The monetisation methods used by games developers and publishers are always evolving – though in-app purchases still remain king for now.
The latest trends this year have included the rise in importance of video ads and the opening up of subscriptions to games developers on the app stores.
With 2016 coming to an end, we asked mobile games industry experts:
• What do you see as the biggest monetisation trends in mobile in 2017?
With over 15 years’ data mining experience, Mark co-founded deltaDNA, formerly GamesAnalytics, to unlock big data to drive player understanding, introducing the concept of Player Relationship Management to build better games.
2016 has been a big year for mobile.
The phenomenal success of Pokemon GO has catapulted F2P to an even wider market than ever before - the game has crossed the $200m revenue mark which makes it the most successful mobile game launch in history.
However, that does not necessary mean that the F2P market will be easier to navigate.
With acquisition costs set to remain high next year, developers will continue to focus heavily on player engagement to generate revenue in the granite-tough F2P mobile market.
We know that players are now a lot more comfortable with ads, while too many IAPs can spoil player enjoyment. Therefore, effectively balancing ads and IAPs while preserving the player experience will be where monetisation battles are lost and won next year.
As a result, to increase monetisation and unlock profitability, the industry will continue to shift towards deep-data analytics solutions that can provide granular analysis and micro-segmentation, to optimise their game performance and provide personalised experiences and monetisation pathways based on players’ in-game behaviours.
The phenomenal success of Pokemon GO has catapulted F2P to an even wider market than ever before.Mark Robinson
In terms of new retention and monetisation mechanics, we are sure to see collectible card game (CCG) adopted by a lot of F2P games, on the back of the success of Star Wars Galaxy of Heroes and Clash Royale.
Gacha is also going to become much more the norm as a monetisation method. Many mobile games including Angry Birds 2, Marvel: Contest of Champions and Clash Royale already incorporate a gacha in the game, but we will see much more widespread adoption in 2017.
Another major monetisation opportunity for mobile will be in VR. Google Daydream, the new standard of mobile VR, has global payments to support IAPs within VR and is available across multiple devices.
Additionally, F2P VR game Bait on Samsung’s GearVR also has IAPs and has impressive downloads so far. This all indicates that VR does in fact have a real home on mobile.
Ultimately, the quality of mobile games will continue to improve in 2017, particularly if Nintendo’s 'free-to-start' model is successful at convincing gamers to part with ten bucks.
There’s nothing new under the sun of course, and as ever the use of data to keep players playing and paying will be key.
New Ad formats will be introduced to maximise ad revenue.
A few years ago, rewarded video paved the way for a new era in mobile advertising, where ads do not have to be intrusive and can benefit both developers and users.
This trend will continue as Playable ads and other engaging ad formats are rolling out on major platforms to maximise revenue.
Secondly, developers from new genres will start using ads as a monetisation tactic. The steady increase in user acquisition cost will push more developers that have been reluctant to use ads for monetisation to include ads in their game in order to balance UA spending.
This will include mid core and hard core games for instance.
Thirdly: technology. New tools will be introduced to help developers to optimize their monetisation efforts more granularly.
From our point of view, some new aspects of free-to-play would be games’ 'softening' for mass audiences - paywalls, or restrictions preventing players from progressing to new levels without making in-game purchases, are being reduced.
The market has realised that not all developers have the ability to monetise through IAPs.Igor Klyukin
On the other hand, the paying portion of the audience gets more and more opportunities to spend money while playing. Thereby, you reorient in-game purchases to so-called 'whales' - players with the highest willingness to pay.
As such, the remaining portion of the audience suffers less pressure, and has begun being monetised by increasing exposure to in-game advertisements.
This arrangement is a win-win for everyone in the market. Popular projects’ developers can still generate revenue through advertising, while others will continue to monetise using IAPs.
The trend should continue in 2017 - the non-paying audience will continue being monetised via ads, possibly becoming a catalyst for the development of new projects honed towards such an approach.
The market has realised that not all developers have the ability to monetise through IAPs, and that not all players are willing to pay - this has led to an increased interest in using ads as a monetisation strategy.
Mobile monetisation is a constantly changing and morphing beast; most companies chase the dragon by looking at what has been successfully done before – only to find that faster moving colleagues have plundered the treasure trove.
At Motorious Entertainment we have identified three core monetisation features for the launch of our Top Gear Road Trip mobile game.
eCPM will be less important and more focus will go on growing ARPDAU and LTV optimisation.Jari Pauna
As we want to offer the players a true to the brand Top Gear gaming experience, all of these features have been subject to our Top Gear treatment: more moves is now "No, you didn't win, the actual goal is still far away, as I just moved it there", and special moves is now "dirty tricks" such as sticking a potato to rival car's exhaust, etc.
In addition to these, we believe that these four could be the biggest monetisation trends in 2017:
- Ad placement optimisation: Incentivised ads that offer something valuable to the player, based on their actual need and personal progress in the game. In Top Gear Road Trip, the player might need something to unlock a car that is a requirement to a certain multiplayer event. If you want to race in a Top Gear Race Track, you'll need a proper set of wheels (or at least three in the Rocket Robin race).
- Virtual currency annuity: A sequence of payments that the player receives in exchange for an initial investment. "Get a Stigload of coins every day for a month for one low low payment of just 9,99!". Not wanting to sound like a used car salesman, but it offers unbeatable value and boosts retention.
- eCPM will be less important and more focus will go on growing ARPDAU and LTV optimisation.
- More brand advertising in games – in Top Gear Road Trip we have ad billboards at the finishing line, a natural placement and really suitable for brand advertising.
Why not try all of them in your game, what could possibly go wrong...?
Two things.
Developers will request, and collect, substantially more data about their customers and how they interact with rewarded video ads. There is very limited transparency right now, and even with mediation platforms, much can be improved and optimised.
I generally expect rewarded video to gain an even larger market share, especially considering branded video ads growth. It is logical that developers will want more control over every aspect of this channel.
As more studios adopt the business model of treating games as a service, it is reasonable to expect incentives to stabilise payments and make them recurring.
It's likely a hybrid model of subscription will become a more common sight in games. I don't expect that classic subscription will become common in 2017, but I do expect that more games will offer lucrative monthly packages/passes to different segments of their customers.
One aspect of a maturing mobile free-to-play space is that, instead of having a massive amount of followers taking cues from a handful of pioneers, we now have a large and growing number of companies that are very confident with free-to-play design.
This allows them to steer further away from previously perceived templates and best practices for monetisation.
Next year we will continue to see the playbook open up to more and more viable monetisation strategies, potentially including subscription models. The cool part about innovation in monetisation is that it promotes diversity by making more genres and more metagame structures viable from a business perspective.
We have seen different people draw very different conclusions from the momentum of Clash Royale and Pokemon GO. One thing is pretty much a given: these games will have an impact on the mobile game landscape for 2017.
Clash Royale and Pokemon GO will give confidence to copycats and innovators alike.Arto Huhta
As successful outliers they will give confidence to copycats and innovators alike. Developers will feel more safety in using some of the new proven techniques, but more importantly in abstaining from some well-established free-to-play mechanics that they might previously have considered as necessities.
In 2016, many of us finally woke up to the potential of incentivised video ads. The importance of ads as a revenue source will definitely continue to grow.
If rewarded opt-in ads are done right, players are happy to watch ads routinely and they ask for more opportunities to do so. This is what we have witnessed on Nonstop Knight.
As the fun aspect and natural integration of ads into the game flow is better understood, designers are now working more on improving those aspects.
Instead of worrying about the damage ads could do to the player experience, we will look for ways to enhance it with ads. The mindset is definitely changing.
There is going to be another shift in ad revenue optimisation. The easiest metric to measure and attempt to maximise is the amount of ads players are shown.
However, now with better tools for ad revenue attribution, more and more companies will be measuring and optimising ad revenue at a more granular level. More views does not always translate to more revenue.
