How Do The “Online Game” Companies Make Money?

Microtransactions

With the growth of smartphone and tablet usage, more and more people are turning to their devices to navigate the web. These users are often less focused on the website they are on and more on what’s next to catch their attention.

The most common example of this is with mobile games. Since people are spending more time on their phones and less time on dedicated gaming consoles, developers are looking for ways to monetize their products.

According to a Credit Suisse report, digital gamers around the world earned an average of £15.39 per day in the last three months of 2016.

With so much money to be made from microtransactions, it’s no wonder that major brands like Disney and Electronic Arts stock their mobile games with real-world cash prizes and lucrative licenses.

If you want to create a mobile game, it’s crucial to understand how to make money from it. Luckily, we’ve compiled a list of the most successful mobile game strategies currently available, which will help you become a profitable mobile game developer.

Paid Download

Since the dawn of time, digital retailers have tried to make money from digital goods (e.g., apps, songs, books, etc.). However, it wasn’t until the late 2010s that this strategy started to pay off.

One of the first major success stories came from the mobile game market, where users can download apps for free but have to spend money to advance in the game. This is known as “freemium” gaming.

According to Apptopia, a business intelligence company which specializes in app industry data, the global market share for freemium games stood at 41.1% at the end of June 2017, compared to only 15.1% for paid games.

Since 2015, the market share for freemium games has increased by 17%, while the share for paid games fell by 7%. The growth in mobile game downloads is largely thanks to the success of freemium games. Users download them because they want to try the game before purchasing it. Once they’ve played for a while, they often forget about the game and never think about making a purchase.

You can use this type of model to allow users to explore the game’s features and get a feel for how it works, without having to spend money. If the user decides they like the game, they can then decide to purchase a premium version or continue playing for free.

Luxury Goods

When gamers refer to “free-to-play” games, what they really mean is that the game is free but requires some sort of payment to advance in the game. However, this is merely a form of monetization and doesn’t indicate the type of game you’re developing.

If you want to make real money, you need to create a luxury product that people are willing to pay for.

Since the inception of online stores, people have been able to purchase luxury items online. Whether it’s a simple product like clothing, or more complex items like diamond earrings, you need to decide how you’re going to sell these luxury goods online. Fortunately, there are several ways you can go about doing this. Here are just a few of them.

Partnerships And Affiliations

One of the oldest and most popular methods of selling luxury goods online is through affiliate marketing. Essentially, you create a website which contains links to various luxury brands. When a user clicks on one of these links and makes a purchase, you’ll earn a commission.

Another way to make money from a luxury brand is to partner with them. Instead of creating a website, you integrate their brand into your social platforms (e.g., Facebook, Instagram, and Snapchat). You can use these platforms to show off your newest products and connect with new customers. In return, the brand promises to send you freebies (e.g., sunglasses, hoodies, etc.) If a customer decides to make a purchase after viewing your content, the brand will pay you a commission.

Advertisement

Still haven’t found that perfect item for yourself? Never fear, there’s always the option of using advertisements to promote your product. Since the beginning of time, people have tried their best to avoid ads whenever possible, but sometimes they’re the only way to make a product or service available.

You can incorporate advertisements into your game’s design or within its content. The most popular method of doing this is with video ads. Since people are already spending a lot of time watching videos on their smartphones, why not use this platform to promote your product? By integrating videos into your game, you can show customers how their purchase will help them in the game, as well as provide them with helpful tips on how to use the product.

Not only do video ads provide you with a free method of promotion, but they also allow you to target a particular audience. Depending on how much you want to spend on video ads, you can target people based on their interests, hobbies, or demographics.

Monetizing Mobile Games

If you’ve been following the gaming industry, you might remember that Electronic Arts was valued at over $26Billion back in 2014. This is thanks in part to the success of the EA sports franchise. However, since the industry downturn in 2014, the value of Electronic Arts has decreased significantly. Currently, it is valued at only $7.7Billion

If you’re looking to create a mobile game but don’t want to waste your time developing it, consider investing in a franchise. These are services which allow you to create games based on famous sports teams or fictional characters. You can use the game itself as a means of promotion, while the sports team or character’s name becomes your brand. Furthermore, you can integrate your product with various social platforms (e.g., Facebook, Instagram, and Snapchat), as well as affiliate marketing.

The next step is to choose your licensing option. There are usually two options here: traditional and viral.

With the traditional license, you have complete control over how the brand is represented in the game, as well as the ability to rebrand the product as your own. If you want to create an immersive retail experience within your game, the traditional license is the way to go. Otherwise, the viral license gives you full control over the content but doesn’t allow you to rebrand the product.

If you’re looking for a quick and easy way to make money from a mobile game, consider using adverts or in-game purchases to do so. To go that extra mile, consider partnering with a luxury brand or creating a franchise to promote your product.