Game Development Reference
In-Depth Information
Purchasing Revenue from In-App
Payments
As discussed, in-app purchases for free download games tend to be the best way for developers to earn money.
“Paid downloads are something of yesterday,” as Michael Oiknine, CEO of mobile analytics service Apsalar,
puts it. “Everybody or almost everybody has moved to a freemium model.”
He doesn't even recommend charging 99 cents. “You may think, 'What is a dollar?'... but when you have so
many games out there, the end user doesn't have the time” to investigate whether it's worth paying for when
they can just play a slew of free iSO games before they find one they like. “Perception is reality, and they'll
think 'I can get this download for free.'” Oiknine recommends selling your game as a paid download only when
you're going after a niche market.
Still, this does mean only a small percent of your players will pay to play: According to Oiknine, anywhere
between 1-5 percent of players will make in-app purchases, depending on the game.
The United States, Japan, and Korea have the most highly monetized markets for free-to-play payments, followed by Western Europe.
Purchasing Advertising and the Negligible
Benefit of Offer-Based Acquisitions
That mainly means through advertising.
The best and cheapest way to acquire players is through organic downloads—a good game that generates posit-
ive word of mouth and media attention. But in such a saturated market, says Apsalar's Oiknine, you can't com-
pletely rely on this—even when your game is awesome. “At some point you need to go out there and acquire
users .”
At the moment, however, with so much competition in the iOS market, especially from major publishers, the
cost per install (CPI) for a game has increased quickly to nosebleed heights. A year ago, says Oiknine, a deve-
loper could expect to spend about 30-50 cents in advertising and promotion to acquire a new user. Now CPI has
grown to $1.50 per download. Actually, this is a bargain rate, because CPI can cost some developers as much as
$5.
An alternative to straight-up advertising is going with an offer service, or what are often called offer walls .
In these, gamers are given the opportunity to gain some kind of benefit (usually virtual goods and currency in
the iOS game they play) if they install and launch a designated game at least once. (For example, “Download
and play Obstreperous Aviaries once and get a free armor upgrade to use in Moebius Sword.”)
“The problem,” Oiknine points out, “is these are the worst downloads you can get.” According to his analyt-
ics service, 90 percent of people who opt to download a game will typically launch (but not necessarily play)
it just once. The remaining 10 percent will typically just play the game a few times. “And that is the curse of
engagement.”
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