Mobile Games Revenue Models! Thiago Paiva! ! Blog: http://startupbizmodel.com! Twitter: @ThiagoPaiva!
Introduction!Today, smartphones are a great way to play games like Angry Birds and Zombie vs Plants. These casual games are easier to be done, which allow independent developers to make their own games too. But they usually don’t know very well about the revenue models they can use to mone?ze their games. That’s way I had the idea of doing this presenta?on. Here I will present the most common revenue models for mobile games, explain a liEle bit about their pros/cons and give some examples.
Selling Games!This is the most common way games developer uses to earn money, because it’s the easiest one and have good results. Good: Easiest model to use and users are very familiar with. Cut the Rope, Angry Birds and Zombie vs Plants are successful example of Bad: games that used game selling. One ?me revenue, hard to deﬁne prices and less users Best alterna?ve to new game then free to play games. developers. The only diﬃcult here is to deﬁne best price to sell the game.
Startup Biz Model – Brazilian Startups Business Model www.startupbizmodel.com Awesome Brazilian Startups Business Model Analysis Advertisement!Other simple form to earn money with games is using ads inside games. We have 3 diﬀerent approaches to that: Best, Fun & Cool Games uses preEy well cross-‐ads games to promote their • Nego?ate directly with third-‐ best games, Bunny Shooter is an party to put their ads. example, that they used cross-‐ads to • Nego?ate with an ad network lead to it and them mone?ze it with to put ads. ads they nego?ate directly. • Use cross-‐ads games in poor or old games to promote one iAds is an ad network that makes it that can be mone?ze more. easier to put ads in games. Good: Bad: Users aren’t charge for this and Less money per user, need great user allow apps to be free. base to make good money.
Subscription!In the subscrip?on model, users pay a fee per month (usually) to play. The good thing about this model is that provide recurring revenue, instead of a one ?me selling a game, but you need to keep developing for this game so Two good examples of subscrip?on users always ﬁnd something new models are the MMO RPG Order & that makes them want play more. Chaos and the game portal Big Fish Games, both you have to pay for month Good: to use them. Recurring revenue. This model is beEer used in MMO RPGs, Bad: but can be used in in others as social Need to be updated frequently games too. and is diﬃcult to manage it.
In-App Purchases!This is model is proving to be one of the most successful models for mobile games. Usually, game is a free-‐to-‐play game that sells virtual This model is especially good for social goods to let users accelerate things, games like Farm Ville, Smurfs, BaBle get more money or buy special NaDons and Snoopy’s Fair. Where there is thing. a compe??on between the users and they can buy stuﬀs to get beEer than their Good: friends faster. Allow users to spend as much as they want in these games. This model is an applica?on of the Freemium model studied by Chris Bad: Anderson. It’s diﬃcult to use in a good way, need strategy and constant updates. Only a small percentage of users will pay for this. Free, by Chris Anderson: Introduces the freemium model
Advergames! This model is diﬀerent from others, because the game is made to a speciﬁc adver?sement campaign of a company. Good: Games are more simple to be Sprite City and Pepsi Twist Shot are made and game devs don’t run some examples of advergames. all the success/failure risk of Usually, these games are directed to games kids and teenagers. Bad: Games devs don’t run all the Ow, Yeah! success/failure risk of games
Free Games!This may look like a bad idea but is very handy. Game devs use free version of games to promote the paid version, use free games just to promote themselves or in combina?on with other revenue model. Angry Birds Free and Cut the Rope Good: Lite are examples of free games to It’s nice and cheap marke?ng promote their paid version. tool to promote games and makes it easier to get a large Free-‐to-‐play games are been very base of users. successful, because thei create a large users base and mone?ze it Bad: selling virtual goods Have to think carefully to not cannibalize your paid game or other revenue sources.
Sell Real Products!This model is based in make products around your game and sell it, plush toys are the most common example. With this you can increase the bound your You can create almost anything users have with your game and around your game to sell, that goes earn some extra money with from plush toys to shirts and even that. pen drives. But your game needs to be a hit for this be a good op?on. Good: Increase users bound with the Some examples are Angry Birds, game and is another source of Fruit Ninja and Cut the Rope. revenue besides game itself. A good way to do this is licensing to others companies sell the products. Bad: Need users to be fans of the game to buy and need a large quan?ty to worth it.
Using Multiples Models !As you can image, you can (and probably will) use more than one revenue model. Bellow there are some strategies to combine them: Free Game + Ads! This is a good combina?on to earn money both ways, using a limited free version to let people try your game Selling Game! but s?ll mone?zing them with ads and if they like it sell the game. In-App A nice combina?on to have a good number of users and Purchases! mone?ze them in two ways: Selling premium op?ons (ex. + Virtual goods) and ads. This way you mone?ze even the Ads! user that don’t buy premium op?ons Selling Games! This combina?on is a selling game and use in-‐app + purchases to sell virtual goods to maximize the game In-App revenue. Angry Birds use this, if you’re stuck in a level, Purchases! you may pay US$ 0.99 to pass this level.
A little Example!Angry Birds is a great example on how to use diﬀerent revenue models combine. They have 2 apps in Android Marketplace and 2 in App Store with diﬀerent strategies: Free Version + Ads ! Selling Game + Virtual Goods! Free + Ads + Virtual Goods! Selling Game + Virtual Goods! Angry Birds Store - Sell Real Products ! (Shirts, Plush Toys, Pen Drives, Bags…)!
App Stores!Is good to remember that diﬀerent app stores need diﬀerent strategies to maximize a game revenue. Here are the 5 most important apps stores: Blackberry! iOS! Android! Windows! Nokia! You should think carefully before developing a game which one app store is beEer for your game, maybe is not the best op?on to develop a social game to Blackberry plaform but could be an awesome opportunity to develop a casual game.