Monetizing Mobile Games

The Problem

● Making a quality game takes great effort and money

● High Cost of User Acquisition and Marketing

● Appstores dominated by big studios with multi-million dollar budgets

Typical User-Cycle

● Acquisition ● Engagement ● Retention● Monetization

Lets Talk Numbers

Simple Equation : Make more money per user than you spend in acquisition and retention

Y= Lifecycle value of userX= Money Spent on Acquisition and Retention

Y>X Your Spread is positive and you can start scaling your game

Go Freemium or Go Home

If the game is not offered as freemium than it will be very tough to drive downloads and play sessions

Three Ways to monetize freemium:

1. Advertising Revenue 2. Direct In-App Purchases (IAPs)3. Driving more downloads

Economics of IAPs

80% of IAPs come from 5%-10% of total user base who have played 50 or more sessions

With this data in mind, you can start to form your game design to include a funnel that draws people through the flow of acquisition, engagement and retention to have the greatest monetization outcome possible.

1. User Acquisition Data

In the beginning, a player’s lifetime value is either zero or not zero. Basically, either they download & play or they don’t.

The most important KPI data points to analyze at this stage are:

● New downloads● New users completing at least one game● Average number of games completed by new users within the first day after

the initial download● Drop off rates

If the drop off rates are too high, or the users aren’t playing as many games as you’d like, troubleshoot or modify one or all of these 3 factors:

● Incentivized downloads● Finding out if the game is being downloaded by a non-targeted demographic● A complex, elaborate sign-up process● Lackluster or absent tutorial to guide users through their first interaction with the

game

2. Engagement: Key To App Monetization

Once the user has spent some time with the game, you want to entice him to make it a part of his everyday routine: something he gets into the habit of returning back to. Normally, this means he plays the game 3 to 10 times per day.

At this point, important KPI data to track include:

● Number of gaming sessions per day● Frequency with which a player returns to the game & time lapse between

sessions

Here, data-ridden activity maps help you know how a player is doing in different sessions and what content to include in your notifications.

3. In-App Retention Analytics

After the user finishes 10 to 50 gameplay sessions, you need to pay a lot of attention to the depth of the game to keep them hooked with a personal interest in succeeding.

Here, the most important thing for game designers to keep an eye on is milestone or mission-based metrics to find out where users are getting stuck or frustrated. Heat maps are especially helpful in figuring out where to fine-tune the game’s design-related parameters on different levels.

● Daily● Weekly● Monthly

To find out which levels you need to start fine-tuning the most, track retention rates in percentages at each of the following time-point milestones:

4. App Monetization Strategies

Here, to ensure your strategies for requesting IAPs are working to their maximum efficiency, track these KPIs:

● ARPDAU (average revenue per daily active user)● ARPPU (average revenue per paying user)● LTU (lifetime value of user)● Inflation (whether or not the user has too many extra lives already at the time of

an IAP request)

Once someone has become a dedicated player, it’s time to convert him into a spender by pushing him through the monetization funnel.

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