Mobile games represent the largest segment of the gaming market, and that space is tremendously
competitive as a result.
We’ve heard from our community that they want to know more about how to succeed on
mobile platforms, so this is part one of a series on the basics of mobile games, how
they acquire users, and how they make money.
We are Ask gamedev and this is mobile game development explained.
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Traditionally, console and desktop games have been monetized through premium pricing - you
spend a set amount to receive the full game experience.
In the early days of mobile handheld gaming, the premium pricing approach continued on
platforms like the Gameboy or Playstation portable..
With the global adoption of smartphones, we saw a lot of changes to the gaming landscape.
This included the mainstream move to freemium game experiences, where consumers could access
mobile games for free, with in-app ads and purchases acting as the most common routes
to user monetization.
As expected, this change in user monetization has had a ripple effect on how mobile games
get developed.
Historically, games were released for PC or console on disk or cartridge, and that meant
developers essentially finished developing the game before shipping.
For the most part, they had no intent to touch the build again.
Customers were monetized one time only - and typically at the point of initial sale.
Mobile games changed that approach, and development teams have embraced the liveops structure
that has become popular in many areas of software development.
This involves shipping an efficiently developed but viable product, with the intent to iterate
and improve the experience based on live consumer data that shows where the game is succeeding
and failing.
These live improvements aren’t just focused on gameplay - but increasingly on the game
economy and monetization strategy.
In detail, the liveops lifecycle is similar to traditional development in that a pre-production
period kicks things off - with a focus on exploration and proving of gameplay assumptions
around making an experience that is fun.
This is followed by a production period where the team creates the launch features, monetization
and analytics framework, and live event infrastructure to allow for updates to the software after
release.
After an internal bug-fixing and tuning period, Mobile games typically release in a limited
territories list, or a soft launch.
This way they can get live crash data and address major issues in the build before going
to a worldwide release and a larger audience.
This is also a good time to gauge base level retention and conversion metrics.
Once in full launch, most freemium mobile games drive monetization through live events
- which are scheduled periods where special gameplay or rewards are offered to users for
a limited timeframe.
Offers and promotions to boost monetization or re-engage players are commonplace during
these periods.
It is popular for developers to focus live events on major holidays or themes - like
Christmas, Easter, or Halloween.
Live events are typically the primary point of monetization for mobile games, so they
are a huge part of the release strategy.
They often coincide with user acquisition campaigns and introduction of new features
or content.
Live events are also important as they typically provide great user data, and can inform user
acquisition budgets.
As with any game, a mobile title has a finite lifespan.
Metrics will show when core users start to increasingly depart the game for other experiences,
and developers typically combat this reality by developing similar or complementary titles
to sell-in to their existing user base.
This allows the developer to continue to monetize the users beyond that first piece of software.
For more information on the liveops lifecycle, Playfab has a great overview of it that we
recommend and will link to in the description.
Now let’s talk about Mobile games monetization in detail.
There are three models that have been the most popular - IAP, IAA, and paid apps.
In-app purchases, or IAP, is the monetization model of choice for a huge portion of mobile
game developers.
Only 4% of gamers actually make in-app purchases - but those paying customers are the core
focus of freemium developers.
IAP typically includes three different categories of purchasable items: Firstly, Consumables.
These are purchases that are made, then consumed within the app, such as extra lives, additional
moves, or in-game currency.
Users typically purchase consumables to further their progress through a game.
A user can also buy non-consumables, sometimes called entitlements, which are often used
to unlock access to features or content within the game.
Think of additional customization options for your characters that are often cosmetic
in nature and don’t normally enhance game progress.
The final type of IAP, is subscriptions - which is probably more typical in general applications
as opposed to games.
Apps will often use subscriptions to upgrade users to a higher tier of functionality after
initial use.
The subscription model is most beneficial for the minority of apps that consistently
provide ongoing value to loyal users via regularly updated features or content.
IAP and monetizing your audience is a deep topic that we will cover in depth in part
two of this series, so check that out if you want to learn more.
In- app advertising or IAA is probably the most popular form of monetization for Indie
game developers.
It’s easy to setup and doesn't typically require development of a complex economy structure
within your game.
You simply integrate with an existing ad platform that will serve ads in your game - and you
receive payments if your users engage with those ads.
If you have a lot of users, this can be a worthwhile strategy.
Rewarded video, in particular — has proven itself as a legitimate business model in the
game economy.
If you want to integrate ads in your game, there are lots of ad networks available.
Popular ad solutions include MoPub, AdColony, Admob and Adsense.
Again, check our part two of this series where we will dive deeper into IAA and strategies
for optimizing your ad revenue within your mobile games.
We’ve talked a lot about freemium monetization, but there are lots of games that make money
on mobile through the old-school premium model.
People pay once up front for the full game experience.
Many console or PC games that port to mobile follow this approach.
If you check the top paid apps charts on iOS on Android, you will often see a lot of familiar
names from traditional gaming platforms.
The paid app approach means less development time around live events, and in comparison
to a freemium title has less post-launch support requirements.
How do mobile games get users?
Well there are two methods - they either pay for them via advertising in other apps, or
they gain them organically.
Organically is always preferred, as the users are gained for no cost.
These are typically users who heard of your game via word-of-mouth or other media.
Paid users are acquired by placing in-app advertising in other apps.
Social media sites like Instagram and Facebook are popular ad-spend destinations, but you
can also use ad-networks like Admob.
The best choice really depends on the audience you are looking to attract to your game and
where they already exist.
Users are commonly bought on the basis of how qualified they are.
On one side of the spectrum are very unqualified eyeballs, and you pay for them on a cost-per-impression
basis.
This means that the ad network simply guarantees that the users will be shown your ad and nothing
beyond that.
The quality of these users is typically low, and you will often only see a small portion
convert to users of your game.
That said, this can be a cost-effective way to get acquisition data and can help to provide
your game with an initial user base.
As you become more confident in your retention and monetization metrics, you may look to
increase the qualifications of your user acquisition spend, by looking toward cost-per-click, cost-per-install,
or cost-per action campaigns.
You will only be paying for users that perform certain actions with these approaches.
But keep in mind that you will pay much more for that certainty.
The typical user acquisition strategy of a mobile developer is to efficiently test and
analyze their various ad campaigns so that they can be more certain of their key metrics
before making large ad spends.
If you can determine that the lifetime value of a user in a specific cohort is greater
than the cost to acquire that user, you are well on your way to user acquisition success.
ROAS, or return on advertising spend, is a good metric to track with these efforts.
ROAS measures gross revenue generated for every dollar spent on advertising and gauges
the effectiveness of online advertising campaigns.
ROAS is equal to the revenue from ad campaigns divided by the cost of an ad campaign.
Developers typically A/B test all of the different variables in a campaign - target audience
characteristics, ad copy, target platform, etc - in an effort to continually optimize
ROAS.
Developers will also regularly adjust their in-game economies based on the user data they
see once users are in the game.
You’ll want an analytics solution to make sure your ROAS is on point - we recommend
Kochava amongst the various third party options.
If you know anything about mobile game or app development, you know that there are a
lot of acronyms around the popular metrics used to evaluate performance.
We’re going to quickly go through some key things to track.
So how many people are playing your game?
That is measured via your Daily active users metric, DAU, or Monthly active users metric,
MAU.
How you define ‘active’ is up to you - but it usually involves booting up your game.
ARPDAU is up next - and it stands for average revenue per daily active user.
This will help you understand the revenue potential of an active user, and will inform
your user acquisition strategy and what you can pay to gain a new user.
Retention indicates how good your game is at bringing people back to play it.
Specifically, this metric shows the number of unique users who came back to your game
at future points after first opening the app.
The most commonly cited points are day one, or D1, Day7, or, D7, and D30.
Some people track D3, or D28, or D90… it’s all specific to your game and what the typical
lifecycle of a user is.
The key point is that you should know your dropoff percentages so that you can see where
you can optimize your gameplay and extend user retention.
The users that keep coming back are usually the ones who are most likely to monetize.
Any modern user analytics solution should provide the aforementioned metrics.
If you developed in the Unity engine, we have found the Unity analytics package is easy
to integrate and pretty comprehensive.
If you have developed in other engines, Flurry is a popular option.
We have also found that Crashlytics is a good option for additional user insights - specifically
around crashes, session data, and overall user behaviour.
Another respected option is Playfab, as it provides user management analytics in addition
to excellent data on back-end performance.
Check out part 2 of this video series where we dive into mobile user acquisition in detail.
Also, if you want to make your own iOS or Android game - check out this video on the
best game engines for making mobile games.