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When it comes to gaming, we all want to win! Gamers want the best experiences, while game developers want to provide the best games and make revenue to develop even more great games.
Technological advances have changed how gamers acquire games and consume content. Today, the cloud hosts content and provides lightning-fast downloads, while mobile devices allow gamers to play virtually anytime, anywhere. The result? New models for distribution and monetization of games.
In the 80s, video game systems and computers entered the home along with boxed software. This traditional retail came with limitations. Gamers had to pay full price for the game upfront, which could be cost-prohibitive, and acquiring titles could be difficult since stores carried limited copies.
The pressure for boxed releases was intense for developers, especially when targeting a release for the annual Christmas rush. Since these games are permanently embedded on media (e.g., Blue-rays, cartridges, etc.), developers had to perfect their code before distribution. They also had to conform to packaging policies set by the console manufacturers, requiring time and money.
Today, most content is downloaded or streamed. As well, in-game purchases and other downloadables often subsidize the upfront cost.
Physical boxed distribution is still around especially for larger publishers and primarily for console games and then augmented with subsequent downloads and patches. Regardless there are still many gamers that like owning a physical copy, that also gives them the option to resell or trade.
Gaming devices are now more connected than ever, which has been led by cellular evolution. Especially in the eras of 4G and 5G, we’ve witnessed the explosive growth of mobile gaming. See our report, The 5G Future of Mobile Games, nicely summarizing this evolution. Today’s digital distribution strategies allow gamers to buy, download, and play games virtually anytime and anywhere. Digital storefronts are now provided by all console manufacturers, major mobile-related companies (e.g., Google Play Store), and for PCs through companies like Valve. Many services facilitate online communities and gameplay and provide additional content like video previews, addons, and relevant news. And game streaming services like Stadia allow for hardware-less gaming (no need to own a console), and all the while avoiding lengthy installations.
Large digital downloads can take time, so developers sometimes split their game into core and separate downloadable modules (e.g., new levels, patches, etc.). This strategy can spread out development and reduce pressure to release a full game all at once. Releasing subsequent modules also allows developers to continually add features and value, especially with subscription-based games, as we’ll discuss later.
There are quite a few ways to create monetization through your games, so let's take a look at a few avenues.
Early mobile gaming was a new medium for people to get used to. In addition, mobile games were often limited by performance and sometimes considered subpar compared to their advanced PC/console counterparts. As a result, these games were often free or very cheap to purchase, so developers had to find other revenue streams. Many types of in-game ads became popular, including:
- Banners: Rectangular ads at the top or bottom of the screen.
- Interstitial: Wraps the entire screen to grab the gamer’s attention.
- Rewarded video: Video that offers rewards for watching/interacting with the ad (e.g., free lives, new game items, etc.).
Unfortunately, ads developed a reputation for being intrusive, interrupting gameplay, and consuming excessive screen real estate, power, and bandwidth. These issues can detract from the look and feel of a game. Fortunately, game developers can be super creative, and many discovered how to integrate ads with their UI and gameplay to benefit gamers. For example, a Rewarded Video ad can reward gamers with an extra life at a difficult part of the game to get them to the next level.
Ad usage ranges from traditional casual games to advanced freemium games like today’s MMORPGs. Developers can integrate ads using services like Google Ads and Ad Mob, which offer rich analytic dashboards. Check out this blog post and webinar for insight on ads for different game genres.
Today, Game subscriptions and Games as a Service (GaaS) are popular with gamers and developers alike. Gamers pay a small, recurring fee to access a game, a catalog of games (e.g., Xbox Game Pass), or a game streaming service. Gamers no longer pay full cost for the game upfront, and often receive value-added features like save point backups in the cloud or full access to multiple games.
Subscriptions work well in genres with ongoing storylines, missions, and gameplay that evolve (e.g., MMORPGs). Developers can optionally develop part of the game for the initial release, while providing regular updates and enhancements like new levels, logic, and characters. Adding value with recurring subscription fees can keep the game refreshed while reducing initial game development costs. The key is to find the right price point. Check out this article for an overview of mobile gaming subscription services.
Microtransactions are low-cost downloadable content (DLC) that gamers purchase to enhance or change a game. Examples range from new armor, weapons, and loot boxes to new levels, characters, and powerups. Developers often support microtransactions with in-game currency systems that may be linked to real-world payments. They’re a great way to subsidize games – especially free games – where gamers are often happy to make small purchases such as unlocking new levels or adding powerups to get them to the next level.
Developers must balance game progression – with and without microtransactions. If too many purchases are required to make reasonable progress, gamers may feel overcharged. And randomized DLC, like loot boxes, can be perceived as gambling. Some governments regulate and even ban microtransactions for such reasons, so game developers must identify relevant legalities in target regions.
As with subscriptions, microtransactions benefit genres with ongoing storylines or continual progression (e.g., new weapons in MMORPGs, car upgrades in racing games). Their popularity means developers can continually add new and interesting elements to retain gamers. Check out this article for more about microtransactions.
Digital marketplaces facilitated by in-game currency systems allow gamers to buy, sell, or exchange digital assets. They’re also poised to drive the killer apps of new immersive worlds like the so-called metaverses. As with microtransactions, developers must identify the legalities of digital marketplaces. For certain targets, they can unlock new revenue streams for developers and gamers alike.
Digital assets can include DLC from your game studio (e.g., mods, new levels, and user-generated content (UGC). Today, this ranges from in-game items to extras like collectibles that have been digitally minted as non-fungible tokens (NFTs) to ensure uniqueness.
And don’t forget that some gamers love the process of creating UGC. Your marketplaces can help gamers gain recognition and even profit from their creations, and in turn, unlock new ways to increase your game’s exposure.
Make it a Win-Win
Our Snapdragon Mobile Platforms are ready to power all of your mobile gaming distribution and monetization strategies. And then our latest Snapdragon 8 Gen 1 has Wi-Fi 6 and 5G for fast downloads, content streaming, and PC-quality rendering. Similarly, our Snapdragon Elite Gaming features can help to unlock a suite of mobile features that turns premium mobile devices into powerful gaming machines, and if you’re a developer building next-generation, dedicated Android gaming devices, check out the Snapdragon G3x Gen 1 Gaming Platform.
Be sure to plan how your monetization strategies will interweave with your game’s design and genre, as they can affect level difficulty, UI design, and overall progression. Then monitor your strategies with app analytics through KPIs like installs, session lengths, and retention rates to understand the ROI of your efforts. There are several app analytic services you can integrate like those in this article.
Most importantly, always remember your gamers’ passion for gaming and your passion for building great games. Provide the best possible value, and you might create a win-win for gamers and game developers alike!
For additional information, check out the following resources:
- Video game monetization: Summarizes the categories and history of video game monetization strategies.
- Mobile Game Monetization: A Beginner’s Guide: A good overview of the game monetization landscape.
- Business of Apps: News, analysis, and data about apps.
- Level Up Your Game: Key Announcements and Highlights from GDC 2022: Includes announcements from the recent Game Developer Conference in San Francisco, CA.
- Are you developing games for our platforms? Use our Game Developer Guides: Information about some of our tools and SDKs and links to our game development guides.
Snapdragon and Snapdragon Elite Gaming are products of Qualcomm Technologies, Inc. and/or its subsidiaries.