2016 and Beyond - Game Monetization Trends PDF

2016 and Beyond:
Game Monetization Trends

By Thomas Wallis
2016 and Beyond:

Video Games Intelligence and our partners at SuperData bring you the
latest trends game monetization trends for 2016. We present you 10
pages of exclusive insight from the vaults of SuperData Research on the
business critical trends that matter for 2016.
This report has been commissioned as part of Game Monetization USA,
the only annual conference focused exclusively on monetization, acquisition and retention of games.
This years event is taking place December 2-3 at the Sheraton
Fishermans Wharf San Francisco and full details are on
www.videogamesintelligence.com/monetization
If you enjoy this report, youll get great value from attending the summit
and networking with the likes of Tinyco, Gamevil, DOTS, Gameloft,
Bandai Namco, IDG Ventures, Google and Square Enix
With this report you also get 20% off ticket prices! Just enter
2016TRENDS at the online checkout. Check out which ticket packages
are right for you here
Superdata Research bring you

unparalleled insight into the
digital games market.
Want more data driven
knowledge from the heart of the
industry? Go here to see more
www.superdataresearch.com/
market-data/
2016 and Beyond:

Monetization Insights for 2016
Weighing up the pros and cons of developing specifically for one OS
rather than splitting your development resource to concentrate on
multiple systems, not to mention the difficulty of creating apps that work
across a range of devices, are issues of paramount concern to developers. These issues are further compounded by the issue of monetization.
How can you ensure a return on your development investment?
Arguably the war of free apps and paid apps is all but won, and free is
currently the clear victor. Not only does a free price point undoubtedly
increase the number of downloads youll see for your app, but according
to Forbes, 76% of all revenue from the US Apple App Store in 2014 was
drawn from in-App purchases1.
The dominant monetization method for Free-to-Play mobile games
today is to combine advertising with in-App purchases. Yet advertising
itself presents a multitude of solutions.
Raise the banner?
Whilst banner ads have, in the past, been all the rage, 40% of clicks on
banner ads are either fraudulent or a mistake2 and developers lose screen
real-estate which could be used to show more of their game. Users have
also become trained to avoid looking at the banner ad itself, instead
favouring the action thats happening on screen the game they are
actually trying to play.
Banner ads then have become more of an annoyance, serving to drive
users to opt for a paid version of a free app that uses banner ads which
in and of itself is one strategy for monetization, but why would you want
to frustrate your players into giving you money?
Interstitials, and offer walls
With many mobile games designed for short gameplay loops, designers
are finding organic locations and times to show relevant advertising to
their players. Interstitials present high conversion rates because they grab
the attention of the player often popping up as a whole screen ad that
must be either clicked through or dismissed.
Offer walls also show some promise, by partnering with companies that
provide services that will be of interest to your players, developers are
finding ways to monetize players in the least obtrusive ways possible
but reward walls should be used with caution. Pushing players towards
purchasing from partners takes them away from the game and can
impact retention.
Get more Game Monetization

insights at
Game Monetization USA
December 2-3 San Francisco
Check out the website for all the
latest agenda and speakers!
videogamesintelligence.com/
monetization
1https://www.appmakr.com/blog/free-apps-vs-paid/
2https://s3.amazonaws.com/www.eventpresentations.co.uk/presentations/videogamesintelligence/
monetisation-europe/2015/day2/1-Oscar-Clark.mp3
2016 and Beyond:

Delighting players when they spend

Rather than seeing users as a cash piata, with monetization as the stick
to beat the money out of them, the most successful developers are
creating ways for users to perceive actual value from the goods they buy
in-game, or anticipate and actively seek out a reward for performing an
action such as clicking on an advert. It has been shown that players are
far more receptive to rewards based advertisements respond better to
rewards based advertisements. A study by Unity Ads, found that if you
give a player the option to watch a video in exchange for a reward 98% of
players will complete the video loop. 3
SUCCESSFUL REWARDS BASED MONETIZATION

RETRY - Retry is a notoriously difficult and frustrating mobile game.
To save their progress, players can earn access to safe points that
saves their progress by purchasing this reqward with coins or via
video ads. The player understands the value they are getting and the
option promotes ongoing gameplay.
SONIC DASH- When players are out of lives players are given the
opportunity to continue playing. Again, by opting to either pay with
coin or watch a video ad, players can continue to enjoy the game
but also are far more likely to follow through on their monetization
behaviour.
PLAYER PERSPECTIVE:
We asked our player panel at the Game Monetization Summit if they
would watch ads in exchange for game rewards and they unanimously said yes. Whilst players on our panel said they were reluctant
to risk money and had an anxiety about the value their purchase
would bring, rewards based advertising made players feel more
certain they would see a return for their investment.

market-data/
3https://s3.amazonaws.com/www.eventpresentations.co.uk/presentations/videogamesintelligence/
monetisation-europe/2015/day2/1-Oscar-Clark.mp3
2016 and Beyond:

Show me the money! Android vs iOS
Elsewhere, whilst Android continues to drive device sales, and even
surpassed iOS in the total number of apps available in 2014 by a whopping
200,0004 Apple still bests Android in one key area: revenue. Piracy is still a
big problem for Android, and shaves off a large chunk of potential revenue
for those looking to make money from the Google Play store.
In fact, apps launched on Apples App Store boasted 70% more revenue
than those found on the Google Play store in 20145. App Annie has also
reported that the Apple App Store built on its lead in the first quarter of
2015 by a further 10%. That is despite Google Play receiving some 70%
more app downloads in the first three months of 20156.
Gaming makes strides in the entertainment market
In the entertainment market, games have made serious strides ahead of
more traditional media platforms. With the proliferation of digital distribution and online-media, the paper lead industries of magazines and
newspapers show decline whilst video games have benefited hugely from
the multiple platforms available for to enjoy video games. The gaming
market shows no signs of slowing down for 2016 and now ranks third in
terms of revenue compared with key entertainment markets showing its
status as a dominant entertainment market.

insights at
monetization
4http://www.businessinsider.com/google-play-vs-apple-app-store-2015-2
5http://www.businessinsider.com/google-play-vs-apple-app-store-2015-2
6http://www.macrumors.com/2015/04/15/app-store-google-play-revenue-q1-2015/
2016 and Beyond:


market-data/
2016 and Beyond:

A new challenger approaches
Monetization strategies are fluid, and what works in one context could be
disastrous in another. The subscription model is notoriously hard to get
right, but has worked in other spheres in the past, such as the MMORPG
space. One relatively new app The Official Kylie Jenner App7 has
made a splash with a subscription model, and in so doing paves the way
for others to trial the model, and the multitude of ways in which it can be
executed.
App Stores too are looking to subscription models to draw a more
dependable revenue stream. Humble Bundle are just one company who
have recently launched a monthly subscription where they provide an
ever changing range of curated titles to their users. If they succeed,
getting your game included in a subscription service might just become
as important a factor in driving revenue as getting featured on an app
store is today.
One nation is on the brink of a Smartphone revolution. With a huge
population of some 1.2 billion people, almost a third of which live within
urban areas, currently just 140 million current Smartphone users and a
GDP of around one and a half trillion USD8, this nation could very well
represent the next big growth opportunity in mobile gaming. But this
nation isnt China, as some of you may have surmised. If youre looking
for growth opportunities in mobile gaming, you need look no further
than India.
7http://www.bluecloudsolutions.com/blog/
kylie-jenner-app-subscription-models-crush-it-in-the-app-store/
8http://venturebeat.com/2015/09/19/all-aboard-the-india-mobile-game-train-is-about-to-depart/

insights at
monetization
2016 and Beyond:

New Markets for 2016 and Beyond

India comes of age
As the Western mobile market continues to mature, all but the largest
developers are finding it increasingly difficult to catch the attention of
consumers. A fresh market opportunity would seem to be just what the
market needs.
But just how big is the market opportunity in India?

market-data/
2016 and Beyond:

Its true that currently there are just 140 million Smartphone users in
a country that boasts a population of 1.2 billion. However the average
wage in the country increased 10.8% year-on-year in 2015 according to
Towers Watson9, and is expected to steadily increase by just as much at
least for the next two years. Across the world we have seen that as the
general population increase their wealth, the demand for luxury goods
such as Smartphones increases in correlation.
In fact, Statista predicts that Smartphone penetration will increase by as
much as 12.2% between now and 2017, to 33.4%10. Whilst this might not
seem a lot compared to the predicted Smartphone penetration of the US
(80% by 2017) or even China (49% by 2017), it is staggering when you also
consider relative populations.
Population boom
According the United States Census Bureau, the population of the US is
set to increase to 326,626,000 by 201711. With a Smartphone penetration percentage of 80, that leaves a market opportunity of 261 million
Smartphone users. India meanwhile will see a population boom, with
more than 1.3 billion people in-country by 201712.
Even with a relatively modest Smartphone penetration of 33.4%, India will
represent a market opportunity almost twice that of the US. In fact, by
2019 the number of Smartphones in India will dwarf that of the US, and
India will perhaps even become the single biggest mobile games market
on Earth.

insights at
monetization
9https://www.towerswatson.com/en/Insights/IC-Types/Reprints/2015/
Overall-Salary-Increase-Projected-for-India-in-2015
10http://www.statista.com/statistics/257048/smartphone-user-penetration-in-india/
11http://www.census.gov/population/projections/files/summary/NP2014-T1.xls
12http://www.statista.com/statistics/263766/total-population-of-india/
2016 and Beyond:

2016 and Beyond: Game

Monetization Trends
By Thomas Wallis
Where to turn for advice
Whether you gate features behind a pay wall ( la Freemium), draw
revenue through in-App advertising, sell virtual products with in-App
purchases or opt for the relatively new incentivized advertising or
sponsored ad model, whereby users are rewarded for completing
certain actions for third parties, the smartest developers are actively
seeking the advice of industry veterans to plan their monetization strategy.
If youre looking for the best monetization advice the industry has to
offer, drawn from the most successful business leaders working in video
games today, you should check out the Game Monetization series
of events. Game Monetization USA is taking place in San Francisco
December 2-3 . Find out more at the website
www.videogamesintelligence.com/monetization/
If you enjoyed this report, youll get great value from attending the
summit and networking with the likes of Tinyco, Gamevil, DOTS,
Gameloft, Bandai Namco, IDG Ventures, Google and Square Enix.
With this report you also get 20% off ticket prices! Just enter
2016TRENDS at the online checkout. Check out which ticket packages
are right for you here
Victoria Lloyd
Project Director

market-data/
10
79 Fashion Street, London, E1 6PX

+44 (0)207 422 4396
US Toll Free: 1800-814-3459 ext. 4396
victoria@videogamesintelligence.com

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2016 and Beyond:

Game Monetization Trends

2016 and Beyond:

Superdata Research bring you

2016 and Beyond:

Get more Game Monetization

2016 and Beyond:

Delighting players when they spend

SUCCESSFUL REWARDS BASED MONETIZATION

Superdata Research bring you

2016 and Beyond:

Get more Game Monetization

2016 and Beyond:

Superdata Research bring you

2016 and Beyond:

Get more Game Monetization

2016 and Beyond:

New Markets for 2016 and Beyond

Superdata Research bring you

2016 and Beyond:

Get more Game Monetization

2016 and Beyond:

2016 and Beyond: Game

Superdata Research bring you

79 Fashion Street, London, E1 6PX

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