mobile games revenue models
DESCRIPTION
You can see more details in my blog: http://startupbizmodel.com (in portugueses)TRANSCRIPT
Mobile Games Revenue Models!
Thiago Paiva!!
Blog: http://startupbizmodel.com!Twitter: @ThiagoPaiva!
Introduction!
Today, smartphones are a great way to play games like Angry Birds and Zombie vs Plants. These casual games are easier to be done, which allow independent developers to make their own games too. But they usually don’t know very well about the revenue models they can use to mone?ze their games. That’s way I had the idea of doing this presenta?on. Here I will present the most common revenue models for mobile games, explain a liEle bit about their pros/cons and give some examples.
Selling Games!
This is the most common way games developer uses to earn money, because it’s the easiest one and have good results.
Good: Easiest model to use and users are very familiar with.
Bad: One ?me revenue, hard to define prices and less users then free to play games.
Cut the Rope, Angry Birds and Zombie vs Plants are successful example of games that used game selling. Best alterna?ve to new game developers. The only difficult here is to define best price to sell the game.
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Other simple form to earn money with games is using ads inside games. We have 3 different approaches to that: • Nego?ate directly with third-‐
party to put their ads. • Nego?ate with an ad network
to put ads. • Use cross-‐ads games in poor
or old games to promote one that can be mone?ze more.
Advertisement!
Good: Users aren’t charge for this and allow apps to be free.
Bad: Less money per user, need great user base to make good money.
Best, Fun & Cool Games uses preEy well cross-‐ads games to promote their best games, Bunny Shooter is an example, that they used cross-‐ads to lead to it and them mone?ze it with ads they nego?ate directly. iAds is an ad network that makes it easier to put ads in games.
In the subscrip?on model, users pay a fee per month (usually) to play. The good thing about this model is that provide recurring revenue, instead of a one ?me selling a game, but you need to keep developing for this game so users always find something new that makes them want play more.
Subscription!
Two good examples of subscrip?on models are the MMO RPG Order & Chaos and the game portal Big Fish Games, both you have to pay for month to use them. This model is beEer used in MMO RPGs, but can be used in in others as social games too.
Good: Recurring revenue.
Bad: Need to be updated frequently and is difficult to manage it.
This is model is proving to be one of the most successful models for mobile games. Usually, game is a free-‐to-‐play game that sells virtual goods to let users accelerate things, get more money or buy special thing.
In-App Purchases!
Good: Allow users to spend as much as they want in these games.
Bad: It’s difficult to use in a good way, need strategy and constant updates. Only a small percentage of users will pay for this.
Free, by Chris Anderson: Introduces the freemium model
This model is especially good for social games like Farm Ville, Smurfs, BaBle NaDons and Snoopy’s Fair. Where there is a compe??on between the users and they can buy stuffs to get beEer than their friends faster. This model is an applica?on of the Freemium model studied by Chris Anderson.
This model is different from others, because the game is made to a specific adver?sement campaign of a company.
Sprite City and Pepsi Twist Shot are some examples of advergames. Usually, these games are directed to kids and teenagers.
Advergames!
Good: Games are more simple to be made and game devs don’t run all the success/failure risk of games
Bad: Games devs don’t run all the success/failure risk of games
Ow, Yeah!
This may look like a bad idea but is very handy. Game devs use free version of games to promote the paid version, use free games just to promote themselves or in combina?on with other revenue model.
Free Games!
Good: It’s nice and cheap marke?ng tool to promote games and makes it easier to get a large base of users.
Bad: Have to think carefully to not cannibalize your paid game or other revenue sources.
Angry Birds Free and Cut the Rope Lite are examples of free games to promote their paid version. Free-‐to-‐play games are been very successful, because thei create a large users base and mone?ze it selling virtual goods
This model is based in make products around your game and sell it, plush toys are the most common example. With this you can increase the bound your users have with your game and earn some extra money with that.
Sell Real Products!
Good: Increase users bound with the game and is another source of revenue besides game itself.
Bad: Need users to be fans of the game to buy and need a large quan?ty to worth it.
You can create almost anything around your game to sell, that goes from plush toys to shirts and even pen drives. But your game needs to be a hit for this be a good op?on. Some examples are Angry Birds, Fruit Ninja and Cut the Rope. A good way to do this is licensing to others companies sell the products.
Using Multiples Models !
As you can image, you can (and probably will) use more than one revenue model. Bellow there are some strategies to combine them:
This is a good combina?on to earn money both ways, using a limited free version to let people try your game but s?ll mone?zing them with ads and if they like it sell the game.
Free Game + Ads!
Selling Game!
A nice combina?on to have a good number of users and mone?ze them in two ways: Selling premium op?ons (ex. Virtual goods) and ads. This way you mone?ze even the user that don’t buy premium op?ons
In-App Purchases!
Ads!
This combina?on is a selling game and use in-‐app purchases to sell virtual goods to maximize the game revenue. Angry Birds use this, if you’re stuck in a level, you may pay US$ 0.99 to pass this level.
Selling Games!
In-App Purchases!
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A little Example!
Angry Birds is a great example on how to use different revenue models combine. They have 2 apps in Android Marketplace and 2 in App Store with different strategies:
Free + Ads + Virtual Goods!
Selling Game + Virtual Goods!
Angry Birds Store - Sell Real Products !
(Shirts, Plush Toys, Pen Drives, Bags…)!
Free Version + Ads !
Selling Game + Virtual Goods!
App Stores!
Is good to remember that different app stores need different strategies to maximize a game revenue. Here are the 5 most important apps stores:
Blackberry! iOS! Android! Windows! Nokia!
You should think carefully before developing a game which one app store is beEer for your game, maybe is not the best op?on to develop a social game to Blackberry plaform
but could be an awesome opportunity to develop a casual game.