Deeper Dive into Monetization

In ”Monetization & User Acquisition foundations”, you explored the core concepts of monetization.

In this tutorial, you will build on this as you:

• Begin to identify the impact of monetization on player experience
• Identify types of monetization and consider which one(s) to adopt
• Consider the relationship between monetization and game design
• Explore a success case study: Castle Fusion
• Reflect on when to start adding monetization to your game and if you can add it too soon

One of the most critical things to consider when implementing monetization strategies is how they can positively or negatively impact player experience. Naturally, players do not want to be bombarded with ads that interrupt their gameplay, especially if the ad is not relevant to them.

Mobile games are one of the most high engagement mediums out there, making it even more crucial to implement monetization natively into that experience. This may include adding in-app purchases (IAPs) which allow players to advance more quickly through the game, or introducing ads which provide rewards to the player for viewing.

What if your players enjoy the core gameplay, strengthened by a monetization strategy, so much that they would feel justified in purchasing IAPs and watching rewarded ads to receive fun benefits and support you as the developer?

That is the kind of impact your monetization strategy can have on players: to enhance their experience and make them enjoy your game even more!

You will explore how to apply these methods in more detail in Free-to-Play Revenue Tactics, but first let’s review the different types of monetization.

There are a number of ways in which a game can be monetized. Some of these methods apply predominantly to Free-to-Play games, in which the game itself is free, but revenue generation for the developer occurs during gameplay. Other methods require payment from the player up front, prior to accessing the game. Here are the primary ways in which developers and publishers make money from their games.

In-app purchases (IAPs)

In-app purchases are a great way to allow users to make purchases within the context of their gameplay. This may include the ability to buy virtual currency, which can be used to acquire valuable assets to help your players advance through the game. This is a common way that many developers get started with monetization, as it is natively integrated into what the player is already doing.

Ads

Ads are the most common method that content creators use to enable their content to be consumed for free. As most mobile games are free to play, this is a very popular monetization method to generate scalable revenue without having to charge players. There are many types of ads and we will explore them in more detail in the next tutorial.

Note on IAP and Ads:

While mobile games can leverage both IAPs and Ads, it's important to distinguish between the targeted playerbase of the game. Games targeting a dedicated, highly engaged playerbase may focus on utilising IAPs, whilst games targeting a casual audience may not have any sort of IAP economy in the game and therefore would only leverage ads in order to generate revenue.

Premium Games

A small percentage of mobile games are designated as premium, meaning the player has to pay a small amount in order to access the game. This creates a barrier up front, but paying players don't have to view ads as part of their gameplay experience. This business model is typically not recommended for beginner or intermediate developers. With more and more players expecting games to be free, it now takes an extremely unique game for players to justify paying a price up front.

Subscription

Some gaming services offer a recurring subscription option, which gives players unlimited access to all games included in the service. The developer typically receives a portion of this subscription revenue, based on the popularity of their game. As with premium games, players of subscription-based games demand a higher level of quality as well as minimal or no ads disrupting their gameplay.

This course does not explore monetizing via premium or subscription-based games in detail, as they are more advanced methods.

Now that you have identified different types of monetization, begin to reflect on your own circumstances: what monetization type(s) could be right for your game?

Let’s explore monetization as game design and consider an example game to help you decide.

One of the most common missteps by developers is to plan for monetization too late in their development cycle. When this happens, monetization “trigger points” such as ad placements or in-app purchasing opportunities are often hastily forced into various points of the game. This is because the developers want to generate revenue quickly, and don’t have the time to properly consider the impact to the end user.

This causes players to leave the game, usually without ever returning. You may be wondering: How can I prevent this?

Fortunately you can prevent this through both proactive planning and reactive adjustments.

Do a competitive analysis and research to investigate what other similar games are doing, especially those which appear to be having success in their:

• App store ranking
• Volume of downloads

These games are successful for a reason, and are likely to have already applied monetization placement insights from various tests which you can emulate as a starting point. It is a good idea to focus mainly on top free downloads and highest grossing.

Your discoveries may include the stages of your game where you could deploy your monetization tactics, as well as the specific types and formats used.

If you're unsure how to start your research:

1. Go to a popular platform for games of your type
2. Search for the category which is the closest match to your game
3. Download the top three to five games ranked in that category, paying close attention to how, where, and when the game introduces an opportunity for revenue generation either through ads or IAP.

Ensure every monetization touchpoint (ads or IAP) is evaluated both for revenue and player churn (attrition rate).

Revenue

Revenue evaluation may include a summation of the revenue generated from an ad placement, along with the revenue lost from players finding the ad disrupting and not returning to the game over a certain period of time (for example, 7 days).

Ideally there is no loss in revenue due to players leaving as a result of an ad placement., If there is, consider that impact relative to the revenue gained from the ad placement itself. A marginal player reduction may be offset by a strong surge in ad revenue, and a minor drop in ad revenue can be offset by a significant increase in players playing your game.

Player churn

While increasing revenue and player retention at the same time is always preferred, it’s not easy to do so early in your game’s lifecycle.

For this reason, it is highly recommended to prioritize growing your user base in the long term. Always remember that a 100% increase in ad revenue is pretty meaningless if you have an extremely small set of people playing your game.

In order to effectively test for holistic impact, try not to change multiple components at the same time so that you are able to easily attribute the impact back to the specific change you made. Trial and error, particularly when you are just getting started, is critical in making sure your monetization efforts are not just opening a revenue stream, but are also helping to grow your game rather than detract from gameplay.

You should be able to notice quickly if a monetization tactic hurts gameplay more than it helps revenue, in which case you should continue testing different placements and formats for better results.

Now that you have discovered that you need to test and evaluate your monetization touchpoints for both revenue and player churn, you may be wondering when you can start adding monetization to your game.

Next, you'll consolidate your understanding by exploring a real game case study

In a popular fantasy-themed game, Castle Fusion by Shark Jump, players merge turrets, structures, and vehicles to generate more scrap (currency) in order to defend a tower. Scrap is then used to purchase more units or permanent upgrades at the workshop.

As the player merges higher and higher tier units, they also unlock additional maps and areas of the game.

The game features both IAP and Ads (Rewarded video & Banner). The player can opt into banner ads at any time to receive a 10% income boost.

There are also two different forms of currency, utilized in different ways:

Scrap

• Soft Currency, earned for free as players progress
• Generated over time, with the rate increasing depending on how many / what kind of towers are created
• Used to purchase new units
• Used for permanent upgrades

Gems and Souls

• Hard Currency
• Obtained from various actions and achievements
• Used anywhere that Scrap could be used to purchase

Let’s look at several monetization touchpoints in Castle Fusion:

• IAP: Currency to purchase Gems or permanent upgrades in the Marketplace
• Gem Spending
• Ads: Banner ads can be enabled for +10% income and Rewarded Videos are offered in exchange for spinning a bonus wheel and obtaining the latest unlocked unit

Let's look at some of Castle fusion's monetization touchpoints in more detail:

• In The Market, players have the opportunity to watch an ad in exchange for spinning the bonus wheel and accumulating currency
• In The Forge, players can make purchases of new units for scraps or gems
• In The Workshop, players can purchase permanent upgrades
• In The Tavern, upgrades can be purchased allowing players to advance more quickly through the game

Some of Castle Fusion's monetization touchpoints

Castle Fusion exhibits an excellent strategy of leveraging both ads and IAP, while also ensuring that interaction with both sources are designed to make players more engaged in the game over time.

Time to sit back and reflect on your game:

1. What's the advantage of offering opt-in ads?
2. What's the advantage of offering multiple types of currency?

If the word choice came to mind, you are right in thinking that offering different choices to your players engages them more and also ensures little intrusion in their gameplay. As discussed previously, the more engaged your players are, the less they will churn.

Now that you have explored a real-life example, you may be wondering when you can start adding monetization to your game. Let's hear what the experts have to say about this next!

Would you like to hear more from an expert? Watch Cathal and Illya, both Unity monetization experts, discuss these questions:

1. When should I start adding monetization to my game?
2. Can you add monetization too soon?
   

In this tutorial you have identified the impact of monetization on player experience, types of monetization, considered the relationship between monetization and game design, explored a successful case study and reflected on when to start adding monetization to your game.

In the next tutorial you’ll:

• Compare different types of advertising
• Compare three types of IAPs
• Explore how to combine and balance ads and IAPs
• Explore how to measure the success of your monetization efforts
• Reflect on how ads and IAP can interfere with retention numbers