Mobile Game Monetization: Models, Tracking Tools, and Strategic Insights

Mobile games have become an important extension of the real world, where people interact, spend money, and arrange free time for fun activities. In the blog, we provide insights into mobile games monetization, which can be helpful to generate the highest revenues from your games.

Knowing what players expect from games, how they are ready to spend money while playing, and what tools are needed to improve your genre-specific monetization strategies will lead you to higher revenues and publishing more top titles.

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”. Publishing successful mobile games in the coming years and utilizing mobile games monetization strategies will lead to a quick ROI and high revenues.

Mobile Games Monetization Models to Consider

Mobile games make money in a variety of ways. Mobile games can be free-to-play and others are paid (e.g., a subscription). Here we’ll focus on monetization strategies for free mobile games. Today’s game industry users expect free, quality content with built-in ad options relevant to the game and user demographic.

Adjust, a mobile analytics company, stated the importance of “multiple revenue sources” for game monetization in 2022. Making a diverse game monetization strategy helps avoid the trap of relying only on a small group of valuable users. Monetization rates are growing, but the competition is still hard for publishers who offer in-game purchases, mobile game subscriptions, and participate in rewards video programs.

According to Statista, 1.8 billion people downloaded mobile games in 2021, and this number is expected to grow to 2.2 billion by 2025. Cross-platform game development and diverse monetization strategies are a promising approach to creating a profitable in-game economy.

“Pay to Play” Formats of Mobile Games Monetization

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)

“Pay to Play” Formats of Mobile Game Monetization

Paid mobile games have an initial one-time cost and generally have no ads. This strategy can be good for games that have already made a name for themselves where users are familiar enough with the game to justify the fee. Some users would also prefer to pay in advance to have their entertainment uninterrupted by marketing ads, videos, and banners.

Some key features of paid games are improved resolution and graphics, customized control and game mechanics offers, game integration into your cloud storage, and the ability to build new characters. Grand Theft Auto San Andreas and Stardew Valley are good examples of this.

Both subscriptions and paid mobile games lead publishers to substantial revenue performance due to the absence of “buyer’s remorse” from the user’s side. Players have an upfront cost, so they get what they want without the negative emotion of overspending.

Rewarded Video As a Prompt for a Player Ad Response

Under a variety of game products on the market, the burden of the pieces of the ad appeals to the players from everywhere. So, this is why the players are more likely to react and respond with an action to the ad videos promising some reward.

Popularity of mobile games ad formats among developers in 2021

TechCrunch shared the statistical success of rewarded video ads: 68% of players prefer this ad format. IronSource calculated that users that watched a rewarded video are “six times more likely to complete an in-game purchase.” Rewarded video ads are interactive and engaging, and studies show that they do not negatively affect player retention.

People escape into the game metaverse for fun and entertainment, not to watch ads. If you’re contemplating several ad formats for your mobile game app, try including rewarded videos in your hybrid monetization model. You might also consider including in-app purchases allowing users to buy features or items.

Ads and in-app purchase monetization mix

In-App Purchases Option to Reach Higher Monetization Efficiency

Players can face in-app purchases at any moment in the game. But Udonis, a mobile games marketing service, recommends a purchase when a user needs assistance (“Stuck at the level for the 10th time? Buy an additional feature”). The following metrics are helpful in estimating your in-app purchase monetization success:

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

When dealing with any technique of mobile games monetization, consider that the more qualitative additional game content you propose, the more responsive your users will be. That is why make sure your game development team has the necessary expertise, uses proven technologies, and can produce more game content after the release.

Ad Tracking and How It Contributes to Mobile Games Monetization

Ad tracking is essential and helpful in monitoring the efficiency of your monetization strategy. It is crucial for targeting more valuable users and understanding the type of content that captures their attention. Once you identify responsive users, you can utilize ad tracking to fine tune your monetization strategy to fit your ideal user profile.

Ad tracking options make personalized advertising more rewarding and profitable. Detailed targeting comes from mobile device identifiers, including IDFA from Apple and GAID from Google.

Apple’s IDFA stands for “identifier for advertisers” and is an alternative form of commonly known “cookies”. Game publishers can see that the user is playing game A, viewing the ad of game B, and whether they download the game.

GAID (Google Advertising ID) enables anonymous user ad activity tracking on Android devices. And even though Google announced some limits for activity tracking, it still contributes to understanding users’ behavior, tastes, and reactions.

Thanks to IDFA or GAID, advertisers can see responsive ad users and track them through games, apps, and even the web.

Ad Tracking

IDFA and GAID assist game publishers through:

  • behavioral data analysis
  • arranging mobile games ad targeting based on previous actions
  • adding campaign data for better optimization
  • helping to recognize users suffering from ad fatigue
  • retargeting option based on previous users’ responses

It’s prudent to know and understand all available models before implementing your game idea. When you choose a game development team for outsourcing, think about monetization strategies from the very beginning as well as about generating additional game content after the release.

All options mentioned above contribute to answering the TOP-3 questions in game monetization:

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

These are the questions every AAA-quality game publisher is striving to answer first while planning their mobile game monetization strategy.

Inspiring AAA-quality Mobile Games Monetization Insights

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: users tap on the screen to keep up with a song (3 million downloads, App Store Game of the Year 2008, and only ‘Subscription’ monetization model offered)
  • Sega’s Super Monkey Ball: 300,000 downloads in the first 20 days after publishing was priced $9.99 (2008)

Now, mobile game publishers work and invest in a freemium-model-oriented ecosystem. High-priced subscriptions or poorly presented interfering ad pieces do not work anymore.

  • Publishers should focus on the following ad types:
  • Playable ads – Babbel developed an outstanding playable ad piece to promote a 7-day free trial and push to subscription. They created a catchy lead-in video, then proposed to test users’ language knowledge in a plain gaming format, then ended with a CTA.
  • Rewarded video ads – Futureplay utilized this ad format to perform an 80% ad conversion and achieve 22 ads viewed per install.
  • In-stream pre-roll video ads – Wyzowl states “human attention spans are shrinking,” and knowing this, they 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 (something attention catching).
  • Interstitial video ads – Google has announced this ad format is able to increase your ad revenue up to 42%.
  • Banner ads – a possible, but not too engaging option: here, Reddit users discussed whether banner ads in mobile games were worth it.

Users are unlikely to respond to the ads unless they entertain them as the game itself does.

Power Your Strategic Decisions on Mobile Games Monetization in 2022

Last year showed us that, by diversifying your monetization tools and combinations, you decrease the risks of slow ROI and low revenues. While planning new top titles for upcoming release, consider the following tips:

  • Users are looking for a high quality, fun experience with less effort and spending.
  • Players are more likely to react when the ad proposes in-game assistance (help for level completion or game challenges).
  • Playable ads are more engaging and generate higher user response.
  • To succeed in mobile game monetization, utilize several ad types and monetization techniques in your strategy.
  • Knowing IDFA and GAID changes is essential for ad revenue tracking and keeping your ad budget under control.
  • If a player responds to playable ads or rewarded video, they are more likely to complete an in-game purchase.

Mobile game users’ tastes are constantly changing, revisiting your ad strategy on a regular basis is essential for an efficient monetization plan. The objective of monetization is no longer to sell more subscriptions, but to attract more valuable users; players who will continuously return and complete in-game purchases. Quality over quantity is the name of the game when it comes to continued success in the mobile gaming world.

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