How does mobile game monetization work?
In this article, we’ll talk about how monetization works in mobile gaming and what common case studies are in the market. First, we’ll look at the types of paid advertising, and then we’ll analyze specific examples of how monetization works in popular gaming apps so that you can choose the right way to monetize your own app.
We’ll also use statements that will help fix certain milestones for the entire mobile GameDev market.
How paid games are monetized
With paid apps, everything is simple, so we won’t dwell on them for long. There are two models: a one-time purchase of all game content, or a renewable monthly subscription. Both models make the entry threshold significantly lower, and their presence in stores keeps decreasing. Paid gaming apps are becoming a niche product.
Most often, this type of monetization is used by quests or console or PC games ported to mobile — that is, the games that barely use procedural rhetoric that makes us perform the same actions every time to get a reward, and are primarily focused on the plot.
Statement 1. It would be more correct to say that the paid game model is suitable for video games with end-to-end content, that is, the video games where the ending matters most.
For example, the developers of Lifeline, a real-time text quest, report at the end of the key plot that they have several more stories that have the same mechanics and, to give it a try, you could buy a DLC. There are no other marketing touchpoints in the game, since the users have paid for their immunity right at the start.
How to monetize free games: Principles and mechanics
The main types of free app monetization can be divided into two main groups: In-App Ads (IAA) and In-App Purchases (IAP). Each of them has its own mechanics that can, and should, be efficiently combined.
Integration of a relevant monetization tool that fits into the app context not only can affect profit growth here and now, but also has a positive effect on the internal app metrics like Retention, Daily Active Users, or Average Session Time, which will ensure long-term steady growth in organic traffic in App Store or on Google Play.
There are several types of In App Ads.
- Rewarded Video Ads. To get a valuable resource, gamers can watch 5 to 30 second long videos that advertise another service or mobile game.
- Offerwall. Users can take a range of actions to get the product for free; for example, connect their social media. Should they take action, the advertiser pays to the site.
- Interstitial Ads. Videos in this format show up randomly and do not give the users any rewards. You can often skip them after the first 3 to 5 seconds.
- Playable Ads. This format means interactive ads with gameplay elements to give the users an idea of what awaits them.
- Native Banner Ads. Native, or natural, ads are less common in mobile gaming. They include the type of videos where popular streamers show how passionate they are about the game. The problem is, mobile game streamers aren’t as well known as PC and console streamers.
For example: Playable Ads in Crush Them All
Rewarded Video Ads, Offerwall and Playable Ads, unlike other advertising tools, are usually only used in gaming apps as they often suit the most mobile games. Some players are ready to watch a short promo video to get in-game resources or an additional attempt.
This type of advertising can satisfy not only the developers, but, more importantly, the users, since they will not have to spend real money on valuable gaming resources.
Watching Rewarded Videos is voluntary, so users are less likely to be annoyed with such ads compared to pop-up banners that show up once you complete a level.
According to the Facebook Audience Network, nearly 80% of mobile game developers believe that Rewarded Video Ads is the most effective and promising ad format. More than 50% of gamers admit that they played the games longer that had this type of advertising and the opportunities it opens up.
In recent years, in-app purchases (IAP) have been divided into several major types:
- Extended access, paid subscriptions. In general, an app stays free; still, a one-time payment or an installment is required for some content to become available (or so that you’re able to remove ads).
- Unlockable items and resources. This format is suitable for mobile games that introduce paid characters, weapons, equipment or paid attempts to resume the game from the moment of failure.
- Battle Pass provides access to extra content through the leveling system. If users play a lot to reach the maximum pass stage, they can get access to the next battle pass absolutely for free. The mechanics have recently proven to be efficient in most online action games. This format encourages gamers to spend more time playing the game. This influences the majority of internal metrics, and the store algorithms consider the app as one with good standing.
- Piggy Bank. Along with the walkthrough, users get items or in-game currencies, but they will be able to access them only after a one-time payment. This format is often combined with Battle Pass: some content becomes available for free once you level up, while other content stays unavailable until you purchase the Battle Pass.
- Loot Boxes. Items that help you get a random item, which can be either not very valuable or very rare.
What is the Difference Between IAA and IAP?
In-app purchases are more relevant for mobile gaming apps. As a rule, the more content you get, the more significant opportunities to introduce a variety of monetization models you’ll have.
For the greatest efficiency, you may want to use and combine several techniques.
The most important thing is to stay focused on users. They should neither feel annoyed by abundant ads nor dissatisfied with the fact that the gameplay becomes much more interesting and fascinating compared with the base game once they’ve bought an in-game item. Otherwise, why would they come back?
How monetization works in mobile games of different genres
Here we’ll look at four case studies of different monetization models that are most often used by mobile game developers. In this section, we’ll continue to draw statements relevant to today’s GameDev industry.
A popular platformer game released back in 2012 that has kept its relevance to this day. According to the plot, your character runs along the railway tracks from a safety guard after an act of vandalism. One mistake like colliding with an oncoming train or fence, and the game is over. To continue and collect more game currency, you can watch 5 to 30 second long Rewarded Videos / Playable Ads. Basically, the length of a game session depends on the player’s desire to watch the ads.
The game mechanics are arranged in such a way that viewing ads can take more than half of the game session. Rewarded Videos can solve almost any problem like continue the game, double your resources, or get in-game currency (keys) to open loot boxes. There is no limit to the number of videos per day.
An ad view button on almost every screen helps to farm resources faster or receive bonuses before starting a new race. Up to three advertising screens with an offer to buy a cosmetic set can show up in a row as you start the game.
All three screens offer essentially the same goods, but for a different currency. It will take a beginner about 12 hours to earn 100,000 coins and pick up the Party set.
It’s worth noting that all the improvements are cosmetic; that is, they don’t provide any real advantages.
Besides, you can get a small one-time bonus if you connect your Facebook account. Oddly enough, the 300 Gold Offerwall bonus drops for viewing every official game’s social media account. Coins can be spent on cosmetic changes or items that will help you collect more coins in a new race.
Statement 2. Direct sales of gaming products are not that popular right now. Games have several currency options at once. Most of them can be earned in the process, and you can mostly buy exclusive sets, sets of seasonal activities, or starter packs for real money. Subways Surfers, however, is balanced as the game is more casual than the case study that we’ll look at next.
In terms of IAP, the following purchases are available:
Most IAPs are associated with a single local currency (Coins).
For keys and coins, you can unlock new characters, use boards for increased mobility and get items that help you collect more gold.
At first glance, it seems that Subway Surfers is doing well and the fact that it has been strong for 9 years proves it the best. In reality, abundant advertising prevents new regular players from staying. There is an obvious conflict between their wish to play and a necessity to get resources by watching ads. The very first session is barely seen behind the ads. Even with impressive installs, the app is unlikely to have a good user retention rate. Subway Surfers still is far from decline, but it could be quite difficult for a no-name game with the same monetization mechanics to make it to the top.
Crush Them All
By genre, Crush Them All is a collectible RPG with tactical elements. The player has a squad of hundreds of characters that needs to be upgraded to access more complex activities. Making it to the endgame without any IAPs would take about a year of daily playing in this case. The character leveling is asynchronous. You can spend huge resources to level up your entire team, but you won’t be able to level up a single character at the same time.
The key feature of gaming apps of the like is that the process never stops. For this reason, the semantic cores of these games always have keywords associated with afk (away from keyboard) that denote the farming of resources to make the game improve without the player.
Monetization of this game is designed in such a way that you can buy only one in-game currency (flooz) for real money, but then you have to convert it into dozens of other resources like arena points, blitz points, etc.
In this case, we can see a good mix of Rewarded Videos and Playable Ads. You can watch videos anytime, and they are limited in number, so the players can better plan how much time they are willing to spend on a single session. Interstitial Ads are missing completely.
To incentivize buying in players who take the long road, the developers use seasonal graphic ASO and release special in-game events with exclusive rewards on public holidays. For example, the icon has a colder color in winter, but once it gets warmer outside, they start adding more yellow hue. Besides, the characters start wearing exclusive armor, which can only be purchased for real money.
Statement 3. Crush Them All uses Rewarded Videos and Playable Ads equally, but Rewarded Videos often show not so much the game mechanics, but rather unsuccessful gameplay in cases when an inexperienced user can assess the situation and make the right choice. Maybe such a way to design ad videos provides high conversion, so they keep using it.
Crush Them All looks good enough in terms of monetization smoothness. The problem with games of this kind lies in a different plane: how to stimulate purchasing in players who have been in for a long time and aimed at years of casual level ups?
The creators of Crush Them All found an elegant solution: team (guild) purchase rewards. Once every few months, they hold an in-game event with rewards for the entire guild, if one of its members makes a purchase. Gamers then put pressure on their guildmates to make purchases so that everyone receives a reward. It’s worth noting that the cost of these purchases is 2 or 3 times less than the cheapest IAP the rest of the time.
Thanks to this approach, the IAP monetization system looks quite balanced. The game does not make a pay2win offer; it helps you make it to the endgame content faster (stages and activities that become available once your squad has reached a certain level of strength). At the same time, you can play without ads at all, but in this case, Half Life 3 will release faster than you level up.
Call of Duty Mobile
This mobile game represents one of the most popular series of first-person shooters that has a large fan base among both PC and console players.
Battle Pass is its major monetization source. The pass is a kind of content subscription that the developers add to the game from time to time.
The game uses neither Rewarded Videos nor Interstitial Ads. All videos advertise exclusively the gear from the game that you can get in a variety of ways. You can close a video before it ends.
Most IAPs are items that cost less than $1, while Subway Surfers is more focused on purchases of approximately $5. On the other hand, there are not many games with IAPs in the $100 league.
Even a one-time Battle Pass purchase makes it easier to buy the next one. This way the game keeps the retention rate at required levels so that the store algorithms consider it promising. The system of daily gifts for new players works too.
More often than not, the game advertises unique weapons and cosmetic enhancements. It’s not easy to assess how efficient those weapons are because everything works just right once you’ve gained enough shooting skill.
With new maps, tasks and modes, the advantage of having a Battle Pass is rather different. Yes, several modes like Deathmatch, Battle Royale, or Zombie Mode are available in the free version, but the game subtly shows that there’s more to it than it seems.
The Call of Duty franchise on PC and consoles has been among the most popular shooter series for many years, and the company may well not drain life from users with ads by using the full game version as an umbrella product.
This game is a set of puzzles, both themed and everyday ones. The solution to the puzzle is not always lying on the surface, and, to get a hint, you can watch a video or buy a set of hints for real money.
The game uses Interstitial Ads along with other types of video ads. Interstitial Ads can be activated in completely different places, even if it seems to you that the new level has already been loaded. Videos of this type usually run for 5 seconds, but their unpredictability breaks the pace of the game. Ads can be removed once and for all for approximately $6.
There are resources you can get by watching ads, but they are unlikely to be of particular value. As you gain experience, hints become less useful.
A frequent display of ads based on the Interstitial Ads model eventually makes you feel rejected. Such a gaming experience doesn’t work and you feel forced to delete the app instead of paying to remove ads.
The problem is twofold. On the one hand, there is a lack of tests that would help to find out how much ads users can tolerate before they deinstall the app. On the other hand, the game was not adjusted for advertising events right from the start. It could benefit more from the paid game model.
The abundant advertising in Subway Surfers is due to resources that need to be gained, and farming becomes overbalanced at some point. The abundant advertising is more likely here due to the fact that the developers decided for a special way of monetization that led them to nowhere.
Things to sum up based on the case studies
Use the type and tools of monetization depending on your game genre. If you’re up to making your users experience a real adventure where the plot comes first, go for one-time purchases.
For free games, Rewarded Videos, Playable Ads, and Offerwall are probably the most powerful way to monetize. Gamers love rewards and are willing to click ads when they feel comfortable or when ads are part of the game. Pay attention to the resource system as it can be a crucial growth point.
There also is a current trend of videos showing the gameplay the game doesn’t have, on purpose, which attracts lots of misled users. The logic is to get people hooked at any cost; then, if the creative does well, you can introduce something of what you showed into the actual gameplay.
At the same time, we should keep in mind that in-game balance often goes destroyed by ad lovers; hence, leaving some space for it at the product development stage would be a better solution.
Make your ads predictable, prevent them from interfering with gameplay, and users will appreciate it.