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Mobile Monetization: A Study of Popular Games

by Brendon Boshell on 07/13/16 11:07:00 am

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The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
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Mobile games are monetized in a seemingly-endless number of ways. You probably have many of your own ideas and opinions about advertising, in-app purchases, virtual currencies or subscriptions. But you can also get valuable insight into monetization simply by looking at what the largest mobile game publishers already do.

Sweet Pricing has conducted a small survey on the methods of monetization employed by popular mobile games. We randomly sampled 20 mobile games that already have over 5 million downloads on Google Play Store. We then looked at the monetization strategies used in each game.

Of the mobile games we studied, 1 (5%) has more than 100m downloads, 13 (65%) have between 10m and 100m downloads, and 6 (30%) have between 5m and 10m downloads. User ratings vary between 3.4 and 4.6, with an average rating of 4.0. The games are spread over 12 categories.

The most popular monetization strategy uses both in-app purchases and advertising together.

40% of the games we looked at used both in-app purchases (IAP) and advertising together. 30% relied solely on advertising, 20% used only in-app purchases and the remaining 10% made no in-app revenue whatsoever.

Monetization Strategies Used by Popular Apps

Many mobile game publishers decide to use either IAP or advertising. But combining the two together can be a wise strategy. If your game is like most mobile games, you can expect only a few percent of gamers to make an in-app purchase. Combining IAP with advertising allows you to strike the right balance, and generate revenue from all gamers.

But if you do use advertising and IAP, it might be worth allowing the gamer to pay to remove the ads. Of the games that used advertising, only 20% allowed the gamer to buy an IAP upgrade to remove ads.

About half of all mobile games are using a virtual currency

45% of the games in our study are using virtual currencies for monetization. And, of games that use in-app purchases, 75% are using one or more virtual currencies.

A virtual currency allows gamers to purchase ‘Gold’ or ‘Coins’, for example. Gamers use the acquired currency to purchase upgrades, character accessories or plays of the game. Although the nature of the content and virtual currency varies a great deal between games, there is a common pattern that exists in almost all setups.

The most popular (and profitable) games make interaction with in-app content stores a fundamental part of the gameplay experience. The gamer’s decisions to purchase certain content directly affects the dynamic of the game. So the virtual currency is considered part of the game itself, rather than a slapped-on afterthought.

Using more than one virtual currency is also a common pattern. Some games offer two kinds of virtual currency, such as 'Gold' and 'Coins'. Typically, only one virtual currency is available via in-app purchase, while the others are available through routine gameplay. That allows games to offer exclusive content to paying gamers. Of the 9 mobile games that used virtual currencies, 5 used 1 virtual currency and 4 used 2 or more virtual currencies.

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