Newzoo estimates that in 2022 the industry will have a turnover of $184.4 billion, down 4.3 percent from 2021. During the pandemic, there was an increase in users and revenue for the gaming industry, and in 2022 many companies saw revenues decline due to the normalization of the market. Despite this, mobile gaming will remain the industry’s most profitable sector, generating $103.1 billion, or 48.8 percent of total revenue.
Role of monetization in the gaming industry
Monetization plays a crucial role in the mobile gaming industry, as it is the primary way developers generate revenue. While many mobile games are free to download and play, developers can monetize their games by offering in-app purchases, display ads, or a combination of both.
In-app purchases are an effective monetization strategy that allows players to purchase virtual items or currencies to enhance their gaming experience. Players can purchase items that unlock new levels, characters, or power-ups. The key to a successful in-app purchase strategy is to provide players with a compelling reason to buy, such as exclusive items or discounts.
An example of an effective monetization strategy is demonstrated by Marul Games, which was able to increase its effective price per thousand impressions by 15-40 percent among Russian-speaking audiences. Marul Games has a substantial user base in Russia, with an average of 70,000 users playing Word Surf daily, making it crucial for the game developer to improve the lifetime value (LTV) of its players and enhance the effective price per thousand impressions. Marul Games achieved these objectives through strategic promotions facilitated by the Yandex Advertising Network.
Frequently used monetization strategies
Programmatic advertising, which uses automated algorithms to buy and sell ad inventory, is becoming increasingly popular in the mobile ad industry. In fact, programmatic advertising is expected to account for 85% of mobile ad spending in the US by 2022.
Publishers can use several ways to monetize the app: showing ads in the app, making the app or some of its features paid for, and adding in-app purchases.
More often than not, several monetization options can be found in the same app. Developers divide the audience into segments and choose a different method for each. For example, one part of the audience buys a subscription to the app, while another part watches ads. In both cases, the app owner makes money.
Other paths to success
The success of a mobile game’s monetization strategy depends on several factors, such as the game’s popularity, engagement, and user retention rates. Developers must ensure that their monetization strategy does not negatively impact the user experience, as this can lead to a drop in user engagement and retention.
One way developers can ensure a positive user experience is to use targeted ads that are relevant to the player’s interests. For example, a puzzle game can display ads for other puzzle games, which are more likely to be of interest to the player than ads for unrelated products.
By integrating advertising network SDKs, developers can promote their games using various ad formats, including banners, rewarded ads, and full-screen ads. Through A/B testing and working with network waterfalls, developers can optimize their advertising strategies and update SDK and ads.txt files to improve metrics.
Developers must also focus on providing an enjoyable user experience with ads that do not annoy users, which is essential for achieving high retention rates.
Maximize revenue potential with ad networks
Mobile game developers can also partner with advertising networks like Yandex Advertising Network, AdMob, or Unity Ads to improve their monetization strategies. These networks provide developers with access to a broad range of advertisers and ad formats, allowing them to maximize their revenue potential. Connecting the app to the advertising network makes monetization much easier. The publisher does not need to find and interact with advertisers themselves.
Ad mediation, which allows app developers to work with multiple ad networks and optimize their revenue, is also becoming more popular. According to a survey of app developers, 41% of respondents reported using ad mediation in 2020, up from 34 percent in 2019.
Yandex Ad Network has recently begun to connect apps from China and Singapore. According to independent research* the Yandex Ad Network is one of the largest networks and most profitable networks for app monetization in Eastern and Western Europe, the Middle East, Asia, and Latin America.
Examples of mobile ad monetization
One example of successful mobile ad monetization is the mobile game “Candy Crush.” The game utilizes a combination of in-app ads and in-app purchases to generate revenue. Players are able to purchase virtual goods to progress in the game, and rewarded video ads are shown to players who run out of lives, providing an additional revenue stream. In addition, “Candy Crush” partners with brands for sponsored levels and events, creating a more engaging experience for players while generating revenue for the game’s developers.
“Sudoku Quest” is another mobile game that uses a combination of in-app ads and in-app purchases to generate revenue. The game features banner ads and rewarded video ads that players can watch to earn coins, which they can then use to purchase hints or remove ads from the game. In addition, the game offers a premium version that can be purchased to unlock additional features and remove ads permanently.
Avoid mobile ad fraud
Mobile ad fraud is a serious issue that can affect the performance of mobile advertising campaigns and waste valuable ad spend. The report suggests that advertisers and app developers lost an estimated $2.3 billion in 2020 due to fraudulent activity.
To prevent this, the use of fraud detection and prevention tools is recommended. These tools use advanced algorithms to analyze user behavior and identify fraudulent activity. Many ad networks offer fraud filters that can help block fraudulent activity before it reaches your ad campaign. These filters can detect patterns of fraudulent behavior such as bots, click farms, and incentivized clicks.
In conclusion, monetization is a critical aspect of the mobile gaming industry, and developers must choose the right strategy that works best for their game and their audience. By offering a balance between in-app purchases and display ads, developers can generate revenue while ensuring an enjoyable user experience. The key to success is to experiment with different strategies, optimize user engagement and retention, and partner with advertising networks to maximize revenue potential. As the mobile gaming industry continues to grow, monetization will remain a vital component of its success.
Valentina Petrova led the development of Yandex Money (it later became Yomoney) in Asia from 2020 to 2022. She then moved to Yandex and now develops the full Asian direction of the brand as Head of In-App Partnerships, Asia.
Valentina was a leading business development professional at various organizations in Russia, CIS, and Eastern Europe including Moshi, a manufacturer of premium accessories for Apple.
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