If you’ve recently taken a look at the app store, you’ve likely discovered an undeniable truth: games are dominating the mobile app economy. According to mobile market research firm App Annie, 33% of all worldwide downloads are now gaming apps, due in part to the rise of hyper casual games. 74% of all consumer spend on the app store is being driven by games, and 95% of those purchases come as in-app purchases (IAP) vs. paying outright for the app itself. But IAP isn’t the only option for games monetization: ad revenue is increasingly important for some game genres. For example, AppsFlyer reports that while in midcore and strategy games, 70% of all revenue still comes from purchases, in-app ad monetization is a stronghold in casual games with a nearly 60-40 split favoring ad monetization versus in-app purchases. AppAnnie also notes that 60% more apps are expected to monetize through ads in 2019. And, as app discovery becomes more competitive and more publishers turn to paid user acquisition, the value of ad monetization increases. So how can gaming app developers best approach monetization for these popular apps, and what should drive their monetization strategy?
Here are key monetization models to consider when it comes to generating revenue from your game, covering both advertising and paid options in-app.
1. “Freemium” model:
In the “freemium” model, the game itself is free to play and additional premium features can be accessed via in-app purchases. In-app purchases might include additional lives, additional time, unlockable characters, levels, extra in-app currency, or even to remove ads entirely. On the ads side, this model presents a great opportunity to serve rewarded video ads to users who aren’t willing to pay. As the name implies, your user will receive a reward in the form of in-app currency (such as in-game coins or extra lives) in exchange for watching an opt-in video advertisement in full, and this translates to real-life ad dollars for you.
2. Subscription model:
Consider offering a subscription to your app for purchase. This evolving form of game monetization gives users the ability to access your game for a recurring (weekly, monthly, or annual) fee. This works particularly well when you consistently have new game features or content to unveil.
3. Freemium and subscription model:
Another option to contemplate is a hybrid freemium + subscription model, where users have the opportunity to receive extra in-app currency (such as coins) on a recurring basis (daily, weekly, etc.) when they subscribe to the app. To provide value for the user, the subscription should provide a “bonus” amount of in-app currency — more so than they would unlock via one-off in-app purchases.
4. Ads-supported model:
While rewarded video is a natural fit for your gaming UI, you may also consider including fullscreen ads between game levels, or banner ads at the bottom of the game interface as your users might find these types of ad placements less invasive and disruptive than other ad formats.
Gaming app developers have a number of options when it comes to game monetization, especially as it relates to in-app advertising opportunities. Gaming is an integral mobile category, and, as App Annie reports, advertising is playing a growing role in driving revenue and helping games monetize. When you’re ready to get started with in-game advertising, we’re here to help: MoPub’s flexible network mediation solution, our leading mobile programmatic exchange, and years of expertise in mobile app advertising helps publishers to maximize their ad revenue and control their user experience.
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