I initially published this post in my personal blog Quarterview.com. Check it out to learn more mobile gaming techniques, analysis, and industry opinions.

Are you ready to level up your mobile app monetization?

Context:

In October of 2011, an article about how DeNA leads Japan's mobile gaming market included a number of key monetization insights:

My point is that this article and other similar reports about Japanese mobile games should have alerted us that a whole science behind game monetization existed that we, outside of Japan, were very unfamiliar with. Further:

Example Mobage (DeNA) Card Battle Games in Japan (Gundam Masters, Final Fantasy Brigade, and Sengoku Collection):

In fact, Kenji Kobayashi who was interviewed for the article specifically calls out Zynga for not really knowing how to do monetization well.

It's no accident that the highest monetizing game in the world right now is from Japan: Gungho's Puzzles & Dragon that reportedly generates $4.9M per day in revenue.

So what are we missing and how can we catch up? I can't claim to know all of the secrets but I'd like to try to help you get on the right track with this blog post series (to be separated into 3 parts).

Let's go... :-)

12 Key Mobile Monetization Concepts:

This series of blog posts will discuss 12 monetization concepts that can help you design monetization into your mobile application better. These concepts have been framed from the perspective of a mobile game but I believe many of these concepts can be applied to any mobile application.

Further, I have divided up the 12 concepts into 3 levels of mastery to help organize the blog topic content into the associated 3 blog post parts. I will write about 1 mastery level per post.

The 12 Critical Monetization Concepts by Mastery Level:

#1. Mechanics Design

A mobile game's monetization mechanics should be considered from the very beginning. Further, there should be a clear idea of what the monetization mechanics in the game are and at least a strong hypothesis of how well the mechanics will monetize.

Key Question: Based on the type of game (or app) you are developing, do you believe the key monetizing mechanics will monetize enough to be successful?

A useful tool to analyze this is an ARPDAU contribution table which I have written about: here.

The point of this concept is to make clear from the very beginning whether your game even has a chance at success given that the mobile gaming space is one of the most intensely competitive markets in the world.

#2. Engagement over Monetization

With this concept, a game needs to always prioritize engagement and user retention over monetization. In this view, you must be able to get a user hooked into the game and repeatedly playing the game before you can easily monetize them.

Just as drug dealers give free samples to hook users before making them pay, engagement must be established prior to monetization.

However, I do have two reasons for sort of hating this concept: 1. This concept has been adopted by the usual industry conference speakers and other "pundits" and repeated ad nauseum and 2. Too many mobile game developers use this as an excuse not to carefully think through game monetization and rationalize poor game performance.

In using this concept, your mobile game launch strategy should carefully stage the implementation and execution of various monetization features carefully while prioritizing engagement and retention. Hence, higher risk monetization features or events should be gradually introduced and engagement/retention features implemented first.

Monetization and Retention are the Yin and Yang of LTV (life time economic value of a user) but that's not to say that one doesn't come before the other.

#3. Shop Volume & Monetization Capacity

It's amazing how some games do as much as possible to not take your money. Once your shop has been designed, try to perform the following exercise:

Go into the shop and purposefully find ways of spending money.

"Shop volume" speaks to the potential for your shop to monetize users based on the breadth (types) and depth (number, repeatability, and quality) of products in the shop.

How big is your app's Shop Volume?

Note: Even if the shop only sells one type of item or even one item, so long as that same item can be monetized a lot (or even better infinitely) then Shop Volume should be considered high.

An associated concept with Shop Volume is the concept of "Monetization Capacity". This refers to the ability to continuously sell more hard currency items to the user without materially disrupting the game balance or economy. I believe the usual Japanese mobile game company suspects refer to this as "Unlimited Monetization Potential" and is a key characteristic of card battle games using Gacha Fusion.

In the above diagram, you should be able to continue to sell an unlimited amount of hard currency items while maintaining a power gap within acceptable game levels. Game balancing is outside the scope of this article but does impact monetization in that without proper game balance, monetization limits will manifest. Power gap is maintained by various methods such as: 1. logarithmic power growth, 2. multiple upgradable units (e.g., card battle decks with multiple upgrade paths required), 3. user power matching in PVP, etc.

An optimal power gap level is one in which you maximize monetization while minimizing user disengagement (and especially rage quitting which is then difficult to do user re-acquisition for). Acceptable power gap levels are typically defined by an operations or monetization group to set KPIs of user disengagement.

#4. User Flow

User Flow refers to a user's activity path within a game. The core idea of this concept is to embed monetization points within a user's set of activities. Whether within the core loop or whatever other activities the user engages in, you should design monetization calls to action where the user actually goes in app.

The point is that we cannot just rely on the user to tap within shop to monetize the user.

See the examples below:

Example #1: Candy Crush Saga (Core Loop Flow Pre-game Boost)

Here, the King.com guys built a monetization point directly within the core loop prior to starting any game.

Example #2:  Mino Monsters (Character Profile Flow Upgrade Option)

As users browse their character they are presented with upgrade options for hard currency.

Example #3: Final Fantasy Air Brigade (Loot Drop Conversion in PVE Flow)

In this example, users are presented with a monetization mechanic that randomly occurs within the PVE flow. Users are presented with the opportunity to guarantee a loot drop by paying hard currency for a special feed (in this case the Vomp Carrots which are purchased via hard currency).

In summary, as all three of the examples show, we must intercept the user within their User Flow to give the user as many opportunities to monetize as possible.

Conclusion

In conclusion (for now), I hope you have now mastered the first level of mobile monetization mastery.

Prepare for gaining an additional level of mobile monetization mastery upon my next blog post. :-)

Until then...