to catch people’s attention. This makes them a useful addition to your monetization strategy.

They also have similar benefits to native advertising. Audio adverts are far less disruptive than traditional methods: they play in the background, allowing the gameplay to continue unhindered.

Due to the nature of audio, it’s a relatively simple approach to insert into your game. Pause the music, play the ad, and return to normal once it’s finished. They are also suitable for rewarded ads, allowing players to gain power-ups or in-game currency far quicker than needing to watch a video. Which makes them an effective method to increase your advertising revenue without hurting your retention.

3. Make IP deals with brands

Partner up with a brand to offer in-game cosmetics or extra content using their brand assets. These could be characters, items, or even entire levels. Not only does this give you additional content to keep your game active, but it can also bring in new fans.

Another method is to wrap your game entirely in the brand’s IP. For example, you could approach a brand with your match-3 game and use the same mechanics and gameplay loop, while using their characters and universe.

4. Sell merchandise using your own brand

Once your hybrid-casual game has a following and community, it’s inevitable that certain characters or phrases will become popular. These are perfect for turning into merchandise. T-shirts, mugs, plushies – these can all feature your game’s art. Manufacturers like Alibaba make this even easier. You can buy products and have your own logo and designs printed on them.

You can even create unlockable content for your players, which they only gain access to by achieving certain milestones in your game. For example, every achievement in your game could have its own baseball cap. Players would need to unlock the achievement before they could purchase the cap in real life.

This gives your achievements more value and encourages players to seek out the hardest ones for the prestige of owning the real-world item.

5. Encourage fan-made content

Reach out to your community and run competitions to have their creations enter the game, such as levels, items, or cosmetics. This fan-created content can keep your game active and fresh while also giving you an opportunity to engage with your community.

Ideally, you would also offer an incentive to the creators, such as a cut of the purchase price. This makes it worth the player’s time and makes it far more likely you’ll get quality submissions. It also encourages the player to spread the word about their creations, which could bring even more players to your game.

6. Port your game to another platform

Expanding onto PC or console can help you open your game up to a new market, extends your game’s life, increases your return on investment, and leads to longer session lengths.

It’s a useful way of making the most out of your most successful games. You can read more about the process in our article on porting.

Data is key to any new approach

Whatever route you choose, make sure you keep track of which avenues are successful and bring in the most revenue. You want to make sure that you’re spending your time efficiently. The most effective way to do that is to bring data in from multiple sources and study the trends together. That’s where DataSuite comes in – it allows you to create your own player warehouse and track trends across platforms and different data sources.

With any transaction, there’s an exchange of goods and services. It used to be black and white in gaming – you pay money upfront, and you have that game. Done and dusted.

But it’s not quite that simple anymore. With more types of games, devices, and models entering the market, that exchange of goods is becoming a blur. Today’s big topic is people complaining about the price of games for what they’re getting. But why is that? Are studios becoming too greedy? Or are business models evolving so quickly that players can’t keep up with the trends? And what can you do to keep your games equitable and your audience happy?

Games have always been expensive

The first console to hit the stores was the Magnavox Odyssey. It was $99. That equates to just under $700 in today’s market, and it came with twelve games. Seems fairly pricey. But you can see their reasoning for something that was a completely new piece of technology.

Let’s fast forward to the 90s. The PlayStation 1 was released in 1994 and cost around $299. Today that would equate to over $700. Once again, publishers could charge that much because it was new technology with mind-blowing graphics.

Back then, there was no downloadable content, campaigns, battle passes, liveops. There was only one transaction. And it was clear what you were getting. Yes, you can argue that even that’s expensive. But it was transparent; then the price can’t be an issue, right? Players have been spending hundreds of dollars on their games for years. And with inflation, games aren’t that expensive compared to a few decades ago(at least, games that are one-off payments).

Gaming is much more complicated now

The gaming world has evolved. Let’s break it down:

• We have different device types: Mobile, PC, console, VR, Switch, and more.
• We have more sub-genres and game types: We can find all types of different genres in the stores. Take role-playing games as an example; we have ARPG, MMORPG, Strategy RPG, Tactical RPGs, and a range of hybrid genres.
• We have different audiences and preferences: We only thought of a gamer as a teenager on the PlayStation. But with the increase of genres and technology, almost anyone could be considered a gamer.
• Games are now a service: Not many studios end development when they launch their game now. Many, if not most, pump time and resources into regular new content to keep their players engaged. And that needs to be funded.

All of this meant we needed new monetization models. It didn’t make sense to always pay upfront for a game. There had to be a different exchange. Free-to-play games gave birth to the ads monetization model 10 to 15 years ago, and players accepted that exchange (to an extent – too many ads and the exchange starts to feel unfair).

“Each customer is an individual, not a generalized demographic.” – Peggy Ann Salz.

Options are a good thing. We don’t deny that, especially in today’s market. What we’re talking about is a fair exchange. Are developers losing sight of that? Are they focusing more on money than the experience?

What do we consider to be a ‘fair exchange’?

You can argue that a fair exchange comes down to the individual. Their taste and preferences, their income, and how much they value art. A $70 game for a ten-hour campaign could be expensive to most gamers – but to the lifelong fan, it could be nothing.

But there’s definitely a benchmark in the industry. When paying that much for a premium game, you can expect the campaign to be at least 30 hours or so, with some extra side quests. If your game is any less than that, it could be considered a rip-off. The key here is setting expectations. What is the other value you’re offering? And does your player know that?

There are three primary areas to consider:

• Gameplay Length
• Overall price
• Quality (this could be the graphics, story, mechanics, etc).

You want to try and hit two out of three. AAA games have a longer overall playtime and are higher in quality. But they’re not cheap. That seems fair. “Okay, I’m getting a really cool game with lots of gameplay and mechanics and graphics. I don’t mind spending more money on this.” There’s a value to the exchange. The same applies to casual games. They’re lower quality with simple gameplay, have loads of replayability, and are either free (or with ads) or very cheap (around a couple of dollars).

There’s a problem in our industry

Whether we call it corporate greed or just a lack of critical thinking, we’re seeing more developers push the boundaries for pricing, and underdelivering in gameplay. Let’s have a look at some examples and ask ourselves: “Does this feel like a fair exchange?” 

Overwatch 2 locks content behind battle passes

There was a lot of hype over the last few years for Overwatch 2. We were promised story-led campaigns, skill trees, customizable character abilities, and more. When they released the title, they made it free-to-play, with battle pass options (similar to games like Fortnite and PUBG). In theory, this all sounds good. But we found three issues:

1. They shut down Overwatch 1

Players could no longer play the original game, which was a paid title. Sure, they got Overwatch 2 for free, but so did other players who didn’t have the previous game. It’s easy for those legacy players to feel shortchanged.

Rather than rewarding their loyal players, they instead punished new players to Overwatch 2. For completely new players who don’t pay, they have to play to unlock certain characters – even ones from the original game. From what we can see from this interview, a new player has to go through 150 matches to unlock Echo from Overwatch 1.

2. They’ve locked new characters behind their battle pass

In Overwatch 2, you can unlock characters in one of two ways: pay for the battle pass or grind to unlock them. The latest character unlocks after reaching level 55 (around 60 hours of gameplay). Yes, players who couldn’t afford to pay could get the character. But Blizzard sure didn’t make it easy for them, putting those people at a disadvantage. And their players weren’t happy about this.

3. They didn’t deliver on what they promised

Unfortunately, a lot of the content and features they promised weren’t in the game during launch. Aside from new characters, maps, and a cleaner user interface, there wasn’t much difference between the two games. Which frustrated a lot of players.

Is this a fair exchange? No. From what we can see, the approach they’ve taken has annoyed their players into spending their money or pushed them away entirely.

Diablo IV charges one-off payment and offers battle passes

When we heard that Blizzard decided to release Diablo IV as a full AAA game, but with a battle pass option on top, we definitely raised an eyebrow. Usually, games are either free with battle passes or have a one-off payment but no battle passes (as we can see with Overwatch 2 and similar games).

Diablo IV, recently released on all major platforms and goes for around $70. And they have just released their first battle pass. From what we can see, it has three tiers:

• Free to play: With 27 tier rewards and 20 smoldering ashes.
• Premium: With 63 tier rewards (costs around $10 a month), an armour set and two mounts.
• Accelerated: Same as premium, but also provides 20-tier skips and a special cosmetic item.

Is this a fair exchange? We reckon so. They haven’t locked the free players from anything too important. But we’ll know more when we see more of their reviews.

And if they release content for the paid players as well, then it could work. For example, if they release new classes or core mechanics to everyone, but leave purely cosmetic stuff to the subscribers – that could be fair.

Cyberpunk launched with too many problems

We’ve heard this story all too often now. When CD ProjekT Red launched Cyberpunk 2077, it was a bit of a disaster. The amount of bugs and broken promises inside the title was laughable.

But what was the real problem here? Aside from launching far too early, the biggest problem was the price. If you’re charging someone for a premium game, you’d expect a premium experience.

Is this a fair exchange? No. Maybe if they released it as early access to iron out bugs, postponed the launch until the issues were fixed, or reduced the price, then it would have been fairer. But players around the world were rightfully annoyed and felt ripped off.

Grand Theft Auto: Definitive Edition costing $60

When Rockstar Games announced that they would be remaking their classic trilogy, players were thrilled. Unfortunately, when they released the remake (Definitive Edition), we saw a lot of backlash online. The titles were marred with poor graphics and bugs.

Since the launch, the studio has released a lot of updates and fixes. But the biggest issue we can see is that they just didn’t meet players’ expectations and charged a high amount for a quick facelift (ranging from $59.99 to $69.99, depending on the console).

Was this a fair exchange? No. Players were left disappointed with the poor graphics and overall price. So much so, a player remastered San Andreas themselves, quoting “Rockstar didn’t do a very good job.”

If Rockstar had set more realistic expectations, delivered what they promised, or even lowered the price, then the exchange would have been much fairer.

How can you keep your game fair?

There’s no right or wrong answer here. It really does depend on what feels fair for your players and your studio. But to give you some direction, you can follow these rules as a guide:

1. Don’t lock important content behind passes

You want to make sure there’s value in your battle passes, otherwise why would someone buy it? But don’t screw over any of your other players. As we can see with Overwatch, it can create a negative experience for a large chunk of your audience, which can harm your studio in the long run. Instead, think up creative ways to reward your paying customers. Collectables, skins, and emotes are a good place to start.

2. Don’t release half-baked games at full price

We’re used to seeing the odd bug here and there. But if your game has some serious performance issues, then don’t launch it. The creators behind Baldur’s Gate 3 actually handled this quite gracefully. They perfected the first part of their game, released it as early access, and kept their community informed about the full release. It was a great way to create hype for their game, while also gathering crucial feedback, and keeping their audience happy.

3. Set realistic expectations

Too much hype for your game can be your downfall. Cyberpunk’s marketing campaign was so good, players were excited for years. Only to be disappointed when the game was released with only half of the promised features. As for Grand Theft Auto, if they were a bit more honest or open with what they were creating, perhaps players wouldn’t have reacted so negatively.

4. Be transparent with what you’re charging

With more complex models, it’s easy for players to get lost or confused. Nintendo is under fire at the moment and has been accused of using “dark patterns” to encourage players to spend money without them realizing it. So make sure your players know what they’re doing and buying. Diablo Immortal is also currently feeling the heat for their microtransactions. Their community were left shocked and frustrated with the game’s legendary gem upgrades and how unclear the game’s monetization model has been. Someone did the math and reported that it can cost up to $110,000 to fully upgrade a character in Diablo Immortal, all due to their new gem system. If that’s the case, it doesn’t feel particularly worth it.

5. Don’t punish your players

If Blizzard changed their approach to rewarding existing and new players, then Overwatch 2 could be a much more positive and enjoyable experience. Let’s look at rewarded ads: you watch a video to earn more coins or another life. But you can take it a step further. Homa Games have actually made item upgrades unlockable in their game Aqualand by watching ads. Suddenly making those ads a lot more desirable and fair.

Similarly, Tennis Clash actually uses ads to mitigate losses and amplify wins. If a player loses a match, they can watch an ad to recoup their lost coins. But if they win a match, they can watch an ad to double their winnings.

Test to see what works

We’ve shown a lot of AAA and premium game examples, and we appreciate that mobile games can be more complicated when combining so many monetization techniques. So data is crucial for understanding and perfecting your models. Maybe you can charge $1.99 for your game and still show ads. Or perhaps you can rely solely on subscriptions and charge $20 a month. Without testing the waters, looking at your data, and listening to your players, it can be tricky to figure out what your game is worth and what will make for a fair exchange.

If you want to get more out of your game’s data, sign up to our tool today (for free!).

In the ever-evolving landscape of mobile gaming, advertising has become a crucial revenue stream for developers while also providing players with engaging content and rewarding experiences. Mobile game ad formats have come a long way, offering a variety of options for both developers and advertisers to reach their target audiences effectively.

In this article, we’ll explore five popular mobile game ad formats that have gained traction in recent years and that will help you reach the top!

Interstitial Ads

Interstitial ads are full-screen advertisements that appear at natural breaks in gameplay, such as between levels or when transitioning from one screen to another. These ads are typically displayed for a few seconds and can include images, videos, or interactive elements. Interstitial ads are known for their high visibility and effectiveness in capturing players’ attention.

Key Features:

• Full-screen ads.
• Appear during natural breaks in gameplay.
• Highly effective at grabbing players’ attention.
• Suitable for various ad content types, including videos and interactive experiences.

Benefits:

• High visibility and engagement.
• Excellent for promoting other mobile games or products.
• Can be used to increase ad revenue without disrupting gameplay flow.

Rewarded Video Ads

Rewarded video ads offer an exceptional win-win scenario for both players and developers. In this ad format, players willingly opt to watch a brief video advertisement in exchange for valuable in-game rewards. What sets rewarded video ads apart is their remarkable feature of a 100% viewing rate. Players must watch the entire ad to unlock their coveted rewards, making this format exceptionally valuable.

Key Features:

• Players willingly choose to watch ads for in-game rewards.
• Typically, these ads are short, spanning 15 to 30 seconds.
• Encourage extended playtime and enhance player retention.
• Highly effective for driving user actions, such as app installs or purchases.

Benefits:

• Provides a positive user experience as players receive tangible rewards.
• Achieves a 100% viewing rate, ensuring advertisers’ content is seen in full.
• Highly engaging, with industry-leading conversion rates.
• Particularly appealing to advertisers seeking guaranteed viewership and conversions.

Rewarded video ads shine in the mobile advertising landscape due to their inherent value proposition – a guaranteed viewing rate. This characteristic sets them apart from other ad formats like interstitials, making them a powerful choice for developers and advertisers alike.

Playable Ads

Playable ads take interactivity to the next level. Instead of passively watching a video or image, players get to experience a mini-version of the advertised game before deciding to download it. These ads are highly engaging and can give players a taste of the gameplay, mechanics, and overall experience, increasing the likelihood of conversion.

Key Features:

• Interactive ad format where players can sample the game.
• Provides a preview of the gameplay.
• Engaging and immersive.
• Effective for showcasing the unique features of a game.

Benefits:

• Increased user engagement and conversion rates.
• Higher-quality installs as users have a better understanding of the game.
• Appeals to gamers looking for new experiences.

Banner Ads

Banner video ads, one of the earliest mobile ad formats, are compact advertisements that can appear at different locations on the screen, such as the top or bottom, depending on the game’s design. Notably, the size and placement of these banners can vary significantly based on the specific requirements of each game. Additionally, some advertising networks offer adaptive banners that adjust in real-time to fit the game’s layout seamlessly.

Key Features:

• Compact and non-intrusive ads that occupy a portion of the screen.
• Continuous visibility during gameplay.
• Banner size and placement flexibility to suit diverse game layouts.
• Availability of adaptive banners that dynamically adjust to the game’s design.

Benefits:

• Non-disruptive to gameplay, allowing for uninterrupted user experiences.
• Adaptability to different game layouts, ensuring a harmonious appearance.
• Versatile and easy to implement, catering to various ad sizes and positions.
• Adaptive banner options offer real-time optimization for improved engagement.

Banner video ads, with their adaptability and varying sizes, accommodate the unique characteristics of each game, making them a versatile choice for developers and advertisers aiming to strike the right balance between monetization and user experience.

Native Ads

Native ads seamlessly blend into the game’s user interface, mimicking the look and feel of the game itself. These ads are often integrated into menus, loading screens, or other non-intrusive elements. Native ads aim to provide a more organic and less disruptive advertising experience. When done right, they can enhance the overall immersion of the game and contribute to player retention.

Key Features:

• Ads that harmonize with the game’s aesthetics.
• Often integrated into game menus, loading screens, or story elements.
• Designed to feel like a natural part of the game.
• Can include sponsored content, product placements, or in-game events.

Benefits:

• Enhances player immersion and retention.
• Provides a less intrusive advertising experience.
• Effective for promoting products or services in a contextually relevant way.

Audio Ads (Immersive Sound Advertising)

Audio ads represent a unique and immersive form of advertising within mobile games. Instead of relying solely on visuals, audio ads harness the power of sound to engage players. These ads typically play in the background while the game is running, offering a non-intrusive yet highly effective way to convey brand messages or promote products to players.

Key Features:

• Auditory advertising experience.
• Non-disruptive to gameplay.
• Suitable for conveying brand messages and promotions.

Benefits:

• Diversifies ad formats and engages players through sound.
• Allows for creative storytelling and branding opportunities.
• Enhances the overall gaming experience without interrupting gameplay.

In-Game Ads (Billboard)

In-game ads, specifically billboard ads, take advantage of virtual billboards or advertising spaces within the game environment. These billboards showcase brand messages, imagery, or video content in a contextually relevant manner. By integrating these ads into the game’s world, developers can create a more realistic and immersive experience for players.

Key Features:

• Integration of brand messages or content within the game environment.
• Contextually relevant placement of ads within the game’s world.
• Realistic and immersive advertising experience.
• Opportunity for dynamic ad updates and changes.

Benefits:

• Creates a more immersive and engaging game world.
• Offers a contextually relevant advertising experience.
• Allows for dynamic ad updates, keeping the game environment fresh.
• Provides opportunities for long-term partnerships with brands.

Direct Brand Deal Ads Integration

Direct brand deal ads integration involves collaborating directly with brands for in-game advertising. Developers integrate brand content, products, or promotions seamlessly into their games. These deals often result in unique, contextually relevant ad experiences tailored to the game’s theme. However, we take a comprehensive approach by combining all these ad formats – including audio, in-game, and rewarded video ads, among others – with specialized integrations to create immersive and contextually relevant ad experiences.

Key Features:

• Collaboration with brands for in-game advertising.
• Integration of brand content or promotions.
• Contextually relevant ad experiences.
• Tailored to the game’s theme and audience.

Benefits:

• Enables customized and unique ad experiences.
• Allows developers to monetize their games while enhancing player engagement.
• Offers opportunities for long-term partnerships with brands.

Conclusion: A Dynamic Era of Mobile Game Advertising

The world of mobile game advertising has evolved into a dynamic landscape that offers diverse opportunities for developers, advertisers, and players. From high-impact interstitials to the immersive soundscapes of audio ads, the guaranteed engagement of rewarded video ads, and seamless integrations of native ads, each format brings unique strengths to the table. Direct brand deals and in-game ads (billboard) further enrich the experience, fostering partnerships and creating immersive game worlds.

As the mobile gaming industry continues to expand, these ad formats contribute to a thriving ecosystem, emphasizing the importance of a delicate balance between monetization and user satisfaction while promising continued innovation and engaging experiences for all stakeholders.

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This article was originally published on Tap Nation.

In January, industry expert Eric Seufert predicted that brand spend would reach at least 10% of in-game ad monetization. It’s a prediction that we couldn’t resist looking into. When we look back on 2023, will it really be the year we see brands spending far more of their budget on in-game ads?

Brands are definitely seeing the value, but it seems like there are a few barriers still in the way. For one example they want brand-safe slots and better measurement, so it could take a little longer than just 12 months – especially in the the current economic climate. Brands are generally tightening their advertising budgets, and this will likely be reflected in the gaming industry as well. According to reports, 30% of advertisers cut their 2023 budgets.

This belt-tightening impacts the predicted growth rate of ad spend in gaming, potentially delaying the moment when brands commit more of their budgets to in-game ads. Still, the value and potential that gaming presents are undeniable. It’s just that the path to full realization of this potential might be a bit rockier than we’d hoped.

Brands are spending, albeit slowly

Statista predicts that the advertising expenditure in gaming will rise from $46 billion in 2021 to $130 billion in 2025, a considerable increase over just five years.

Most of this expenditure is channelled into mobile gaming. Statista reported in 2022 that mobile gaming would constitute half of all gaming revenue. Consoles came in second, accounting for 28%.

Source: Statista

Evidently, mobile gaming is the preferred advertising platform for brands. This is understandable, as console and PC games typically require one-off payments. Free-to-play games on other platforms much less frequently rely on advertisements for revenue; they tend to use subscriptions and in-app purchases for funding their development.

Brands spend far less than they should

Big brands tend to have big budgets. But the amount that brands are putting aside for gaming is far less than you’d expect. Gaming accounts for less than 6% of total digital ad spend in the US, according to the IAB.

That’s a very low figure, considering the potential audience. People spend far more time playing games than they do with any other media.

According to Ernst & Young, one of the big four accounting firms, brands spend nearly $60 billion on TV ads and $1.5 billion on gaming. But people only spend 8% of their time on TV content, but 37% of their time gaming. It’s all backwards.

According to EY, brands spend far less on gaming, but it grabs far more of people’s attention.

This data suggests that brands would reap more value by investing their budgets in gaming rather than television ads. However, common misconceptions about gaming deter them. EY further explains that brands hesitate to invest because they often adhere to outdated stereotypes about gamers, viewing them as unemployed young males.

But that’s just not true. Almost half of gamers are women, and the average player is 35. The gaming market is huge and varied. It’s just that brands haven’t realized it yet.

What is true is that the younger generation cares more about gaming than any other entertainment. A Newzoo report found that younger customers spend nearly 15 hours a week engaging with gaming content. Almost half of that time is playing, the rest is reading, creating and watching others play.

Irrespective of their target demographic, brands need to rethink their stance on gaming. It’s an opportunity waiting to be seized.

Brands want to advertise in a safe space

One of the key concerns for companies is whether the game they’re advertising in is suitable for their brand. They don’t want their brand associated with controversial opinions or a bad game. They only want to advertise in high-quality titles, with respectable content.

The shift in the industry from hyper-casual to hybrid-casual helps developers here. Hyper-casual games are typically lower-budget and have a quick turnaround. While they’re fun, they’re not very deep.

On the other hand, hybrid-casual games are – by definition – deeper. They focus more on retaining players with meta-features and are less reliant on spamming ads at the beginning of the game. Their players stick around for longer and are less frustrated. So there’s not the same level of concern for brands to be affiliated with an annoying game, and targeting unhappy players.

It works both ways, too. Because developers are focusing more on deeper gameplay, longer playtime, and a hybrid-monetization approach, they’re much less likely to want to advertise other games. All that does is encourage players to leave their own titles and play other games, instead of their own. Instead, developers want brands to advertise in their games. So brand advertising is a win-win for both.

Brands want to spend more

The brands themselves know this. According to The Drum in 2022, 81% of media buyers plan to increase their spending. And 93% intend to run in-game advertising by 2025.

In fact, we’re seeing this shift already. Brands are already teaming up with game developers. Ralph Lauren is releasing content in Fortnite. McDonalds got together with Overwatch 2. Kraft, Hershey, Frito-Lay, M&Ms – they’ve all launched campaigns that appeared on gaming platforms.

We’re seeing more and more stories of partnerships like these. And it’s likely that we’ll keep seeing big brands working directly with developers to share their IPs.

But brands don’t have the usual channels to advertise and partner up with game developers. We’re a new industry. And a large reason that brands aren’t running campaigns is that there’s a barrier to entry. They don’t know how.

According to that earlier EY report, developers need to do three things to help brands:

1. Make good games. Brands don’t want to be associated with spammy games. So you need to seamlessly blend ads into the core gameplay loop.
2. Help brands measure. Brands are concerned that they can’t get the data they need. So offer ways to integrate measurement SDKs into your games to help them track their ads.
3. Help educate brands. Work with agencies and mediation platforms to teach brands about the value of advertising in games.

It’ll take a while for brands to shift

As you can see, there’s definitely a trend for brands shifting their budgets towards gaming. They’re realizing the benefits, seeing that their preconceptions are wrong, and slowly moving over.

But it’s likely to take them a little while for them to get the results and spread the word. As an industry, we need to show brands that they can measure the data they need, that ads aren’t breaking the gameplay experience, and explain the value of advertising in games. If we do that, we’ll definitely see more brands spending on in-game advertising and partnerships.

Will we hit that 10% figure? Hopefully. It seems ambitious, but possible. And we’ll definitely get far closer. But if we work together to help ease brands into the process and show them how they can measure their results, we can speed up the change.

The answer to this question depends on which metric you are taking into account. Based on our data in 2022, the ad networks with the highest average LTV were ironSource on Android, and Apple Search Ads on iOS. We delve into detail on the best ad networks to advertise hyper and hybrid casual games based on different metrics such as Ad LTV, IAP LTV, total installs, D1 and D7 retention in this blog post.

In this blog post, we expand on some of the highlights from our video interview with Korhan Cabalar – Founder of Voyager Growth.

Which hyper-casual industry trends from our report have been the most surprising?

“I am actually surprised that the number of IAPs increased by 34%. Due to the recession in the US, I would have expected to see a decrease in IAPs. I also think that this is a strong indicator that mobile gaming companies should switch to hybrid-casual games. I would expect IAPs to continue increasing in 2023.”

The illustration above depicts the trend of IAPs based on Tenjin’s 2022 data set. See the full report here.

Tenjin’s 2022 data set not only indicates a rise in in-app purchases (IAPs), but it also highlights a declining trend in eCPMs. This reinforces the need for gaming companies to transition from hyper-casual to hybrid-casual games in 2023.

The illustration above depicts the trend of eCPMs based on Tenjin’s 2022 data set. See the full report here.

What advantages does increasing your IAP share offer in your monetization strategy?

“Increasing your IAP share in your monetization strategy would mean you should go for blended ROAS campaigns, which account for both ad revenue and IAP revenue. This would allow you to scale more in terms of your ad spend – which is a really good indicator for mobile games. ”

Which channels should hyper-casual studios utilize in 2023 to expand the reach of their mobile apps?

“If you have a really low CPI, I suggest that in the first stage you should go for TikTok. This would help you scale a lot. Meta could sometimes also be a good option for this stage, but TikTok works better. You should also support this UA spend with SDK networks such as Applovin, ironSource, Unity, Mintegral, and so on. In my experience, TikTok and Applovin are the best combination. But it depends on your metrics.”

Would there be significant changes in the user acquisition (UA) channels for those transitioning from hyper-casual to hybrid-casual games?

“In my opinion, the first thing you should do when transitioning from hyper-casual to hybrid-casual games is to change your campaign structure. As I mentioned earlier, if you have revenue from advertising and IAP, you should start with ad ROAS campaigns in the first stage. If you are generating a lot of revenue from IAPs, you should go for blended ROAS campaigns that focus on both IAPs and ad revenue. There are many channels in the market that you can advertise on. As long as you have a positive ROI, you can launch these games on any platform. One big difference between the two genres is that with hyper-casual games, it is less likely for people to spend on Apple Search Ads (ASA). However, with hybrid-casual games you can find an opportunity to spend on ASA as well.”

What are the most common mistakes developers make when they transition from hyper to hybrid-casual games?

1. Focusing only on CPI numbers

   “Previously, with hyper-casual games and their low CPI, money could be recouped within 4 days, sometimes even within 2 days. However, the landscape has changed. Now, it typically takes 15 to 45 days to regain the investment. When transitioning, it’s crucial to shift focus from CPI alone and prioritize retention metrics. Rather than making a hasty decision to abandon a game based on slightly higher CPI, developers should examine retention metrics such as D7, D10, D14, and D30. If these metrics show strong retention, the higher CPI can be offset. Multiple factors, including Retention, Play time, the difference between Ad revenue and IAP revenue, among others, should be carefully considered before deciding whether to discontinue a game.”

2. Putting too many interstitial ads within a game

   “Another mistake is to put too many interstitial ads within a game. The aim is to have a good retention to sustain strong growth over time. This means you need to adjust the time between interstitials. Rather than putting too many interstitials in the first few days, people should focus on the long term return.”

3. Underestimating the power of creatives

   “I also see that many mobile gaming companies also underestimate the power of having a creative strategy. I think creatives are one of the most crucial aspects in the mobile gaming industry. Hiring an experienced creative professional can do wonders to your mobile games profitability.”

Which genres should be explored beyond hyper-casual games?

“I believe hyper-casual games are not dying, but evolving. You just need to adjust your focus strategically. If I was a publisher, I would definitely go for hybrid puzzle games. A good hybrid puzzle game can sustain growth and income for more than 3 years.”