The mobile games market is big, but securing a slice of that pie is far from easy. Competition is really fierce. Just looking at the App Store for iOS in the US, there are 539,616 active games right now, according to Pocket Gamer. With hundreds of new titles being released every single day, developers really have to get everything right if they want to turn a decent profit.
Creating a really fun game is only half the battle. Clever marketing is absolutely vital if you want your game to stand out. But you should also take a close look at where the profit is going to come from. Choosing the right monetization model can be the difference between success and failure for any studio, and if you’re just starting out it will play a large part in determining whether mobile games development is going to be a hobby or a full time career.
Indie developers can find success, but it’s important to pay as much attention to the monetization of your game as the big companies do. It shouldn’t be an afterthought.
The dominant model in Google’s Play Store and Apple’s App Store is freemium. Games are free, but players can buy content and advancements via the in-app purchase system. A couple of years back a lot of stats were released showing just how dominant freemium had become. According to an App Annie report in early 2014, freemium app revenue accounted for 98% of worldwide revenue in the Play Store.
But before you decide freemium is the obvious way to go, there are a couple of issues. Most of that revenue is being soaked up by a handful of the most popular freemium titles, the vast majority make very little or no money at all. The model is reliant on whales (big spenders) as the majority of players never make in-app purchases. A Swrve report found that 0.19% of all players contribute 48% of revenue.
If you are going to adopt a freemium model, then you should design it into your game from the beginning. It’s a difficult thing to retrofit and it can compromise playability if it’s not integrated thoughtfully.
Games with a traditional upfront price tag might form an ever-shrinking share of the options on offer, but there’s still profit to be made here. It’s a model that simply makes sense for a lot of titles. Instead of trying to suck in as large an audience as possible, you’re trying to find a dedicated niche. That means you can develop a much more specific game, but you also have to target your core audience with the right kind of marketing. Piracy is another unfortunate downside here, but it’s very difficult to work out the relationship between piracy and lost sales.
Don’t dismiss this model out of hand, but make sure you factor in the importance of getting the game reviewed in the press and advertising it to your target audience.
A lot of developers rely on in-game advertising and it’s common to mix it in with freemium and even paid models, but you always have to consider the impact on the player. Invasive ads are off-putting, but it’s quite tricky to find good ways to integrate them on mobile. As devices and networks have improved video ads are proving increasingly successful in terms of generating revenue.
It’s best to tread carefully here and make sure you can integrate ads smoothly. Try to work out what kind of return you can expect and what impact ads might have on player satisfaction.
This has traditionally been a thorny issue for developers, but Apple is about to open up the subscription model to games in the iOS App Store and offer an improved 85/15 split (instead of the standard 70/30) for games that maintain a subscription model with a customer for longer than a year. Google is apparently going to match that 85/15 subscription model, but offer it immediately, not after a year. Gamers are used to DLC and even a season pass concept now on consoles, where they might pay a subscription to keep getting new content for a game. There’s no reason that the same thing couldn’t work for mobile games.
This might be the ideal option for developers considering a paid model, but keen on continuing to develop for and add to their game beyond release.