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3 successful in-app payment strategies for mobile games

Posted by Ben Dickson on Mar 29, 2016 12:00:00 PM
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I’ve already discussed how ads can help bring in a lot of revenue in mobile games, including how developers make fortunes by applying non-intrusive and user-friendly advertisement strategies for their mobile games. But ads are not the only monetization strategy that are raking in huge amounts of cash, and they might not be applicable to all sorts of games.

A tried-and-true alternative that has seen just as much – and even more – success in making money for mobile game developers is in-app purchases (IAP), aka “microtransactions,” where users download the game for free, get a taste, and then pay to unlock extra features. This is a trend that started somewhere in 2010, when free-to-play mobile games kicked off, and has been on the rise ever since. Last year, the top ten mobile games that used this model earned over $5 billion collectively.

This is certainly a more efficient approach than putting a hefty price tag on a game and expecting users to make a one-time purchase to download the app, a risky strategy that might only have a shadow of a chance of succeeding when you’re creating a mobile port for a very famous PC or console game.

But in-app payment does come with its own requisites and pitfalls, and can cause annoyance for players when they’re asked to make an unfair payment at a critical moment, or if they get the general feeling they’re getting nickel-and-dimed by the publisher.

Here are three strategies that can provide a steady revenue for your app without causing the frustration generally attributed to IAP models.

Play for free – pay for more

Anyone who’s played games in the 80s and 90s is familiar with shareware games (Duke Nuke ‘Em and Doom, anyone?). In this model, you download the game for free and get access to play just some of it. For instance, if it’s an FPS or platform game, you play a couple of levels. If it’s a sports game, you can play an exhibition game between two predefined teams. The rest of the features are absent, or are there as grayed out and disabled buttons, and you have to pay to unlock them.

The features you should embed in the limited version is very tricky business. On the one hand, it shouldn't be so limited as to prevent users from getting their feet wet. It also shouldn’t be so wide-ranged as to provide unlimited gameplay. It has to be just enough to allow users to get the feel of the game, and become addicted enough (or so we hope) to make the ultimate decision to pay for the full features.

This model can also act as a great marketing strategy to get your app discovered in app stores. This is especially true if you’re new to the game and don’t have any previously successful titles hanging from your belt. With so many low quality apps being distributed, consumers are reluctant to pay for a title coming from an unknown publisher before getting to try it first.


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 In-game currency

In this model, you integrate a virtual currency in your game, where users can earn cash through in-game action and activities, and can later spend their income on acquiring more features and tools for the game. Once they become used to the game’s economic model, you can offer them the option to purchase in-game coins through in-app payments. You’ll be surprised how many users are willing to spend a few bucks to shortcut their way to more features in their favorite mobile game.

This is a model that was perfected by Crossy Road, a free-to-play game developed in 12 weeks that managed to generate $10 million dollars in the first 90 days of its release. In Crossy Road, users can amass coins by hopping across the playing field, which they can later use in the game’s marketplace to access special content. For hardcore fans who are in a rush to unlock marketplace features, they can make in-app purchases with real money.

Crossy also uses a clever advertising model that eliminates the invasiveness of ads. Users can opt to view ads in order to earn in-game coins.  This is a win-win situation for all parties involved: the player, the advertiser and the developer. Although this might damage the in-app purchase feature a bit, it will appeal to a much broader audience and will generate a steady flow of cash for your game. And the Crossy Road experience shows that a considerable percentage of the users who watch ads to earn coins will eventually turn to in-app purchases. You’ll find a lot of honest gamers who will reward the developers of their favorite game for all their hard labor.

Paid app expansion set

This will work with well-established games that have been running for a considerable amount of time – at least six months – and have a solid user base that continues to grow. When putting up updates and expansions for the game and adding new features and fixes, you can kindly ask the users to pay a minimal fee for the upgrade, which many will happily contribute, especially if your game has become a favorite. In order to make this strategy work better, you can set up a customer feedback program which will allow users to give their opinion and requests for future versions of the game. This way, you give the users the impression that they’re taking part in the development process, which will make it more likely for them to make donations, especially if they see on of their wishes come true in the latest update.

Monument Valley implemented this strategy successfully, allowing players to burn through the original ten levels for free, then giving them the option to pay a $2 fee for the Forgotten Shores add-on.

Closing thoughts

The in-app payment model has the huge benefit of gaining the user’s trust before asking for payment. Combined with creative ideas and when applied on the right type of app, this model provides for countless opportunities to monetize your game without pestering your users. Many developers, such as the creators of Clash of Clans, have made their fortune this way. It might work for you too.

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