You have created your game, it looks fantastic, you have fallen in love with it, and your friends like it but now the question is, how can this game make you money? how can this game give you a return on all the time/costs you have invested so far?
Lots of game devs leave so much money on the table by not monetizing their game in the right way others overdo this step and end up losing players, this is why it's very important to integrate monetization plans right from the beginning so that it feels like its part of the gameplay rather than a layer slapped at the end before launch.
In this article, I will share with you my experience with game monetization, what are the types? and what I think is the best method that yields the biggest results without driving your players crazy.
Check out this article on The Game Development Process
Types of Game Monetization
There are many ways to monetize your game today I will take you through 2 of the most popular ways:
- IAD (in-App Advertising)
- IAP (in-App Purchases)
IAD (in-App Advertising)
Of course, the easiest and most straightforward way, put ads in your game while it's true that it's very easy but if done in the right way it could be integrated in a less aggressive way.
IAD is most popular with indie game developers/Hypercasual games market, the idea is the more users you have the more money you will make from ads.
For example, if you know beforehand that you will monetize with ads then you can plan the layout of your game to have space for Banner Ads that it's not horribly slapped on UI buttons.
Benefits of in-App Advertising
| Pros | Cons |
| Easy to install | Players hate ads |
| Less planning involved | Revenue fluctuates based on ad rates and seasonality |
| No need for Balancing | You need a huge amount of players to make life-changing money |
Types of in-App Advertising
Banner ads: those are the ads that are always shown when you play the game they can be a rectangle at the bottom of the screen or on top.
Interstitial ads: now those are the most famous ones, those are full-screen ads that you see and you wait until the "X" appears somewhere on the corners so you can press it and get on with your life.
Reward Videos: I personally like those as they give the player the choice, these ads are videos ads that appear as buttons, they offer the player a bonus or extra time or an extra life only if they watch the video ad, so the player has the choice to either click or skip.
Best practices for implementing ads in games
If you choose in-App Advertising as your monetization method, it is advisable to plan for this method right from the beginning, to make well-defined areas for Banner Ads, to insert reward videos where you think the player critically needs them, and to keep the obstructing Interstitial Ads to a minimal.
IAD (In-App Purchases)
This monetization method is harder to implement and plan as this needs to be implemented right from the beginning of the design process, but its the most lucrative and integrated way of monetizing your game.
IAD is when you implement in your game things that the player can purchase to enhance his playing experience or to make it faster. Let me give some examples of In-App Purchases:
- Consumables (Energy, Extra Lives, Additional Moves, Speed ups)
- Non-consumables (Fashion Kits, Pets)
- Subscriptions
As you can see all of those types need to be integrated into the gameplay experience right from the beginning and that's why In-App Purchases require more work and more effort.
Benefits of In-App Purchases
| Pros | Cons |
| Huge Profit | Needs a lot of planning |
| Great gameplay experience | Has to be balanced |
| Ability to earn more profit by making bundles and special offers. | If overused can be very annoying to the player |
Best Practices for Implementing In-App Purchases
It's very important while creating your game with In-App Purchases in mind to not turn everything in the game into something the player has to buy, I know its something lots do but you have to keep in mind that your game needs to be able to be played with a player that doesn't want to spend a dime.
Give paying players a heads-up on other non-paying players that's fine, but do not block the non-paying player from playing the game just because he didn't purchase something.
also please keep in mind that only 4% of FREEMUIM game players actually pay while playing games.
Check out this course on Game Monetization - Link Here
Game Metrics For Monetization
There are some game metrics that you probably heard several times if you are in the game industry, these are critical ones that affect the continuity of the game.
Nowadays almost all games buy players with UA (user acquisition) which is handled by the marketing department, but for money to be spent some metrics (KPI) need to be met before the money is invested.
Remember it's always about Return on Investment, put 1$ how much will I get back? if I get less than a dollar I just lost! if I made a dollar I broke even, I would need to make more than 1$ to prove to be profitable.
Let's take a look at some of the most important KPI's to keep in mind:
Retention
Probably the most famous one, Retention is the percentage of how many users keep playing our game. Usually, D1 (day 1) and D7 (day 7), and D30 (day 30) are measured and studied.
So let's give an example on day 1, out of 100% of users who downloaded our game how many remained to play our game, and the percentage varies a good retention would be from 35% upwards, usually games get canceled if they have less than 20% retention.
Importance Of Retention In Game Monetization
Yes retention might like just a number but it actually goes deeper than that, if a certain game has a low retention number this could mean:
- Users are dropping for a technical issue
- Users are bored to death with tutorials or whatever games cram at the beginning of the game
- Users are not enjoying the gameplay
It's very important not to jump to conclusions quickly and also not to be emotionally attached to a game even if you worked on it for a long time.
Learn about the difference between Hyper Casual Games and Casual Games in this article.
Testing with Data analysts to why retention is low, creating an FTUE (first-time user experience), and inserting trackers at each beginning stage to understand where the players are dropping off, all of these are ways to find out what is the problem.
Strategies for Increasing Retention
If your retention number is very close and you just need to give a small push then there are certain strategies that you can take to give you that final push, I will mention only the most famous and effective ones:
- Events: Probably the most effective, keep in mind that players always want new exciting things to look forward to, and if your game can give them that they will for sure keep visiting your app.
- Daily Rewards: Good old spoiling your players to stay, always works but of course don't overdo it.
DAU (Daily Active Users)
It's the number of players actively playing your game on a daily basis.
ROAS
Return on advertising Spend, this metric measures every dollar spend vs revenue made this number is critical for the marketing department to determine if the money invested in buying users is yielding enough return.
In order to calculate this value this equation is used:
ROAS = revenue of ads / Cost of ads
ARPDAU
This metric is short for Average Revenue Per Daily Active User and this measures the average amount of money made on a per-user basis.
Conclusion
Game monetization is a critical step in the launch of your game, therefor it should be present right from the pre-production stage of your game, it should be integrated seamlessly into your game and balanced so you can make the most money from each player you get without loosing any of them.
Personally, I always root for In-App Purchases because the reason is, its return potential is infinite you can make huge returns and you're not bound by ad seasonality.
In addition, In-App Purchases integrated with the core gameplay so well that players themselves choose to pay money to get ahead or compete with their friends unlike with ads where the player is forced to watch an irrelevant ad to continue playing which negates the whole idea of playing game for fun.