Making Money Moves: Monetizing Your Mobile Gaming App

Mobile games have become an important extension of the real world, where both players and viewers interact and spend their free time. Let’s take a deep dive into mobile game monetization and explore how you can connect with your core audience to generate higher revenue from your games.

To be successful in mobile game monetization, it’s important to understand what players expect from games and how they’re willing to spend money while playing. Additionally, you need to know what tools are needed to improve your genre-specific monetization strategies. By analyzing player behavior and understanding their preferences, you can tailor your monetization strategy to suit their needs.

Newzoo’s latest market predictions show that mobile gaming, with a 5.1% increase, will generate revenues of $103.5 billion this year (53% of the market). They believe that “the market is on track for even further growth in the years to come—even in the face of challenging economic conditions”. Effective monetization strategies can lead to quick ROI and high revenues.

Mobile games generate revenue in a variety of ways, from free-to-play models to paid subscriptions. In this article, we’ll focus on monetization strategies for free mobile games. Today’s game industry users expect high-quality, free content with relevant in-game ad options tailored to their demographics.

According to Adjust, a mobile analytics company, having “multiple revenue sources” is crucial for game monetization in 2022. Diversifying your monetization strategy can help avoid the pitfalls of relying solely on a small group of high-value users. Monetization rates are increasing, but competition remains tough for publishers offering in-game purchases, mobile game subscriptions, and rewards video programs.

Statista reports that 1.8 billion people downloaded mobile games in 2021, with this number expected to rise to 2.2 billion by 2025. To create a profitable in-game economy, cross-platform game development and a diverse range of monetization strategies are a promising approach.

SensorTower calculates that subscription revenue for mobile games grew 15.1% in 2021, from $29.2 billion to $33.6 billion. 

‘Subscription’ refers to a game that can be downloaded and played for free, but a premium ad-free version is available for a fee. This monetization model usually gives access to additional game features and content as well. “Content” and “access” are two key concepts of a subscription monetization model. 

Udonis identifies the following subtypes: 

• subscription-only model 
• auto-renewable subscription (user must cancel it manually) 
• non-renewing subscription plan 
• umbrella subscription (with no focus on a single mobile game, but with cross-gaming experience. e.g., Apple Arcade $X per month for a variety of games from different publishers or Google Play Pass $X per 600 games without ads) 

Paid mobile games come with an initial one-time cost and are generally ad-free. This approach can be effective for games that have already established a reputation and have users who are familiar enough with the game to justify the fee. Additionally, some users prefer to pay upfront to enjoy their entertainment without interruptions from marketing ads, videos, and banners.

Paid games often offer improved graphics and resolution, customized control options, integration with cloud storage, and the ability to build new characters. Examples of successful paid mobile games include Grand Theft Auto San Andreas and Stardew Valley.

Both paid games and subscription models can lead to substantial revenue for publishers by eliminating “buyer’s remorse” on the part of the user. Since players pay upfront, they get exactly what they want without the negative emotions associated with overspending.

In-game video advertisements can be offered to players as a way to earn rewards, and this format has become increasingly popular because it’s a win-win for both parties.

According to TechCrunch, rewarded video ads are a statistically successful approach, with 68% of players preferring this format. IronSource has found that users who watch a rewarded video are “six times more likely to complete an in-game purchase.” These ads are interactive and engaging, and research has shown that they do not negatively impact player retention.

Players enter the game world for entertainment and fun, not to watch ads. If you’re considering different ad formats for your mobile game app, consider incorporating rewarded videos into your hybrid monetization model. You could also offer in-app purchases that allow users to buy features or items.

Udonis, a mobile games marketing service, recommends presenting in-app purchase options to users when they need assistance, such as when they are struggling to complete a level (“Stuck at the level for the 10th time? Buy an additional feature!”).

To measure the success of your in-app purchases, it’s important to look at key metrics such as:

• DAU (daily active users)
• ARPPU (average revenue per paying user)
• conversion rates
• customer lifetime value

It’s important to keep in mind that the success of any game monetization strategy is closely tied to the quality of the game content itself. Providing high-quality content can help increase user engagement and make them more responsive to in-app purchase options. This requires a skilled game development team with expertise in using state-of-the-art technologies to create and produce more game content after release.

Effective ad tracking is crucial for monitoring the success of your mobile game monetization strategy. By tracking user behavior and preferences, you can identify valuable users and tailor your strategy to maximize revenue.

Personalized advertising is more profitable and engaging for users, and can be achieved through detailed targeting using mobile device identifiers such as Apple’s IDFA and Google’s GAID. These identifiers allow game publishers to track user activity, including which games they play, which ads they view, and whether they download new games.

While Google has announced some limits on activity tracking, GAID still provides valuable insights into user behavior and preferences. With IDFA or GAID, advertisers can track responsive users across multiple platforms and channels, including games, apps, and the web. By using ad tracking effectively, you can fine-tune your monetization strategy and create a more engaging and profitable in-game experience for your users.

Game publishers can benefit from using IDFA and GAID in various ways, including:

• behavioral data analysis
• mobile game ad targeting based on previous actions
• campaign data optimization
• recognizing users suffering from ad fatigue
• retargeting options based on previous users’ responses

To successfully monetize a mobile game, it’s important to consider all available models and to choose a game development team that can help with both the initial monetization strategy and generating additional game content after release.

By utilizing options like IDFA and GAID, game publishers can answer key questions about their monetization strategy, such as:

1. Where do I find ad responsive users?
2. Which campaigns yield the highest revenues?
3. Which users generate the most revenue?

These are important considerations for any quality game publisher looking to optimize their mobile game monetization strategy.

Every blockbuster in the field of mobile games achieves high revenue thanks to a combination of monetization types. Publishers started in the gaming ecosystem without “in-app purchase” options:

• Tap Tap Revenge, which won the App Store Game of the Year in 2008, relied solely on a subscription model where users tapped their screen to the rhythm of a song.
• Super Monkey Ball was priced at $9.99 and had 300,000 downloads in the first 20 days after its release in 2008.

Mobile game publishers have shifted their focus to the freemium model, investing in an ecosystem where high-priced subscriptions and poorly presented ads no longer work.

Publishers must now focus on ad types that engage users, such as:

• Playable ads – Babbel’s outstanding playable ad piece promoted a 7-day free trial by testing users’ language knowledge in a plain gaming format with a catchy lead-in video and a CTA.
• Rewarded video ads – Futureplay achieved an 80% ad conversion and 22 ads viewed per install with rewarded video ads.
• In-stream pre-roll video ads – Wyzowl states “human attention spans are shrinking,” and identified the ingredients of a powerful pre-roll ad: it should be uninterrupted, push brand awareness, no longer than 6 seconds, targeted, and have a hook.
• Interstitial video ads – Google announced that interstitial video ads can increase ad revenue by up to 42%.
• Banner ads – a possible but less engaging option: Reddit users discussed whether banner ads in mobile games were worth it.

These ads must be entertaining to the users, just like the game itself, to increase their likelihood of response.

As the mobile gaming industry evolves, game publishers must adapt their monetization strategies to ensure long-term success. Diversifying monetization tools and combinations is key to reducing the risks of slow ROI and low revenues.

To maximize revenues, publishers should consider the following tips:

• Prioritize providing users with high-quality, fun experiences that require minimal effort and spending.
• Ads that propose in-game assistance for level completion or game challenges are more likely to resonate with players and generate higher user response.
• Playable ads are highly engaging and can significantly increase user response rates.
• A successful mobile game monetization strategy should utilize several ad types and monetization techniques.
• Understanding IDFA and GAID changes is crucial for ad revenue tracking and budget control.
• Players who respond positively to playable ads or rewarded videos are more likely to complete in-game purchases.

Mobile game users’ tastes are constantly evolving, so revisiting ad strategies on a regular basis is essential for continued success. The objective of monetization is to attract valuable users who will return and complete in-game purchases. Publishers should prioritize quality over quantity when it comes to retaining users and maximizing revenue. By following these tips, publishers can power their strategic decisions on mobile games monetization in 2023 and beyond.