Hybrid Monetization Trends for Gaming Apps
Now digital games consumption is primarily driven by mobile games so it is increasingly becoming the world’s preferred form of gaming, and central to a robust cross-platform experience. According to the new research by Data.ai in 2022 mobile gaming will surpass 60% market share in annual global consumer spend — 3.2x the size of the next largest form factor: Home Console Gaming.
The rise of subscriptions also has implications on the mobile game industry and recently it has seen a great upsurge of new interest and entrants. Hybrid monetization model is one of the biggest monetization trends for mobile games so instead of choosing between in-app ads, in-app purchases, and subscriptions mobile games developers try to combine these methods to acquire more user base and diversify their revenue streams. In this article, we will try to investigate such combined monetization methods and especially combinations with subscriptions.
Monetization methods in mobile games
There are many monetization strategies that you can choose for your mobile game. Let’s get a quick overview of the most popular monetization methods:
Revenue is usually generated by mobile ads that show up in the game. It can be Video, Rewarded ads, Interstitial ads, Playable ads, Native banner ads or other formats depending on the game type. Often such kinds of games are free for players.
In-app purchases allow you to make your mobile game free to download and charge players for additional content, extra lives in the game, coins, gems, etc. IAP offers are one of the most established monetization features, according to the Game Refinery research and can be utilized via core gameplay or meta layers.
Gamers subscribe to games to gain access to additional game content and items or to get an ad-free gaming experience. Subscriptions can be auto-renewable and non-renewing. Most commonly subscriptions are used as an additional monetization model.
Such monetization allows to add different meta layers on top of the core gameplay. Basically its additional in-game content that supports core gameplay. For example, a collectible meta, RPG meta, light construction and customization meta, and narrative meta. Such meta layers don’t represent the majority of the gameplay and don’t consist of the core game mechanics. Games can monetize directly via meta layers or indirectly.
All these methods prove their eligibility throughout time and provide a stable revenue stream to developers, however recently there is a trend that is gaining popularity and it is a mixed or hybrid monetization method.
Mixed Monetization Strategy
In general mobile games use in-app ads and in-app purchases as the main monetization strategies. Both of them allow players to play for free but still let developers earn their money.
Subscriptions are primarily used as an additional monetization method for both of these strategies. They allow to get additional revenue by providing an upselling opportunity. So it mostly appears as a type of in-app purchasing allowing games remain free for casual players, while the paying ones gain access to premium gameplay experience.
Traditionally subscriptions were used on PC and console games and appeared on mobile in the form of content and tools based apps. But recent observations revealed that there is an increase in the number of developers experimenting with using subscriptions on top of their in-app purchases. It was stated by Adi Haddad in her article that there is more than 70% year-on-year growth of subscribers in games on Google Play, so players are reacting positively to subscriptions.
Moreover, developers who are already using subscriptions reported that subscribed users in this games play on average 20% more on a daily basis, compared to before they subscribed and another developer reports that subscription also provide higher retention rates and much steeper Average Revenue Per User (ARPU) curves than non-subscribers, which leads to a much higher overall LTVs for these players. Finally, with subscriptions developers may increase engagement and decrease churn because they have an opportunity to control players’ feeling of regret after having made a purchase.
Types of Mobile Game Subscriptions
As we stated before subscriptions work best in combination with IAP and In-App Ads. Subscriptions allow players to get special status, exclusive content, exclusive features, characters, in-game currency and many other valuable things for players. All these create higher commitment and engagement among players. Subscriptions are about relationships with your users and building trust. Therefore it’s important to understand what kind of subscriptions actually exist and how they combine with traditional monetization methods.
Auto-Renewable and Non-renewable Subscription
Auto-renewable Subscriptions are the most popular type of subscriptions for mobile games. They allow players to access extra value inside the game rather than simple game access. For example, it can be a monthly amount of in-game currency, unlocked levels, ad-block and other special features.
Subscription is set for a particular time period, and when a user is interested in it he can choose between several options. And when that period ends, the subscription will be automatically renewed if it wasn’t canceled manually before the new subscription cycle begins.
Non-renewable (manual) works the same way as renewable but after the subscription period ends, users need to renew it themselves. This type of subscription is primarily used for testing the subscription format as a whole or to test prices and offers. For example you can compare if some features will be more popular as one-time IAPs or as subscriptions.
Umbrella subscription works as a cross-game subscription. After a user purchases a subscription he gets access to multiple games on a single platform. This type of subscription requires several important features to be maintained such as: a big offer of games, fresh and renewable content, ad-free gameplay and there shouldn’t be a lot of in-app purchases. Also it can offer cross-device compatibility, a family/friends package, and online/offline access.
Both Google and Apple saw the benefits of such subscriptions and introduced their own subscription-based gaming platform: Google Play Pass and Apple Arcade.
Battle pass is popular across multiple mobile game genres and feature in around 60% of US top 20% grossing mobile games. Usually it is based on the tier system that allows players to play and complete challenges to get rewards and unlock special content that doesn’t have a strong effect on the gameplay itself. So instead of getting immediate rewards gamers get access and the right to earn rewards over the game period. Such way gamers keep their interest high and it results in better engagement and retention.
Battle passes are usually presented in a form of battle pass seasons. So it means that they can last for a certain amount of time that you establish. Time frames create the feeling of missing out among players because they only can earn battle pass special features for a limited time. Thus it stimulates them to spend more time playing. Battle pass is not renewable, so after season ends players need to voluntarily go and purchase it again. Therefore it is important to understand your players and try to fulfill their expectations so they subscribe again and again.
VIP subscription is based on finding and engaging high-value players by offering them a lot of exclusive benefits such as VIP tournaments, chip bonuses, ad removal options, gifts, daily reward, etc. It is important to make people feel special and being a VIP player gives someone status within the game community, which means their buy-in is important. Such a subscription plan should give the VIP access to slots they would love to play but not chips to play those slots. Therefore, in this case subscription will be about access, not a replacement for existing purchases.
How to Track Subscriptions in Games?
When deciding how to track subscriptions in your game, whether it is battle pass subscriptions or VIP’s you need to have a full understanding of your game performance. Qonversion provides a complete infrastructure for in-app purchases and allows you to create and restore purchases, validate receipts, and provide your app with an accurate subscription status. You can send your subscription events data to 3rd party services such as Appsflyer, Adjust, Amplitude, and others and get accurate IAP and game subscription analytics
Moreover, Qonversion also can help you to test and engage your players. A/B testing feature allows you to test which paywall is more attractive or to compare different price options or to find out which in-app purchase bundle or subscription brings you the highest revenue. With Automation tool you can send personalized notifications to your players. You can tell them about trials, special discounts and subscription offers as well as notify about new battle pass seasons and other events. This feature is a great tool to increase your game’s revenue and retention, provide cancellation insights, reduce subscriber churn, and improve your subscribers’ user experience.
As you can see subscriptions in mobile games can have numerous positive effects on your game. Subscriptions help unlock user spend, drive user commitment and can increase session time and frequency. Layering subscriptions on top of IAP and in-app ads can bring you not only an increase in revenue and other important metrics but also helps to establish long lasting relationships with your players. As the trend on hybrid monetization strategies continues to evolve, don’t miss the opportunity to gain the most of it and Qonversion will help you with it.