Making money is something games have to achieve for long-term success and, beyond that, success and security for the studio and developers themselves. No money means no business and the mobile games industry understands this well. But having a solid monetisation strategy still proves difficult for many games on the market.
With free-to-play now a core staple of mobile, these games have to make money through alternative methods such as in-game ads and currencies. While a balanced method has worked well for some, others with more aggressive monetisation can often lose players as the sense of pay-to-win or progress frustrates players to the point of quitting.
So how far is too far?
In this guest post, Midjiwan general manager Christian Lovstedt shares his thoughts on why aggressive monetisation can push players away and impact a title’s long-term retention. Lovstedt also reflects on how Midjiwan’s The Battle of Polytopia was able to achieve great success without the need for advertisements, loot boxes or in-game currencies at all.
“Money, money, money”. This instantly recognisable phrase may have been coined by my compatriots ABBA, but it’s truly the mantra of many in the mobile games industry.
Visit any mobile gaming event, download any report, attend a board meeting at Scopely, and you’ll likely hear about money, even if it’s more subtly described as “revenue”. And it’s true, the games industry, particularly on mobile, turns over some serious cash.
Data.ai says the industry generated $110 billion from in-app purchases in 2022, while ad revenue for games was estimated to be $116 billion. It’s not uncommon to see acquisitions and investment rounds in the millions – or billions – or read in-depth analyses on how to earn as much money as possible from players. Yes, this has made mobile gaming the industry’s largest segment by far, but it hasn’t come without consequences.
Monetisation on mobile is routinely aggressive. It’s often problematic for players to go one minute without an advertisement or in-game store taking over the screen.
Christian Lovstedt/cite]
Mobile games have become formulaic by design. Sure, features such as timers can fit naturally into mobile play session times, but usually, they create artificial limits and aggressively encourage users to pay to progress. Many of those users quickly churn out, while many of those who remain do so with a bad taste in their mouths. The promise of billions of dollars to be made is why the business model persists, but the foundations and small margins have been shaken by headwinds such as global inflation and ATT. And when a recent report found that 83% of games fail in the first three years, it’s clear that a new way forward is needed.
Respect at the forefront
Free-to-play games make up the ten highest-grossing mobile games, and it’s no wonder when many have been designed with a small number of high-spending players in mind. It’s evident that the revenue coming from a tiny percentage of gamers has essentially informed monetisation for an entire industry. Gacha, loot boxes, and pay-to-win are all models designed for our highest-spending players, but this comes at a cost.
Kompu Gacha was banned in Japan; meanwhile, loot boxes have come under scrutiny by governments and regulators around the world. Thankfully, we as an industry seem to be phasing out the previously ubiquitous and slightly disparaging high-spending players as ‘whales’ of our own accord.
Simply put, monetisation on mobile is routinely aggressive. It’s often problematic for players to go one minute without an advertisement or in-game store taking over the screen. But it doesn’t necessarily need to be that way. New releases such as Gubbins have shown that games can succeed without forcing ads or in-game currencies on their players.
A recipe for success?
Players should feel good after a purchase, not guilty that they couldn’t resist spending to progress.
Christian Lovstedt/cite]
I can’t automatically suggest a different way of doing things for all titles, but I can tell you about how we do things at Midjiwan. We hold the simple belief that game design comes first. We think mobile is the best gaming platform. And we feel the pockets of players don’t need to be picked. Our F2P turn-based strategy game, The Battle of Polytopia, features no advertisements, loot boxes, or in-game currency. Instead, we adopt a DLC-focused approach to monetisation where players have the choice to decide if, and how, they spend.
Players begin with four tribes and have the option to purchase more if they so want to. Once they have completed their DLC and cosmetic collection, which costs approximately €30, it’s impossible to spend any more. Players should feel good after a purchase, not guilty that they couldn’t resist spending to progress. Watching an ad doesn’t unlock an extra tech tree perk, the territory size can’t be increased with cash, and players can’t pay to reverse a ‘game over’. Adding three different currencies wouldn’t work for us: monetisation can ruin games, not enhance them.
Investment and user spend are both down, but we have the chance to redefine our industry and focus again on what really matters: creating fun experiences.
Christian Lovstedt/cite]
Has this method worked? Well, we’ve never conducted a user acquisition campaign (though we are testing to see what impact this could make), and we’ve garnered more than 20 million downloads on mobile alone. Our players actively ask for more content to purchase, which is why we regularly add paid content to the game. In fact, some of our 1-star reviews came from users who were actually annoyed that they couldn’t buy more content. However, these additions are not a quick cash grab. The lore and unique mechanics are meticulously created to provide the best experience for our players. 90% of our work never makes it into the game: it’s all about refining the core experience.
Final thoughts
I’m absolutely certain that some of you reading this are thinking something along the lines of ‘Why should I listen to this preachy Swedish guy with a box on his head?’ or ‘You just got lucky with your game’, and you might be right.
Nevertheless, it’s clear the mobile games industry is at a pivotal moment. Yes, Investment and user spend are both down, but we have the chance to redefine our industry and focus again on what really matters: creating fun experiences.
I believe that our focus should be on delivering a great game while targeting a large number of players who make smaller purchases. With this model, we create F2P titles where players are respected. Let’s allow players to choose for themselves when they buy additional content. With this approach, mobile games can once again become a platform for new and creative titles.
Free-to-play isn’t inherently bad – so let’s stop it from becoming so.
Edited by Paige Cook
