A free-to-play (FTP) business model allows users to download games without paying up front. In order for game publishers to see revenues from non-paying users, they need to monetize games with in-app purchases or ads. With the costs of user acquisition continuing to skyrocket, the trick to successful monetization is to introduce it without compromising gameplay quality. Here is how to do it.
- First of all: Get your users hooked!
Getting users engaged from the get-go is crucial in earning their loyalty and building a base of enthusiastic fans. Reel them in first by getting them to love your game during those critical first few days. You can do this by offering a great tutorial, for example, and providing faster game loops and quick achievements during the first levels of the game. The longer users stay with your game, the better the chances are of monetizing them. Only once they are hooked should monetization options be gradually introduced. Earlier than that, you risk forfeiting their trust and turning them off the game altogether.
- Establish your game economy
The economy of your game is the core of its reward structure. F2P games generally include a dual-currency mechanism, allowing users to advance within the game using both real-money currency as well as in-app currency that is earned through in-game achievements, user actions, in-game ads, offer-walls and in-app purchases. Rewarded video ads that are fun to watch are a hot revenue generator: They boost user engagement by giving them access to in-app currency in exchange for watching a short video ad.
- Implement multiple monetization options
You should have more than one way of monetizing your game, giving users a choice of currency type to spend. Offering different currencies not only makes your mobile game more stimulating, but also provides your users with extra ways to spend time in your store. Be aware, however, that by offering only hard currency in your game, users are jerked out of fantasy land to delve into their pockets to get the prize. This, along with the fact that only about 2 percent of users are willing to spend real money, means your chances of success plummet.
- Target and Know their mindset
Every player is different: You need to build the right experience for each one in order to keep them loyal and increase their LTV. A 15-year-old would be seriously annoyed to be presented with an ad for diapers. Targeting the user’s age/gender is not everything, however, when it comes to games. Not only do they play for different psychological reasons (some are social players, others competitive or occasional) they also react differently to ads according to their progress within the game. This means that you need to track your gamers, respect their preferences and identify when and when not to show an ad to a user.
- Timing is everything
Pinpoint those stages in your game where the momentum created is at its peak — not too early, as you will “dis-convert,” not too late, as you will “miss-convert.” You have to leverage the exact right moment. When a user is engrossed in the game and is receptive to watching a short video ad to get an in-game reward that will move him ahead (e.g. a bridge before a jump) − that is the golden opportunity.
The mobile gaming industry saw $29 billion in revenues in 2015 and it is expected to grow to $45 billion by 2018. While more than 90 percent of iOS App Store and 98 percent of Google Play game revenue is currently attributed to freemium-based apps, only about 2 percent of FTP gamers actually convert to paying users. Game developers are therefore turning more and more to successful monetization solutions, particularly rewarded video ads, to increase user LTV and profits.