Game monetization

Game Monetization

Classic Model

• Build console or PC game, sell it at retail• Development required huge teams with huge

budgets• Had to obtain expensive dev kit hardware

from Sega, Nintento, etc.

New Model

• Digital downloads eliminating need for retail in PC market

• Mobile and Facebook changed barrier to entry drastically

• Very inexpensive to develop

Temple Run Development Team

Keith Shepherd and Natalia Luckyanova

Platforms

Steam

Facebook

Console

Mobile

Monetization Strategies

Lots of Money!

Over $50m revenue last year

Puzzles and Dragons Revenue

• $280m last year• $92m last month• Averages over $2m per day• 99% of revenue is from Japan

Free vs Paid

Paid

• User pays up front• Potential revenue is limited to number of

downloads• Works better for established franchises or

brands• Can also include in app purchases

How Does Free Make Money?

• Ads• In App Purchases

Ads

• Intrusive to gameplay experience• Difficult to implement successfully• Market dominated by Google owned Admob• Generates decent revenue

In App Purchases

• What to sell in game?

More Content

• Upgrade to full game• More levels– Time consuming for developer

Power Ups

• More powerful items• Free passes through difficult levels– Many players disapprove of “pay to win” items

Cosmetic Items

• New avatars• Novelty items• No effect on gameplay– Generally accepted form of IAP

Restriction Mechanics

• Purchase items that allow the player to play more often

• Requires addicting gameplay– Many players reject this form of gameplay– If successful, extremely lucrative

Fast Tracking Progress

• Booster items that speed up progression through game

• Game should start out fast and rewarding, then slow progress dramatically, enticing players to purchase items that get them progressing quickly again

Freemium

• Free to play• Offers in app purchases (IAPs) to produce

revenue• Potentially much more lucrative than paid

games

• Relies on user engagement and social mechanics to drive long term revenue

• Revenue is not tied to number of downloads, each user can make many purchases

Core Loop

• Central gameplay mechanic that user performs over and over again to progress

Currency

• Soft currency is earned in game, allows player to progress slowly

• Premium currency is purchased with real money, allows player to greatly speed up progression

Make It Social

• Add incentives for players to involve friends• Cooperating should be mutually beneficial

Clash of Clans

• Current #1 grossing game in the US store• Estimated revenue of over $50m last year

Market Considerations

• Which platform to target?• Which genre to develop?• Which monetization strategy for which

platform and genre?

Market Research Resources

• Inside Social Games• App Data• Pocket Gamer• App Annie

InsideSocialGames.com

AppData.com

Pocketgamer.co.uk

AppAnnie.com

That’s It!