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In-app purchases really are most effective for mobile game monetization

In-app purchases really are most effective for mobile game monetization

April 15, 2014 | By Christian Nutt

Mobile developers consider in-app purchases of digital goods to be the most effective form of monetization for games, and they're also most likely to use them to monetize their games.

That's according to a new report released by VentureBeat Intel, which collates data taken from 176 developers and over 1,000 games.

In-app purchases of digital goods scored the highest across the axes of "more cost-effective for the effort" and "popularity on survey" when VentureBeat ran the data. Interstitials, banner ads, and video ads also scored highly for both popularity and effectiveness.

When that data is presented another way, though, it reveals that certain monetization methods are less popular but also effective: text walls, "app walls," or in-app promotion of other apps, and offer walls, which give players the option to accept an advertising offer which generates revenue for the developer.

Premium paid downloads -- as a method to make money out of mobile games -- is now squarely in the "less popular, less effective" quadrant. This comes as no surprise, as free-to-play now accounts for 81 percent of U.S. revenue on Apple's App Store, and more internationally.

The data isn't always clear-cut, however. Banner ads appeared on both the most and least effective lists, at 4th and 1st places, respectively. The report puts that down to the fact that that they work for some games but not others, depending on how much screen-space the game requires.

Also interesting is the fact that Google was selected by developers who responded as the top monetization platform -- but it's also probably the default option used by smaller developers who don't have time and effort to use other, potentially better options, the report argues: "small developers are cheating themselves by not using multiple monetization strategies from the top companies who are winning larger shares of ad revenue per user," it warns.

The full report, which stacks multiple monetization platforms and methods against each other to see which is the most effective, is available now from VentureBeat Intel -- for $499.

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