A Publishers Guide: Mobile Game Monetization Strategies

As the gaming industry continues to evolve, game monetization has become a crucial aspect of any game’s success. 

The rise of mobile gaming and free-to-play games has seen in-game purchases become a staple in the industry.

Game publishers need to prioritize the player's experience while making the most of the available game monetization opportunities and trends. 

This article explores the latest game monetization trends, including the popularity of microtransactions, subscriptions, and game advertising.

Major Monetization Strategies In Gaming

There are various game monetization opportunities and strategies game publishers can leverage for game monetization. 

We break down the major game monetization options publishers can use to generate revenue. 

In-App Purchases

In-app purchases, also known as microtransactions, have become the go-to monetization model for game publishers. 

It allows users to buy certain in-game items to enhance their game play. This model allows publishers to scale their revenue without asking users to subscribe to a game they have not yet experienced. 

Instead this method incentives gamers to spend money to experience an advantage in game play.

Types of In-App Purchases

In the freemium economy, games can offer a variety of options for in-game purchases, which can be broadly described as:

1. Consumable Purchases: Such as extra lives, additional time, hints, loot boxes (when used), in-game currency, and power-ups are examples of this type of microtransaction. When a player buys such items, they can use the item once. However, they can purchase more of the desired item at any time.
   
   
2. Non-Consumable Purchases: Are items such game character cosmetic skins, additional levels, bonuses or limited edition characters.These skins and similar purchases are termed non-consumable purchases as they don’t expire once purchased. 

In-App Purchases Best Practices

Nearly half of all applications in the world feature in-app purchases, while 8 out of 10 games offer players the option to purchase items in-game. (Source: BusinessofApps). 

It’s clear that in-app purchases are a lucrative monetization strategy, which is why the execution of this strategy needs to be as seamless as possible.

Here are some things to keep in mind when deploying in-app purchases. 

1. Player Retention: It can be tempting to only focus on attracting new users and increasing sales, but retaining players is the key to long-term success. Don't sacrifice user experience for in-app purchases, and don't nag users to buy items right away. Instead, wait until they've played the game and enjoyed it before offering items or features.
   
   
2. Offer A Consistent Experience: The in-game store should feel like a natural extension of the game's branding. Don't make users feel like they're in a different app, or you risk losing their trust and revenue. Be sure to keep the app store interface and shopping experience simple or users will drop off. Keep the process simple and consistent.
   
   
3. Offer Incentives: Who doesn’t love a freebie and exciting incentives. These tactics are key to stimulating in-app purchases especially when coupling offers with effective user segmentation. Push notifications are another effective way to reach user segments and offer them exciting incentives.

Game Advertising Formats 

Game developers often use game advertising to make money from the audience they have built through a free game. When this monetization strategy is done well, ads can make the game more enjoyable for players. 

Here are four types of ads that publishers use most often:

In-Game Ads

In-Game Blended Ads: These ads are part of the game and can appear on billboards or as branded items in the game environment. They are less intrusive and can create a better ad experience for players. They can be in the form of display, audio and video.

Around the Game Ads

• Rewarded Ads: Players can choose to watch an ad in exchange for a reward, like extra lives or in-game currency. This is a popular type of ad, especially in mobile games, because it allows players to earn things without spending real money.

• Interstitial Ads: These are full screen ads and can be skipped or exited after a set amount of time has passed. While players often find this type of advertising distracting, they can be used during natural transition points in the game, to offer a better experience.

• Playable Ads: These ads offer users a chance to try a different game within the game they are already playing. This can help publishers get more people to try their game and help make more money from existing players.

• Banner Ads: Banners are the most widely used ad formats and have a significant role in mobile game monetization. They are anchored to free space at the bottom or top of the screen and they can generate significant revenue for publishers.

Game Advertising Best Practices 

Game advertising can be a valuable source of revenue for publishers. However, it’s important to find the right balance between monetization and user experience. 

Here are some tips to maximize revenue while deploying game ads:

Ideal Ad Frequency: While it may seem like more ads equal more revenue, bombarding users with too many ads can actually have the opposite effect as it creates a bad experience. Ads should be displayed at appropriate transition points without interfering with gameplay.

Choose The Right Ad Partners: Poor quality ads can be a turn-off for players, so publishers should work with reputable ad exchanges and SSPs to increase revenue. By delivering engaging and relevant ads, publishers can increase revenue.

Appropriate Ad Selection: Different games have different audiences, so it's important to choose ad units that fit with the game's theme. For example, rewarded ads can work well in puzzle games, while playable ads may be a better fit for hyper-casual games.

Personalization And Segmentation: Players appreciate a personalized experience, so it's essential to segment users and deliver tailored ads based on specific criteria to provide a more engaging ad experience.

Subscriptions in Games

One of the most popular game monetization strategies used by publishers today is the subscription model which acts as an extension to the freemium model. 

The freemium structure allows people to try the game for free before buying it. 

On the other hand, a subscription structure is where  players pay regularly to get more in-game items and benefits, like special tools or levels. 

There are two types of subscriptions:

• On-going subscriptions: These are continuous which mean that it automatically renews until you cancel them.

• Limited subscriptions can include battle passes or operations that give players access to special content. These battle passes can be a big way for games to make money, especially when combined with other in-game purchases.

Benefits and Limitations of Subscriptions 

There are benefits and limitations to the subscription monetization model that publishers and developers should be aware of. 

We explore these in detail below:

Benefits of Using Subscriptions 

Increased Retention And Engagement: When players buy a subscription, they have enjoyed the game enough to spend money. Once a player has invested not only time but money into the game they usually stay engaged with the game for longer than other less frequent players.

Scalable Revenue: Subscriptions enable publishers to generate consistent and scalable revenue. As the game gains popularity, so does the number of subscribers, resulting in increased revenue.

Loyal Gamers: Offering premium content or features through subscriptions is a key driver of conversions. Games that are able to create value through its subscription model can attract loyal players who leave positive online reviews. This is effective in marketing the game through player endorsements.

Limitations of Using Subscriptions

Not Suitable for All Games: The subscription model may not be suitable for all game types. Games with short play sessions may not attract enough subscribers to make the model profitable.

Creating Worthy Premium Content: For emerging games, creating enough subscription-worthy content can be time-consuming and expensive. Not having the resources to support premium content that encourages subscriptions can result in a weak strategy.

Player Resistance: Some players may not want to commit to a subscription, leading to a loss of revenue from potential one-time purchases. Additionally, subscription fees may deter some players from trying the game in the first place.

Best Practices for Implementing Subscriptions 

Here are some of the best practices to keep in mind while implementing subscriptions in games:

1. Create Custom Offers: Your audience is diverse, and your offers should be too. Creating different offers for new players and seasoned players can help you convert and retain more users.  For example, offering special prices for new players can encourage them to become paid subscribers, while offering exclusive deals for high-value players can increase revenue.
   

2. Focus on User Experience: Once a user becomes a paid subscriber, ensure that the user experience improves or changes to keep them engaged. If the player doesn’t feel their gaming experience has improved after subscribing, they might leave and never return. So be sure to offer additional perks and create premium-only spaces within the game to make subscribers feel valued.

3. Accessibility is Crucial: Unlike in-app purchases, subscriptions offer players access to exclusive content. Offering free trials for a few days is a great way to create value early on and increase the chances of conversion. Make it easy for players to access and use  subscriptions as this is essential for success.

Monetization Strategies: Subscription vs. Microtransactions

Both subscriptions and microtransactions are successful ways for game developers to generate revenue. 

Subscriptions require players to pay a recurring fee for access to premium content, while microtransactions allow players to make small payments for in-game items and features. 

Subscriptions provide a steady revenue stream, while microtransactions result in multiple small transactions over time.

When Should You Use Subscriptions?

They are best suited for games with constant updates and a large player base, such as FPS or MMORPGs. 

These games have higher ongoing costs, so subscriptions provide a stable revenue source. 

Games with large audiences can also deploy multiple monetization strategies to scale revenue efficiently.

When Should You Use Microtransactions?

They are extremely popular for free-to-play games as they allow developers to generate revenue while keeping the game free for players. 

Players also prefer microtransactions as they can enhance their gaming experience through smaller transactions without the long-term commitment of subscriptions.

When done correctly, microtransactions can result in higher revenue than other monetization strategies. 

Players are more likely to make multiple small purchases over time, leading to consolidated revenue that is high.

Successful Subscriptions and Microtransactions Campaigns

Games featuring subscriptions and microtransactions have seen some highly successful campaigns. 

Here are some examples of how these strategies have resulted in monetization within games:

Counter-Strike: Global Offensive: This game franchise has been around for 20 years and offers a variety of titles. However, its latest edition, Counter-Strike: Global Offensive, takes monetization to the next level. 

Players must purchase the game first, and then they can choose from a variety of in-game items and subscriptions, such as player models, in-game skins, and loot boxes. They can also opt for a monthly subscription to CS:GO 360° Stats, which offers additional stats on the user's gameplay. 

Valve, the development company behind Counter Strike and Steam, uses a subscription and microtransactions model, combined with the Steam marketplace, to generate billions of dollars in revenue.

Candy Crush: Despite being over a decade old, the original Candy Crush Saga is still generating billions worldwide. The revenue of Candy Crush was $1.2 billion in 2021, witnessing a significant increase over the last few years (Source: Businessofapps). 

This impressive revenue is due to its engaging gameplay and stellar microtransaction strategy, allowing players to purchase additional moves, lives, and power-ups as they play.

World of Warcraft: This multiplayer online role-playing game (MMORPG) has been one of the most successful subscription-based games of all time. 

In January 2023, over 2.3 million players logged in to play the game. (Source: Dexerto). Even though the number of active users has been declining in recent years, the game is still the biggest MMORPG in the world, with a massive subscriber base.

Xbox Game Pass: This subscription service provides access to hundreds of Xbox games, including exclusive titles, for PC and console players. 

As of January 2022, Xbox had over 25 million subscribers across the globe (Source: Statista). Interestingly, as per the stats provided by Xbox, subscribers played 40% more games and spent 50% more on add-ons and in-game purchases (Source: NME).

What Makes These Strategies Effective?

The campaigns mentioned above, as well as many other subscription and microtransaction based campaigns, have shown that they can be successful if well executed. 

There are three key reasons why these strategies were effective:

1. Valuable Offerings: Players are more likely to spend money on games if they feel they are getting value. If the game’s items are priced too high, players are unlikely to spend money. For subscriptions, value comes from regular updates, access to premium content, and more. 

2. Keeping It Minimally Intrusive: Subscriptions and microtransactions are less intrusive than other monetization strategies, such as advertising or upfront payments. Microtransactions, in particular, allow players to only pay for what they want rather than paying a large upfront fee.

3. Repeat Purchases: Many of these games offer regular updates and fresh content to users, to keep them engaged. With higher user engagement and retention, these games tend to generate repeat purchases, increasing revenue.

In Conclusion

_There are many ways publishers can make money from their games. But the key is to do it in a way that doesn't ruin the gaming experience for the player. It's important to find the right mix and monetization strategy for your game and audience. 

iion offers a suite of next-gen tools and is the only industry provider that provides a complete monetization stack including all in-game and around the game formats. iion can help you create a gaming experience that's tailored to your players' needs. 

We'll help you reach the right audience with targeted ad campaigns and keep them coming back for more. So, if you want to take your game monetization to the next level and skyrocket your revenue contact iion today.

Want to know how you can maximize your returns through tailored ad campaigns? Connect With Us Today!

FAQ

1.  What are some of the most popular game monetization strategies currently being used?
   The most popular game monetization strategies include paid games, microtransactions, game advertising, subscriptions, and in-game currencies.‍
2.  What are the benefits and challenges of using subscriptions as a monetization strategy?
   The benefits of using subscriptions as a monetization strategy include a predictable and stable revenue stream, the ability to offer exclusive content and benefits to subscribers, and the potential for increased player engagement and loyalty. 
   The challenges of using subscriptions include the need to consistently deliver high-quality content, the difficulty in attracting and retaining subscribers, and the risk of alienating players who do not want to pay for content.
3. ‍ What role is game advertising playing in the current state of game monetization?
    Game advertising has emerged as a highly popular game monetization strategy and is consistently growing. With the growth of the gaming industry, there is a\n increase in the demand for game advertising opportunities. Publishers are taking advantage of this trend by integrating advertisements into their games in a way that is both unobtrusive and relevant to players.
4. How do microtransactions impact player experience and satisfaction in games?
   The impact of microtransactions on player experience and satisfaction in games can vary widely depending on how they are implemented. When done correctly, microtransactions can enhance player experience by offering players the ability to personalize their experience, purchase virtual goods, or access exclusive content. However, if microtransactions are implemented in a way that feels predatory or unfair, they can have a negative impact on player experience and satisfaction.