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Mobile Game Monetization In 2023 and Beyond

November 22, 2023
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In 2022, the gaming industry generated $182.9 billion in purchases — a 5.1% decline from 2021. While mobile gaming generated $91.8 billion — representing 50.2% of the overall total — the sector saw a 6.7% decline, according to Newzoo. As the mobile market stabilized, new challenges emerged for mobile game businesses that directly impact revenue goals. This article will explore mobile game developers' and publishers' climb to maximize player monetization and revenue in more detail and share best practices of using a trending ecommerce strategy to future-proof their growing game businesses. 

New opportunities, new challenges

Following the post-COVID downturn, the mobile market did indeed rally and the gaming sales outlook is improving. Still, developers and publishers must learn to mitigate an ever-shifting market's new pressures.
  • Increased competition: The mobile gaming landscape is expanding as developers release new games every month. It can be a struggle for developers to stand out from the crowded market to attract players.
  • Sluggish player spending: While global player spending on mobile games surged during the COVID-19 lockdown, in the first half of 2022, the market saw its first-ever year-over-year decline. In 2023, Mobile game spending dropped 5% as the cost of living increased, and consumers cut back on discretionary purchases.
  • Market volatility: In addition to macroeconomic shifts, mobile game platforms repeatedly change their features and pricing, making it difficult for developers to keep up and ensure that their games are visible to players.
  • Platform policy changes: Mobile game developers must comply with the policies of app stores where they distribute their games. These policies can be complex, prohibitive, and can change frequently. Two recent examples from industry leaders impacted thousands of small and medium game businesses.
In response to consumers' growing desire to have more control over how companies use third-party data, Apple rolled out its Apple Tracking Transparency (ATT) initiative in April 2021. New App Store Guidelines included a requirement that apps must gain users' permission before they begin any third-party tracking.  A publicity firestorm of controversy erupted after popular game engine developer Unity's September 12, 2023 announcement of a “Runtime Fee” targeting Unity Engine developers forced the company’s stakeholders to backpedal. Unity's president revised the fee policy to affect only game creators using future versions of the software — BUT only until a developer's combined funding and revenue reach a $200,000 threshold.  Given today's rocky playing field, mobile game developers must remain malleable. Openness to new methods, solutions, and tools makes adapting to current and future market shifts less impactful to their long-term business success. The ability to monetize players beyond third-party tools and control revenue and player data — while complying with app stores' and other platforms' guidelines — propels mobile game businesses to flourish. 

The power of D2C web sales

One potential solution to an increasingly volatile marketplace is web monetization — a refreshed approach to direct-to-consumer marketing and sales that promises more incremental income, stronger connections with players and brand reinforcement for mobile developers and publishers worldwide. Web-based monetization can help mobile game developers overcome challenges in several ways:
  • Reduced reliance on advertising: Web monetization can help developers mitigate online advertising expenses, which can be an unpredictable source of revenue.
  • Increased player engagement: Web monetization can help developers multiply their return-to-game rate and the duration of gaming sessions by giving players a direct way to support the games they enjoy.
  • Improved player retention: D2C sales can help developers ensure players' long-term devotion by making it easier to enjoy uninterrupted in-game sessions without stopping to spend money.
  • More control over revenue: Augmenting app stores' sales with a web store allows developers to set prices and keep a larger revenue share. More game content income combined with lower expenses equates to heftier profit.
Overall, web monetization is a promising solution for mobile game developers looking to ensure long-term success in an often hard-to-navigate world economy.

Web Shop: a game-centric solution

Xsolla Web Shop is a multi-feature solution that empowers mobile game developers and publishers to grow revenue. It's a game-changing D2C tool that lets game businesses shift in-app purchases to a game-branded web store. Web Shop expands reach, boosts player loyalty, and maximizes profit potential by making game-related purchases simple, friendly, and value-rich. An online store added to an arsenal of selling tools offers many benefits to developers and players — the most significant is that it maximizes monetization effectiveness.
  • The proportion of paying users increases due to a selection of 700+ payment methods worldwide.
  • Customizing the user interface to a game's brand or a specific audience is simple and presents a familiar backdrop that multiplies online visits and purchases.
  • Creating special offers that appeal to new users and VIP whales raises the value of game content above what players can get in-app.
Launching a web store helps capture new players who have yet to purchase and existing users who appreciate an expanded selection of payment methods.

Online store best practices

Just as a game's virtual items need to be used at the right time in the right way to advance the experience, game businesses must thoughtfully stock and price a web store, then market it in a way that entices customers to venture outside the app store and shop online. We analyzed methods of engagement, retention, and monetization from clients actively using Xsolla Web Shop to drive revenue. Based on our analysis, we can draw the following conclusions:
  • Online game stores with the best user retention and monetization typically use 2 to 6 methods of engagement and monetization concurrently. Also, the frequency and percentage of repeat purchases in such shops are higher.
  • 50% offer bonuses or discounts when players buy through their online shop. Players quickly understand the benefits of purchasing through this platform and, over time, anticipate bonuses or price reductions for game currency and in-game items from developers.
  • 50%+ of web shops use special and limited-time offers to improve monetization.
  • 25% of web shops post offers with price points above $99.99.
  • 25% of online stores use a VIP or loyalty program, typically doubling the number of transactions. This rewards system enables you to give users additional benefits without reducing the cost of currency and items available for purchase.
  • 2 games in our research developed a progress rewards plan that gives players advantages as they advance inside the game. This incentive maximizes the quality of the game experience and encourages users to return to the game to continue their progress.
  • 2 online stores leverage personalization - offers optimized to a specific user's (or group's) characteristics and increase the likelihood of a purchase. In addition, as players progress and master new content, offers, and opportunities are presented, spiking player satisfaction, engagement, and the game’s web store usage.
  • Only 2 out of 12 web stores mirror identical sets of currency and goods to their in-game shops, so they are less likely to be successful.

Next steps

If you're looking for a way to augment your in-game revenue, consider Xsolla Web Shop as a first step to reduce risks, retain control of revenue and data, and ensure long-term viability. Xsolla is ready to assist you with the simple, fast implementation of our Web Shop solution. With more than 18 years of proven experience, we can immediately tackle and resolve your most daunting challenges while protecting your revenue streams and helping you comply with third-party platform requirements.  Existing and new Xsolla partners ready to integrate Web Shop can create or sign into a Publisher Account today.  If you'd like to hear more about other potent direct-to-consumer solutions — including Game Sales, Digital Distribution Hub, Rewards, Xsolla Mall, and Cloud Gamingbook an appointment with an Xsolla expert. We're here to help.
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