How to monetize effectively and sustainably in mobile games

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With cross-platform and rich data capability, this end-to-end solution enables publishers and developers to better understand different player behaviors and create personalized experiences, targeting individual players in real time. Anyone can get a fully-featured free trial of deltaDNA for 30 days here.

In the early days of Free-to-Play (F2P), a game’s monetization strategy extended as far as the price of In-App Purchases (IAPs). Effective monetization today incorporates messaging, onboarding, timed promotions, cross-promotion and User Acquisition (UA) spend. In-game advertising accounts for a higher fraction of total publisher revenues in today’s F2P landscape than ever before. As such, non-spenders prove just as significant an income stream as their purchase-happy counterparts.

The number of F2P games out there that have nailed their monetization strategy constitutes a very small minority in the grand scheme of things. Even fan-favourite titles often underperform in this regard. Why? Because they either fail to do the basics, fall into common traps, or both.

This guide explains:

• Important targets and thresholds for KPIs
• Best practices for implementing monetization mechanics
• Common and costly mistakes to avoid

A game can perform well in metrics such as engagement and retention and still struggle to monetize. In fact, we see it often. Worse still, many publishers struggle to accurately assess the performance of their game’s monetization mechanics. An Average Revenue Per Daily Active User (ARPDAU) of 10¢ is the perfect benchmark for an F2P game. 

Through analysis of thousands of games and billions of player experiences, we have calculated some essential target KPIs for game-makers looking to monetize and hit that mark.

Retention is the platform for everything in games - you can’t analyze, segment, engage,or monetize a player that has churned. As such, you should be aiming for a Day 7 retention rate of 10% or above. From there, you can build out your other strategies.

DO

Integrate offers smoothly

Make the browsing experience as smooth and enjoyable as possible, separating content honestly and obviously. A player tricked into beginning a purchase is highly unlikely to complete it. You can, however, count on them being annoyed by the mechanic. Drawing players to content intuitively, at opportune moments, without setting them down a compulsory navigation path is the best way to maximize their likelihood of engagement.

DON’T

Bombard players with messaging

Not only do endless aggressive pop-ups, messages and push notifications impinge upon the player’s enjoyment and increase their likelihood of churn, it encourages them to start dismissing offers out of habit without ever engaging. The same goes for cluttered UIs and storefronts.  Frustrated by overexposure, players can miss even well-targeted and appropriate offers.

Good retention alone is no guarantee of good monetization and high-level data from the deltaDNA platform proves that point emphatically. 

• Only 38% of games with D7 retention of 10%+ achieve 10¢ ARPDAU.
• Only  54% of games with a D7 payer fraction of 10%+ achieve 10¢ ARPDAU.

The majority of players in an F2P game will never monetize, but that isn’t a problem. If you can achieve a Day 7 payer fraction of 10%, you will be well on your way to a sustainable and profitable ARPAU.

DO

Make first purchase a ‘no-brainer’

A game’s tutorial should always include some reference to IAPs and a short, simple tour of the store mechanic. Keep the storefront clean, informative and engaging with easy access at all time from the main User Interface (UI).

Having been introduced to the economy and store in simple terms during the onboarding/tutorial phase, the player should be presented with an offer that they can’t refuse. Selling starter bundles or other such conditional packs is a great way to give players the chance to get good value for money whilst also creating a sense of urgency. Communicate that deals won’t be available indefinitely.

DON’T

Be so cautious as to underwhelm

It is vital that a player’s first experience of the in-game economy is a positive one. Pushing too hard on monetization early on, before the player has had a chance to explore the game and get used to the economy, creates a very high risk of churn. However, fear of impacting retention causes some game-makers to be far too cautious with their signposting and introduction of IAPs. 

Should a player’s first browse of the store (or interaction with an offer message) not be enticing, their likelihood of future engagement is hugely compromised. Using your engagement to nurture players with advice and signpost will encourage them to see messaging as a relationship builder rather than just a sales tool.

Having a minimum price point lower than $2 significantly devalues a game. Increasing the minimum price point does not harm conversion, but it causes ARPDAU to increase dramatically.

DO

Always offer savings on higher-tiered items and currency packs

It seems obvious, but your more expensive items and currency packs must convert at a better rate than those lower down the pyramid. Players should never be discouraged from spending more currency but we see it all too often. More spend needs to mean more bang for your buck(s).

DON’T

Equate cheap with valuable

Many developers make the common mistakes of either positioning their minimum price point too low (below $2) or making their cheaper IAPs/bundles/currency packs better value than those at higher price tiers.

Because the payer fraction of any F2P title is invariably small, it is repeat spend from the minority of payers that bumps up your ARPDAU. Just 3 spends or above per paying user can reliably bring in 10¢ ARPDAU.

DO

Make monetization central to the core game loop

Introducing monetization very early on, and as a central element of the core game loop, makes it seem a much more natural part of gameplay. The longer that players are allowed to settle into a play style and build habits without exposure to spending opportunities or offers, the less responsive they will become.

DON’T

Send generic or indiscriminate offers

Other than certain seasonal promotions and event-triggered offers (first session etc.) players should not all receive generic offers as a matter of course. Blindly sending all offers to all players irrespective of behaviour, play style and engagement history is pointless. A great offer to one player is irrelevant or even annoying to another.

As a minority within a minority, whales are truly precious. Their impact, however, is massive (and crucial). Spending $100+ over their player lifecycle, a small difference in the number of whales loyal to your game can push you considerably far - on both sides of your target 10¢. You should aim for 5% of your spenders to become whales.

DO

Plan for the long term

Focus on building better long term engagement and creating rewarding experience for all spenders as an effective strategy to maximize the potential of whales. Across all in-app purchases made by whales, the typical transaction size is $20, i.e. whales are, on average, purchasing modest bundles.

DON’T

Pursue big individual spends

Chase whales for massive individual payments. Over half (54%) of whales have never made an individual transaction worth more than $50. Developers should use this insight to optimize monetization. Very expensive individual items or bundles will not make an impact.

The KPIs above outline the F2P monetization foundation but the recipe for a game with high Lifetime Value (LTV) is more complex. We outline more specific tactics and mechanics in the published guide available here but the essential truth is this - a good monetization strategy uses the core game to drive players towards IAPs, priced intelligently, with a heavy emphasis on repeat conversion.