Developing a mobile game is not just about designing environments and creating increasingly challenging levels. It’s an investment. The creators put in their effort, skills, time, and funds, and expect the game to return more value than they invested. This profit will make up for what they spent in creating the game, provide them with the necessary funds to improve their product, and develop more games in the future.
However, profit doesn’t come by itself. Actually, a team is in charge of ensuring profit, or more precisely, user acquisition and monetization (UAM). User acquisition involves how much you’re going to spend to get a user to download and play your game. At the same time, monetization focuses on how you’re going to make money off this user’s activity. We’ll leave UA for the second part of this series (coming soon) in order to concentrate on monetization.
Note: If you’re stuck on a technical term, take a quick look at our mobile game marketing cheatsheet to learn all about it
What is monetization?
Monetization relies on maximizing the user’s lifetime value (LTV), meaning the average revenue that each user will provide throughout their entire lifetime within the game. To maximize this revenue, developers need to optimize monetization. For this, publishers like us use various monetization methods to ensure games are profitable.
There are two principal ways of making money off a Hypercasual (HC) mobile game: in-app purchases (IAP) and ad revenue through in-app advertising (IAA).
They’re usually divided into three categories:
- Consumable: They aren’t directly used in the game experience but can improve it or accelerate it, or be saved for later use inside the game (currency, boosters…)
- Non-consumable: They directly affect the game experience, such as skin packs, loot boxes, new environments, playable characters, or the usual “Remove Ads” option.
- Subscriptions: Mobile game subscriptions are becoming more popular, and a lot of games are adopting the “Season Pass” strategy that unlocks the game or its premium features.
However, HC game developers don’t pin all their hopes on IAP. In fact, they represent only about 5% of revenue in HC games.