This year has brought immense change for mobile game businesses. However, disruption can spark innovation, as game developers transform their studios to shape the future they want to see.
The future of gaming looks bright. People spent a daily average of 4.2 hours using mobile apps in 2020, while demand for new apps and games grew seven per cent year-on-year in 2020, according to the State of Mobile 2021 report (App Annie, January 2021).
For our recently published App Monetisation Industry Outlook, we interviewed 25 thought leaders from across the industry to hear their perspectives on the current state of app monetisation and some of the exciting possibilities through 2025.
Here, we’ll explore how these shifts are impacting monetisation across the in-app economy - plus which tangible actions publishers and developers should take now to position themselves for growth.
From mobile to cloud
One significant area of innovation for 2022 is the mobile-to-cloud evolution.
Mobile publishers and developers are already developing no-download instant games, accelerating the transition. This mobile-to-cloud shift offers more value for players - because they can have deeply immersive, graphically rich cross-platform game experiences.
Imagine you can see and try all games right from the same cloud platform - then download only those you want to your phone.Jason Rubin
"Imagine you can see and try all games right from the same cloud platform - then download only those you want to your phone. You'd probably play more and spend more in those few games you were able to test and deliberately add to your mix," suggests Facebook vice president of play Jason Rubin.
Softgames is one developer which has historically monetised by publishing HTML5 games across more than 2,000 high-traffic websites. However, delivering this on a global scale required a large volume of demand and supply partners to maintain stable effective cost per thousand impressions (eCPMs) and a high fill rate.
After shifting their portfolio of games to Facebook Instant Games and adopting rewarded video ads with Facebook Audience Network, Softgames witnessed an increase across all key performance indicators (KPIs), most importantly a significant increase in revenue and eCPMs.
The opportunity to integrate in-game rewards and purchases across both cloud and mobile can bring even greater returns for developers. For example, a player might access in-app purchases in the same game on both the cloud platform and in-app. Then, publishers could see more dollars for every dollar spent.
From solo to social
Games are getting more social as developers build more live operations (live ops) features into their games on mobile and cloud. Games have long provided a digital space for people to engage in meaningful social experiences and friendly competition, but adding social features can also increase game discoverability.
For example: if your friend is playing a game and posts a high score, it's a great way to discover new games you may be more likely to enjoy, thanks to your friend’s endorsement. As people play more mobile 'instant' and cloud games, developers will connect more players across multiple platforms, which creates an ongoing value exchange.
This enables new types of quality advertising experiences that gives advertisers higher-quality engagements with people. This in turn opens greater monetisation opportunities for publishers.
From ads to app monetisation
It's important to diversify monetisation models, otherwise you could limit the global impact of your game.Candice Mudrick
To get to this future, we’ll see more games designed with monetisation in mind from the start. Gone are the days of build, then monetise. The value of balancing in-app purchases with in-app ads is now widely accepted. As we’ve seen in success stories from every genre, game publishers and developers affirm positive results on retention and revenue when they build ads into their game from the start.
Newzoo head of market analysis Candice Mudrick commented: "It's important to diversify monetisation models, otherwise you could limit the global impact of your game. The best hybrid implementations have thought about different monetisation streams as part of the game design itself."
For the App Monetisation Industry Outlook, Facebook asked which strategies publishers should focus on between now and the end of 2021, with 50 per cent of the industry respondents outside of Facebook recommended diversifying revenue streams.
To operationalise this holistic approach to app monetisation, many publishers are changing how their teams are organised, bringing user acquisition, monetisation and development into a single process.
As games are developed with a monetisation-first mindset, we'll see more effective use of different forms - from ads and in-app purchases (IAP) to subscriptions and paywalls - as well as new formats.
Recommendations for publishers large and small
For gaming studios of all sizes, what are the priorities to focus on now for future success? Before the end of 2021, we recommend shifting from waterfall to app bidding and diversifying revenue streams across both in-app ads and in-app purchases.
Beyond this, here’s some specific advice for smaller developers:
- Focus on quality content to grow your business
- Optimise monetisation and user acquisition (UA)
- Leverage the latest ad formats
- Build strong partnerships
AppLovin vice president of platform Dan Sack advised that smaller studios should: "Continue to focus on creating great content and build from day one with monetisation and growth in mind."
Consider how you can offer value to the user so they willingly give you the information that helps you create more personalised experiences for them.Gal Brill
For larger publishers, we recommend the following:
- Build your own platforms and other ways to gather your own first-party data.
- Show players the benefit of sharing their information with you, and you'll achieve greater engagement.
On the other hand, AppsFlyer general manager Gal Brill suggested that larger publishers should: “Consider how you can offer value to the user so they willingly give you the information that helps you create more personalised experiences for them.”
Build, Monetise and Grow
Here are just a few Facebook solutions available to help gaming companies build, monetise and grow:
- Launch and grow HTML5 games that are playable on any device and available to a worldwide audience with instant games.
- Build and distribute your free-to-play cloud games on Facebook’s cloud infrastructure to deliver high fidelity gameplay across platforms in the US and Europe.
- Reach more qualified new players with cloud playable ads, a true try-before-you-install experience that developers can easily create from their native game versus rebuilding the ad using HTML5
- Use Facebook’s Automated App Ads to improve user acquisition with machine learning and automated systems that drive more results for your app install ads.
- Monetise your app with high-value in-app ad formats like rewarded video, partnering with Facebook Audience Network for access to global Facebook demand.
Download the full report for more recommendations and industry perspectives.