Mobile games Monetization: What is it and How do you monetize a mobile game app?

Mobile games Monetization: What is it and How do you monetize a mobile game app?

Developing video games takes a lot of money, resources, time and effort, so if you want to stay profitable, you have to know how to monetize them. In the gaming industry there are many ways to monetize a game, but you have to choose the right model and the right tools that will help you achieve your goals.

What is Mobile Game Monetization?

Mobile Game Monetization is basically the process of making money out of your mobile games,  the obvious end goal of any mobile game developer. Years ago, the idea of mobile game monetization was limited to either a free app with ads or a paid app. But the market has changed drastically since then and new worlds have opened up.

What is a mobile app monetization?

App monetization is a collection of techniques that create additional revenue within an app. It is essential for marketers who want to remain competitive in a world of free mobile apps and still get a healthy ROI. An additional benefit  is that these techniques can lead to better user experience. For example, marketers can personalize ads to target specific users, which in turn delivers more relevant content while encouraging them to re-engage later on. Similarly, users who have been targeted early on with personalized incentives will feel more valued and may continue using the app on a long-term basis. Free apps are certainly no barrier to earning a profit; they simply must employ monetization strategies to ensure long-term success.

How do you monetize a mobile game?

According to GlobalData, mobile gaming has already overtaken the console game and personal computer (PC) game markets. Over the coming years, with the increased progress of cloud gaming technology (supported by 5G), more gamers will shift towards mobile gaming platforms, driving the expansion of this market to over $100bn by 2022, up from $55bn in 2018.

Mobile is the most profitable gaming platform and as a result, it has driven and continues to drive innovation in games monetization. Mobile gaming has matured beyond the one-price structure of the past and many monetization options are now available.

Top 5 strategies to monetize mobile game app:

In-App Purchases / In-Game Purchases

Social games or mobile app-based games are often monetized by offering in-game purchases, sometimes also known as microtransactions. The use of in-game purchases has become increasingly popular. This monetisation model involves the sale of game play extras to users, creating an additional revenue stream. For example, the hugely popular battle royale game Fortnite was one of the highest grossing video games of 2019 despite being free to play.

Virtual goods  -an element of decoration for a virtual house, a sausage machine for a farm-  can also be offered as in-game purchases. In order to apply this kind of monetization strategy, careful thought must be given to how these goods are included into a game. The choices made when designing a game can have a huge impact on the success or failure of this business model.  This may be the biggest challenge when going for in-game purchases.

In-Game Ads

Players can enjoy a mobile game for free, while the developer earns revenue from mobile ads that show up in the game. Advertisers are also keen on showing their ads and acquiring new users. In fact, users remember in-app ads 47% of the time. That’s a good indication of their effectiveness. And a study done by Ipsos showed that 50% of users find mobile ads visually pleasing.

In 2021, the focus will be increasingly on user experience. Users don’t want to see intrusive ads or ads that are irrelevant. Moreover, if a user is assailed with too many ads, the user experience will suffer.

Reward ads like rewarded video are one of the most effective ad formats in 2021. They work particularly well for mobile games.

Mobile Ad Mediation

In order to maximize ad revenue, a mobile game publisher needs to work with multiple ad networks. However, as the number of networks grow, it becomes increasingly hard to track and manage them. This is where ad mediation comes in.

Ad mediation platforms allow you to add several ad networks and work with them all in one place. They are basically an intermediary between you, the publisher, and ad networks.

Data Monetization

Data monetization is a good alternative to in-app ads, and should rank high among mobile game monetization trends. It works particularly well for mobile games that have a high number of daily active users.

Data monetization refers to the collection and transfer of data from a mobile game to a data collector. Most commonly, data collectors are advertisers, marketers, telecom companies and the like. It’s important to note that data monetization is not about collecting personal user data. Only non-personal data such as device type, country, and screen size are collected.

In fact, data monetization works similarly to ad mediation. The more data collectors you work with, the more revenue you’ll earn.

Paid Games

While in-app purchases generally work better than paid games, this is still a mobile game monetization trend that’s worth mentioning. If you’re an established mobile game publisher with a large fanbase, paid games make sense. Minecraft is a paid mobile game, and it’s still on the list of top-grossing games in app stores.

How do free-to-play games make money?

Free games make money by selling a benefit to their players. That’s how any gaming company works. Data-Driven Gaming companies work intensively on profiling their players to know what they are interested in and offer them exactly what they want. And they’re doing this in a few different ways.

If you’re wondering how monetization works for free sites or games, you’ll get a clear answer: ads. Some games use the click model, where advertisers pay the gaming company when someone clicks on the ad. Other games use a pay-per-view model of ad revenue — meaning that every time someone sees the ad, the gaming company scores some dough.

Ads are a great source of money for games that have a ton of people playing them. But what about games with a smaller base? Another ad strategy is to promise NOT to show them. Many games offer an ad-free experience if you’re willing to pay a little bit more, and that’s great for the gaming company. It means that the user has actually paid for the game, and also that they might be willing to consider some microtransactions within it.

Microtransactions are items a player might pay for within a game to either enhance their experience with in-game features, unlock items and characters or move up to higher levels: costumes, weapons, tools, or any other item available in the game, indicating that these players will be sticking around for longer and increasing their engagement.

But only a small percentage of free-game players pay for anything in free-to-play games. But having a huge base of free players guarantees the game developer that those who are paying for the game will have an eager, acceptable pool of people to play against in multiplayer settings.

 

What’s the trend in mobile games for 2021?

According to some forecasts made by Newzoo the global gaming market will surpass $200 billion in revenue in 2023.

Mobile game forecast for 2021
Source: newzoo.com/global-cloud-gaming-report

The global free-to-play gaming market is set to reach up to $88 bn in value in 2021 and at the top of the revenue stream, mobile games are expected to generate over 75% in Free-to-Play Gaming Revenue of that amount.

Free-to-play games like Fortnite or League of Legends have increased their number of players by millions globally and free-to play games continue to dominate the global gaming industry in terms of revenue.

The increasing usage of smartphones and consoles and cloud penetration  will lead the market to a high growth in the future and 5G will drive this phenomenon. As we mentioned before, At the top of the revenue stream, mobile games are expected to generate over 75% of that amount, this means mobile games developers need to adapt to this new trend, especially in free-to-play games that will continue to dominate the global gaming industry in terms of revenue.

This panorama will make the availability of prediction tools such as Jump’s even more valuable, allowing games companies to improve their understanding of their users and create environments where players feel more engaged and are more likely to return.