Monetization on Mobile Discussion

I'm trying to keep up to date on Monetizing on mobile games, and still thinking about which route to go for my main project. Reading up on some of the latest data it seems like IAP is the way to go. At least according to some of the articles I've read lately.

For example this one.

http://marketingland.com/app-purchases-dominate-ads-app-store-lifetime-revenue-hits-71-billion-183953

[quote:1rn3rova]Only 5 percent of app users make in-app purchases, yet they drive much more publisher revenue than app-based advertising.

Personally I totally despise ingame ads. Being an avid mobile game player, for me ingame ads is synonymous with low quality games most of the time. Yes, there are a few ad-monetized games that are pretty good, but they usually have an IAP option to remove ads. But most of the time... games with ads are of pretty poor quality, and it seems like the only reason people are playing them are because they are "free". (Not all games, but many)

It seems like payed games, and games that use some form of IAP model usually are of much higher quality, and according to the article above, they still earn a lot of money. I don't know why developers chose to put ads in their games, as for me, they can sometimes ruin the experience and give an overall "cheap" impression. But this article tries to look why some developers choose ads as a monetization model.

http://www.businessofapps.com/ads-versus-app-purchase-revenue-battle-ads-falling-behind-2016/

Most developers see it like this:

[quote:1rn3rova]Ads are seen as a necessary evil, and not used as a way to engage players

It's seems like they are not confident enough in their game or product, so the only way to earn money and get a higher number of downloads is to release it for free, with ads. I'm not sure though, but according to my own observations after playing hundreds of mobile games, it seems that AD based games, are generally of poor quality, and are slapping on this monetization model to attract "free" players. It's like they would rather have 100.000 free players, that play only because it's free, than 5% of those genuine customers.

Just speculating here, but any one else come to the same conclusions or a different one?

I'm not bashing all Ad-based games, It's just a general observation, that they are usually of poor quality, or you use AD based monetization because you intentionally want to attract a certain type of "free" player, that don't usually pay for their games.

What monetization model are you going for and why?

I would love to see some numbers here too. My next game release is also mobile first, and I need to figure this out pretty soon so I can design around it.

I would love to see some numbers here too. My next game release is also mobile first, and I need to figure this out pretty soon so I can design around it.

Well it kind of depends on what game you want to make. I don't think you should design the game around a monetization model, it's better to pick one that fits the game.

From what I've read also.

1. Pay once - This model most profitable for short mobile games. Games that doesn't have much replay value, that you play once then done, and that you can finish pretty quickly. You might get fewer downloads, but what you earn from sales is far more than you would from any advertising.

2. Ads - This model is usually most profitable for games and apps that people play often or daily, during longer periods, in games with a lot of replay value or that are constantly updated, because players will continue to generate a lot of impressions, during a longer time.

3. IAP - Is a tricky one. I think it's the hardest one to pull off, but if you do it right and can generate some ingame need this model can work really well. But I guess it takes a lot of planning and designing the ingame desire to pay for those IAP's. Candycrush, wait or pay, Crossy road, pay to get access to funny/special characters faster, etc etc. The games that pull this of best are games that you still can play for free, but impatient people will sometimes like to pay to progress faster and continue playing, or get access to special items etc.

tunepunk,

Thanks for the insight, and I think you are spot on. All of my experience is with non-game mobile education apps, released in 2012-2014:

App #1 was a traditional iPad-only app for a niche education market (high school physics), sold 1400 copies over three years for $5 each, was promoted by Apple, and made $5000 in sales from 2012-2015.

App #2 was a free iPad-only app with two in-app purchases. It was a classroom collaboration tool that required a server backend. It was not promoted by Apple, was downloaded about 1000 times, and made $10 in sales From 2013-2015.

App #3 is a free circuit simulator app for classroom use built in Construct 2 with poorly targeted Admob banner ads. It has had about 200,000 downloads total between iOS and Android since its release in 2014, and has made $0.67 in ad revenue.

I have been really disappointed by the ad monetization model. Poorly targeted ads have made essentially $0 in my case. Based on my own limited data, the only way to make any money at all is to invest a ton of time making a great, polished product, and selling it for more than $0.99. Then again, based on the 1300 hours I spent in development of the first app, I earned about $3/hour, so it certainly wasn't worth the time financially.

App #3 is a free circuit simulator app for classroom use built in Construct 2 with poorly targeted Admob banner ads. It has had about 200,000 downloads total between iOS and Android since its release in 2014, and has made $0.67 in ad revenue.

That sounds very little. I guess you were using pay per click ads, and not based on impressions? getting payed per impressions is certainly the way to go, as I don't know any time whatsoever I have ever clicked on a banner, unless accidentally. Ads can work but needs to be based on impressions and be used in an app/game that people use daily/or very frequently to be profitable.

But I don't really like CPM also. On average maybe you get 1$ per 1000 impressions, so In order for you to earn 1$ from 1 user, that one person has to see see 1000 ads. Very bad payout in my opinion. Interstitials pay a bit more, but still only maybe 2-3$ per 1000 impressions. That would mean 1 user has to view 1000 Interstitial ads for you to get a lousy 2-3$.

If you're lucky and design a good game that people play often on a regular basis and strategically place ads that the user will see often, MAYBE you will earn a few cents per user :p

My own personal opinion is that i really dislike ads, low payout and I don't want crappy annoying ads and banners all over the game. But maybe I'm forced to use it as it would fit my current project best... we'll see..

i like the way some games like Nitrome games, let you get some gold by watching ads, those ads are the best paid.

They also give you a continue or extra life if you watch them. I thinks that's a good way of letting players buy your content gradually.

Old topic so kinda sorry to bump it, but i think this is a really interesting theme to have been put aside.

If others join the conversation too, i think we can have a really good discussion about pros and cons of each type of monetization, share general tips like content or market-wise.

I'll start by contributing with 3 videos i watched yesterday and giving my overall idea/opinion about the topics.

1) How to Design In-Game Purchases

2) Monetize: The Seven Deadly Sins of Game Monetization

3.a) Doing Free to Play Wrong - How Bad Monetization Harms F2P Games - Extra Credits

3.b) Microtransactions - What Does Good Monetization Look Like? - Extra Credits

MY (read, PERSONAL) opinion on those videos:

Of those 3, i think the most professional and "tip-giving" video is the number 2. I think the mistakes shown are really on point and the strategies shared seemed organic and not so much intrusive.

Number 1 is kinda "ok-ish". Few useful tips but i really hate the way the presentor said it was ok to have "god like" mode on the games. I mean, i know he was being generic and not saying games do need god mode purchases, but the way he put it, that he expressed himself.... "No can do" for me.

Number 3 is the video (i know, two vids... but consider it as only 1 giving pros and cons) that i liked the most. "Maybe" (i know this is the reason, so the "") because this is the way i think too, but that i also think that doesn't hurt players at all. Whoever wants to (and/or can) spend will be spending, whilst not having that huge advantage above f2p dudes. Heck, f2p dudes are needed as much as paying users, and those videos showed this. I REALLY liked how he said exactly what i think but couldn't put on paper: It's ok to sell a convenience but not power. Simply and straight.

By the way, i'm with OP: really hate ads. I know it's a way to earn too, with the impressions or an IAP to remove them, but i share his concern that it gives a "cheap" feeling to the game.