Getting something for free simply feels priceless. For this reason, you’ve decided to create a free-to-play mobile game. Now the question is, how to monetize it? Should you go for in-app purchases, in-app ads, or a hybrid model?
We’re here to help you decide.
In-app purchases are a great idea for a lot of games, but not all. Implemented the right way, an IAP model can result in impressive returns.
In this article, we cover all the basic things to know about in-app purchases: what they are, the types, pros/cons, and some statistics.
You will also learn about IAPs across genres, best practices, and how to avoid common in-app purchase mistakes.
Let’s start.
What Is an In-App Purchase: Meaning
Wondering what does in-app purchases mean? Here’s the answer. In-app purchases are one of the most effective monetization strategies in the freemium economy. In this model, players pay real money for features or game items. Depending on the game type, that can be anything from extra lives, coins, weapons, unlocking levels, etc.
This option can be introduced at any moment in the game. However, a common practice in mobile gaming is to strategically offer in-app purchases in situations where the player needs assistance.
Stuck on a level for the 10th time? You can buy your way out.
Typically, in-app purchases are optional and provide players with some kind of additional value. In most cases, spending money on IAPs makes it easier to win, level up, or advance in any way.
Spending money on in-app purchases provides players with a premium gameplay experience. At the same time, it is an extremely valuable and popular revenue source among game publishers.
Moreover, if a game contains in-app purchases, the app stores will clearly state so.
If a user decides to buy something, what’s the process?
It couldn’t be simpler. Some would even say it’s dangerously simple.
When users create an App Store or Google Play account, they can add their card to cover any app-related costs. When the user purchases something in-game, the amount is charged directly to the card. Therefore, in-app purchases are available at the click of a button.
IAP Metrics to Track
Converting players into payers is not an easy task. Aside from having a well-made game and using the best practices of IAP monetization, you should also track the right metrics. The main IAP metrics include:
- DAU (daily active users)
- ARPPU (average revenue per paying user)
- IAP conversion rate
- Customer LTV (lifetime value)
All of these metrics will give you valuable insights into user behavior. Remember, relying on user data is extremely important for optimizing your game’s IAP strategy.
IAP Statistics You Should Know
When it comes to numbers, in-app purchases are especially popular among gaming apps. However, they are common in other app types as well. Here are some interesting stats.
Revenue from in-app purchases is projected to reach $204 billion by the end of 2022. Furthermore, that number is set to grow to $231 billion by 2023, $254 billion by 2024, $271 billion by 2025, and $285 billion by 2026. (Statista)
According to Business of Apps, 79% of gaming apps currently monetize via in-app purchases, while 50% of non-gaming apps do the same.
It’s no secret that, in the freemium economy, getting a user to pay for something is difficult. Especially for the first time. To put it in dollars, getting a mobile gamer to make a first in-game purchase costs an average of $35.42 (Liftoff).
In-App Purchase Types
In-app purchases don’t come in one unique form. With this in mind, to get the most out of them, you need to create your custom in-app purchase strategy.
If you take a look at some of the top-grossing mobile games, you’ll notice they use different models and techniques. This is because different types of in-app purchases work better for different game genres.
In most cases, we can separate them into four categories:
1. Consumable
These are the most common type of in-app purchases in mobile games. Most commonly, they refer to in-game currency, bonus health, or power-ups.
Once the player buys and uses them, consumable items disappear. They can be repurchased at any time. Naturally, every game gives out small amounts of these items for the gameplay to continue.
This type of in-app purchase is perfect for players who don’t like wait times and much hassle. They want consumables here and now, and can get them – for a fee.
2. Non-Consumable
Unlike consumables, once players buy non-consumable items, they have permanent access to them. In the industry jargon, they are also known as unlockable items.
Some examples of non-consumable IAP items include unlocking a level, bonus game characters, cosmetic items, and loot boxes.
This type of in-app purchase is designed to let players unlock the full potential a game has to offer.
3. Auto‑Renewable Subscriptions
Subscriptions refer to regular payments users make to access some kind of premium content. They last a certain amount of time and automatically renew afterward. Once the user cancels, they stop renewing.
In mobile gaming, subscriptions can be implemented as different plans – from unlocking items on a daily basis to accessing an exclusive game version.
When setting them up, you can select how long you want the subscription cycle to be – anything from 1 week to a year. It’s up to you.
4. Non‑Renewing Subscriptions
With this subscription type, the players are able to access premium content for a limited amount of time. After that period ends, the users can renew their subscription. However, unlike with auto-renewables, they have to do it manually.
Other Popular IAP Mechanics
Things like in-game currencies, lives, items, and similar in-app purchases are considered traditional IAP mechanics. Nowadays, there are some more innovative monetization features that are widely used among the top-grossing games.
Time-Limited IAPs
Typically, these kinds of offers are discounted items and bundles. They can be found among most games and genres.
Piggy Bank
The players collect in-game currency through normal gameplay, filling out their piggy bank. When the piggy bank is full, the players need to make a one-time in-app purchase to open it. It is commonly used in Casual and Casino games.
VIP System
This monetization technique is centered around rewarding players who make in-app purchases and other in-game actions. This allows them to collect points and become VIPs. The casino genre utilizes this feature most, but it is common in mid-core games as well.
Battle Pass
After players purchase a Battle Pass plan, they are rewarded with access to additional game content. It is widely used in mid-core games, but its popularity is rising in other genres as well. This mechanic was popularized by Fortnite in 2018.
Loot boxes
Consumable items players can purchase to receive randomized rewards. They are most commonly found and used in RPG games.
Gachas
Named after Japanese vending machines, they work in a similar manner as loot boxes. Players purchase a roll (e.g., spinning a wheel) using in-game currency and get a random item.
It’s interesting to note that most of these mechanics first appeared in classic video games. After they were proven to work, they were passed on to mobile gaming.
10 In-App Purchases Benefits
Building an IAP-based mobile game is a process and an investment. As such, it naturally comes with some advantages and disadvantages.
Let’s cover the good things first.
Your Game Remains Free to Install and Play
When an app is labeled as “free”, it encourages a lot of users to give your game a chance, to begin with. If you’re not an industry-established player, your game should remain free. Furthermore, players who choose not to make any in-app purchases can play the game. This is important as you don’t want to make a pay-to-play game where players can’t advance without making in-app purchases.
It Is Highly Flexible
Unlike the in-app ads monetization method, developers have complete control of what in-game features will be payable and how much will they cost.
For example, you might decide that every player gets free weapons, but if they want to upgrade them, they need to make a purchase. Or that three basic game characters are available for free, but other more exclusive and rare ones cost money. Nowadays, most IAPs relate to buying in-game currency that helps users get premium cosmetics, speed up timers, have more lives/moves, and essentially, get more convenience than the non-paying user.
Furthermore, it’s up to you how much each item will cost. However, we recommend you check out the pricing strategy of similar games to get an idea of what works.
It Draws and Engages Your Player Base
This model positively affects two very important user behavior metrics: engagement and retention rates. When players purchase an in-game item, it has a positive impact on gameplay. For example, the item they purchase might help them complete a particularly difficult level, or they got a new skin which helps them express themselves better. Whatever it may be, in-app purchases tend to make players more engaged.
Players Don’t Have to Look at Ads if They Don’t Want To
Some players expect a completely ad-free experience and are willing to pay for it. This is an option you can provide within your game. However, many publishers like to use the hybrid monetization model where they combine both in-app ads with in-app purchases.
It Boosts User Loyalty
The users are more likely to make an in-app purchase after playing the game for a while. When they’re invested and make regular purchases, they are more likely to return to the game and keep playing it. It makes sense – you wouldn’t spend money on a game and then abandon it. This results in loyal players who stick with the game and look for new offers regularly.
You Get to Learn About User Behavior
Analyzing your users’ spending habits, usage habits, or demographic features gives you valuable insights for enhancing your game. In other words, how people interact with your game and what they spend on can tell you a lot about their motivations and interests.
Helps Identifying High LTV Players
From behavior analysis, you will find out who your most valuable players are. Next, you should focus on keeping these users by providing them with a personalized experience.
Also, knowing this is good for your user acquisition campaigns, as you can focus on finding similar users.
It Can Save Users’ Time
Players are often impatient and want things done immediately. For example, many free-to-play games have wait timers. That means players have to wait to get to a new level or unlock new items. While some don’t mind waiting, others want access to it right now. Because of that, you can offer them an in-app purchase to simply – save time.
It Is Useful for Competitive Players
The users that make in-app purchases are often hardcore players. Making in-game purchases can give them a valuable competitive advantage. However, you need to make sure that players who make purchases can’t get too powerful, as that would mess up the game’s balance.
Option to Offer Discounts
Discounted or time-limited offers are naturally appealing to users. If they are personalized and targeted, even better.
Everybody likes a good deal, so make sure to incorporate it into your in-app purchase strategy.
Downsides of In-App Purchases
There are some disadvantages to this model you have control over, and some you don’t. Here are some bad practices you can avoid making.
The Constant Demand for Money
Some game developers tend to get greedy when implementing in-app purchases. For example, if you have a racing game and a virtual currency, it can be highly irritating if the offer pops up after every race. Even if the game itself is highly enjoyable, this is a sure way to ruin it.
The Game Is Impossible to Finish Unless You Pay
If there is one thing players hate about in-app purchases, this is it. Developers often purposely make games too difficult too early. This makes it impossible to advance in the game without buying something.
Things like this ruin the whole purpose of free-to-play games.
Ultimately, they can result in extremely bad ratings and reviews. After all, the fact is that most players are never going to make in-app purchases.
Users That Unknowingly Spend Money on IAP
This downside is something that can simply happen. You have probably heard stories about children spending large amounts of money using their parents’ devices.
Things like this can lead a game to a bad reputation with no fault of your own. This particular problem can be prevented in app stores’ settings, but many people find out too late.
In-App Purchases vs. In-App Ads
Not sure if you should choose this monetization model over ad monetization? This is a common dilemma.
Let me share some thoughts about both.
First off, note that it doesn’t have to be either IAP or IAA. You are free to combine them. In fact, according to Facebook, a hybrid monetization model like this positively affects user retention.
Naturally, this model expands a game’s player base. Some players prefer playing for free with some ads while some want to pay for a premium gameplay experience. If done right, it can benefit both of these groups.
However, developers are often concerned that introducing ads to their IAP-based mobile game might cannibalize their IAP revenue. You can minimize this risk if you strategically place ads into such games.
Both models come with their own strong suits.
IAP is great for user engagement. If you have players that really enjoy the gameplay, this method can make the game even more interesting and exciting. This results in better engagement and longer play sessions.
Not to mention that if the users already made a purchase, there are better chances they will want to return to the game. However, relying on IAP alone can drive away users who don’t want to pay for anything.
An argument in favor of IAA is the fact that people don’t really hate in-game ads. This is probably because they are accustomed to them and even expect them.
In fact, 73% of players said they are happy with the ad-based monetization model. This is especially true for rewarded video ads. The players that are not willing to spend money, might be willing to spend their time to get something in return.
Are In-App Purchases the Right Monetization Model for Your Game?
When deciding on the primary monetization model of your game, you have to think about what your game is made of – its core loop and target audience.
If your games’ target audience includes casual and/or younger users, this model probably won’t work for you. These types of players see mobile games as a way to kill time when they are bored. They aren’t that committed to the game and consequently, they would rather watch through ads than pay for anything.
However, if your target group consists of mid or hardcore gamers, things are different. These players take game progress seriously. However, this is no rule, since there are many examples of casual games that made the top-grossing charts based primarily on IAP revenue.
Examples of Games That Have In-App Purchases
To be able to find the best strategy for your app, always keep an eye on the other players in the market. Obviously, you should pay special attention to the top games in your genre.
The best thing you can do is put yourself into the player’s shoes and find out what makes them spend. Find inspiration in competitor strategies and see which one you can use for your game.
Now let’s talk about some games that took the art of in-game purchasing to the next level.
Candy Crush Saga
When someone says in-app purchases, my mind goes straight to Candy Crush Saga. This game is one of the pioneers of successful in-app purchasing.
It’s interesting that when the game first appeared in 2012, it relied on both in-app advertising and microtransactions. In 2013, they decided to remove all ads from the game – and that’s when it blossomed. Both the user base and the publisher’s revenue.
In this game, the players begin their journey with five “lives”. Each time they fail a level, they one. Once all of them are gone, they are left with three options: wait half an hour for a life to restore, purchase lives, or ask their Facebook friends for lives. If you had a Facebook account in 2014 and 2015, you probably got a ton of these requests.
These are the top in-app purchases in the game among iOS users:
- Extra Moves – $0.99
- Extra Lives – $0.99
- 10x Gold Bars package – $0.99
The first two are self-explanatory. Gold Bars are specific items because they can be used for multiple purposes – for new lives, moves, as a power-up, or for unlocking episodes. This is the game’s premium currency.
It’s interesting that 97.7% of Candy Crush Saga players never pay for anything and play the game completely free. You read it right. It’s that big of a percentage even for the most successful games.
The secret to the Candy Crush Saga success lies in the number of its users. Despite the fast-paced mobile gaming industry and new titles appearing on the market, Candy Crush Saga remained a strong player to this day. In 2020 alone, Candy Crush Saga generated $473 million in player spending.
Clash of Clans
This Supercell’s strategy mobile game was released back in 2012. Just three months later it became the most profitable app in the US. In a years’ time, it became the #1 grossing game in the world.
How is that even possible?
This game is set in a fantasy world where players build their own villages and compete against others in clan wars. Here, the main in-app purchases come in the form of gems – the game’s premium currency. They can be organically earned in the game, but buying them can speed things up.
You can see that the bundles of gems are the most popular purchases in the game:
- Pile of Gems – $4.99
- Bag of Gems – $9.99
- Sack of Gems – $19.99
- Gold Pass – $4.99
It’s interesting to see that the most popular purchase was the second cheapest offer. Meanwhile, the cheapest one – Pocketful of Gems, priced at $0.99, didn’t make it to the top. We’ll talk about the importance of value for money later in the article.
Since its early days, the game has put a lot of focus into upgrades and updates. The most successful upgrade was made in 2019 when they added a subscription feature – the Gold Pass.
The result?
Seven years after the launch, the game experienced a rebirth. For the first time since 2015, the game had an increased yearly revenue.
To put it in numbers, in 2015, the game reached its peak, reaching $1.8B in revenue. After that, the year-on-year number had a dropping trend, reaching $572 million in 2018. With the introduction of the subscription-based Gold Pass, the revenues climbed to $722 million in 2019.
Gardenscapes
Coming from Playrix, this game is one of the strongest contestants in the mobile gaming industry. It is also one of those that successfully monetize with in-app purchases.
How did this game get people to spend?
The core loop of the game consists of building a garden with resources, playing single-player match 3 games, and receiving rewards for beating levels.
When it comes to building the garden, the players can buy resources in the form of star currency, consumable items, time, bundles, etc. In match 3 games, they can purchase power-ups, extra moves, and extra lives. After beating a level, the players organically receive a certain amount of stars and rewards.
Basically, the secret of the Gardenscapes marketplace is the way it’s integrated into the game context.
Here are the top 3 in-app purchases among Gardenscapes’ iOS players:
- Garden Kit – $1.99
- Handful of Coins – $0.99
- Gold Reserve $2.99
According to Statista, this game generated a total of $3 billion in player spending from 2016, when it was first released, to August 2021 (GameDaily).
Coin Master
Coming by Moon Active, this game has been sitting on the top places of top-grossing charts for a while now.
According to Sensor Tower, in February 2021, it reached $2 billion in lifetime revenue.
Here’s how this casual/casino game makes the big bucks.
The core mechanic of the game is a simple slot machine. However, what makes the game special is how it blends with meta elements.
Coin Master players need to spin the slot machine, gain coins, build their bases, attack other players’ bases and unlock levels.
Most of the game’s revenues come from spinning.
These are the top 3 in-app purchases among Coin Master’s iOS players in the U.S.:
- Small Spins pack $1.99
- Special Small Spins pack $4.99
- Extra Pack v1 $2.99
When players start playing the game, they get a lot of free spins on the slot machine. The more they play, the number of spins decreases. In this situation, they need to wait for them to renew.
Waiting is no option for some players, though.
The main reason players make IAPs in this game is to prolong sessions and skip wait times.
Some other things players can buy in the game are coins (soft currency) and time-limited bundle deals.
Overall, the game’s in-app purchase strategy is pretty aggressive. But since this works for them, it’s obviously a good choice.
In-App Purchases Across Different Genres
We’ve already mentioned that the IAP model is simply more effective with some genres. Generally, it all comes down to the genre audience and their motivation to play.
According to GameAnalytics, the best performing genres in average daily IAP conversion rates are RPG and Strategy games with 1.5%.
Doesn’t seem that high?
What if I told you that, in most other genres, anything over 0.5% is considered good.
Now let’s take a look at a genre split between the two most popular monetization models: in-app purchases and in-app advertising.
According to Unity, 88% of Role Playing games and 79% of Strategy games monetize via in-app purchases. They are followed by Adventure (77%) and Casual games (71%).
The three leading genres all have some common traits and fall into the mid-core category.
When it comes to the casual genre, it is a diverse one. Here, the games that successfully monetize via in-app purchases are usually those that use match 3 features like Candy Crush Saga and Homescapes.
However, according to GameAnalytics, the trend with casual games is shifting towards ad-based revenue, as their average ARPPU and ARPDAU decreased by about 15-20 percent.
Meanwhile, the average ARPDAU for strategy and role-playing games is 5-7x higher than in most other genres.
In-App Purchases in RPG Games
Role-Playing games heavily rely on IAP revenue. In fact, according to GameAnalytics, this genre has 3-4x higher in-app conversion rates than other top-performing genres.
In role-playing games, everything is about characters. For this reason, most in-app purchases in these games should be focused on upgrading them. Here are some of the most common offers in RPG games:
- Additional equipment
- Revive option
- Character ingredients
- Consumable boosts
- Gachas/loot boxes
Some other common RPG features include time-limited offers, bundle offers, and skippable wait times. All of these features are considered basic IAP mechanics.
However, there are some RPG-specific features we found across the top-performing RPG games.
Loot boxes are used by most RPG games. The fact that the content inside is random is a great surprise factor. One of the best practices with loot boxes is offering at least 5 different ones. You can make them time-limited, event-related but also offer them at discount prices.
We’ve already mentioned the importance of characters in RPG games.
And there is one thing you can do about them – offer a lot of them.
How many?
Well, the top RPG games offer 51 or more characters to purchase and collect. This may seem like a lot, but it’s one of the keys to success – as many as 92% of top RPGs use this monetization feature.
In-App Purchases in Strategy Games
Strategy games are one of the genres that drive the majority of in-app purchases. The players in this genre typically have a high lifetime value and are highly competitive.
There are many IAP monetization features strategy games can incorporate, including consumables, craft items, time-limited offers, pay to skip wait times, VIP system, etc.
However, genre-specific IAP strategies include:
- Battle pass
- Purchasable characters
- Purchasable gear
Including a battle pass into strategy games can boost user engagement and user retention. In fact, according to Facebook’s Gaming report, 49% of players would like this feature in a strategy game.
When it comes to purchasable characters, 92% of players said they would like to have this option. This comes as no surprise since strategy games naturally come with some RPG characteristics.
Finally, 71% of strategy games players would like to buy extra gear. This can give the players more power and make it more interesting for them, but also boost further in-app purchases.
In-App Purchases in Puzzle Games
Depending on the game, puzzle games fall into either the mid-core or casual category.
These games monetize both ways – ad monetization is present in 66% of them, while 44% are based on IAP revenue. For this particular genre, focusing exclusively on IAP revenue is not as effective, as puzzle players traditionally don’t make as many in-app purchases. A hybrid monetization system is a better idea.
In puzzle games, you will often find basic monetization features like boosts, skippable wait times, IAP in tutorials, as well as a premium currency.
However, there are some additional features found among top puzzle games:
- Piggy bank
- Time-limited bundle deals
- 6 or more purchasable boosts
We’ve previously mentioned piggy bank as a monetization mechanic. This is how it works in puzzle games.
As the players make accomplishments – e.g., level completion, they earn in-game currency, they slowly fill out the piggy bank. After it’s full, all they need to do to break it is – make a one time purchase.
The trick to this feature is that players get a lot at once – much more than they would get via a regular in-app purchase. Piggy banks can be found across 45% of top puzzle games (Facebook Gaming).
Another great idea for puzzle games is offering time-limited discount bundles. This is a common feature that can be found across 98% of top puzzle games (Facebook Gaming).
Finally, boosters are always a good idea. Helping players climb levels and advance, they are one of the most popular types of in-app purchases. Most importantly, here should be more than one kind of boost. For this reason, 69% of top puzzle games offer their players six or more purchasable boosts (Facebook Gaming).
In-App Purchases in Hyper-Casual Games
It is no secret that hyper-casual games are almost always based on ad monetization. The players are mostly used to these ads, and they are least likely to make in-app purchases.
Because of this and their nature, these games rarely implement in-app purchases. However, some hyper-casual games do include certain IAP monetization features.
Here are some IAP features we’ve seen in top-performing games like Go Knots 3D and Happy Glass:
- Loot boxes – containing different items, boosts, decorations, and characters
- Time-limited bundle deals – discounted currency, items, etc.
- Consumable boosts – anything from damage boosts, shields, to clues and tips
The reason why hyper-casual developers mainly don’t utilize IAP is that they know who their players are. Since these games are played to pass time or relieve stress, it’s hard to expect players to make purchases or become loyal to the game.
7 Tips for Optimizing Your In-App Purchases Set Up and Maximizing Earnings
Wondering when it’s time to start thinking about your game’s monetization setup? The answer is – as soon as in the development phase. Doing so will save you resources and hassle later on.
After all, many aspects of your game will revolve around the selected IAP strategy. Therefore make sure everything works right, plan ahead, and rely on the industry’s best practices.
1. Set the Right Prices
Determining ideal pricing for your game can be tricky. The ultimate goal here is to find the pricing points where you can get a lot of sales and a high return.
While the game is still in the development stage, you can do A/B tests until you find the right price. Simply display different price sets to different user groups and compare their conversion rates.
Of course, after establishing a price structure, you have to stay consistent. Players will naturally have negative reactions to conflicting or changing prices.
Another important thing when it comes to pricing is to include a range of various price points. For example, offer 20 coins, 200 coins, 2000 coins, etc. This way, the players can decide what to buy based on their possibilities and value for money.
Now let’s talk about how high you should set your prices.
According to DeltaDNA, the minimum price point should be above $2.
This may come as surprising since setting lower prices can seem like a good idea.
However, it isn’t.
Data shows anything below $2 typically has a negative effect on the game’s ARPDAU. When it comes to more expensive items, they should always come with better value for money. For instance, buying the above-mentioned 2000 coins should pay off most.
However, watch out for too high prices for certain items or bundles. Spending over $50 on an individual purchase is rare, even with the biggest spenders.
2. Integrate In-App Purchases Into Gameplay
When deciding which items to integrate into your game, get some inspiration from the top-performing games in your genre. Typically, there are mechanics that work better for certain genres. For example, loot boxes can be great for RPG or strategy games, while piggy banks are a better choice in casino and puzzle games.
Your game’s IAPs should simply be worth buying and the player should clearly feel their benefits. For example, power-ups and upgrades are universal boosters that can be applied to almost every game.
Make sure to remember that most of the players won’t pay. For this reason, advancing in the game has to be possible without purchasing anything as well. This is very important for user retention and user experience.
Generally, when integrating IAPs, the key thing is to do it seamlessly and strategically.
3. Introduce In-App Purchases to Players At The Right Time
Timing is a very important factor for successful in-app purchases.
It all starts with the onboarding process. This is where you should first introduce the users with in-app purchases. For starters, you can simply show them how the store works in the form of a game tutorial.
At this point, don’t push to sell. Before you introduce the players to offers, they should feel positive about the game itself.
The first offer should come when the players feel like they need it. For example, the player failed at passing a level a few times in a row. Luckily, you’re here to offer assistance. Also, make sure the first offer comes with good value for money. For example, you can include a starter bundle.
4. Personalize Offers
When trying to persuade the players into making in-app purchases, make it about them. Sending out identical offers to all the players is a big no-no. The least you can do is segmenting your players into different groups based on their user behavior, spending habits, etc.
Ideally, the offers should be completely personalized. For example, you can add the user’s name in the offer text, and even in the item name.
Besides that, always follow the users’ journeys and tailor the messages and offers accordingly.
Let’s say you want to offer your players premium upgrades. This can be a great strategy, but definitely not for new players. Since they’ve just started playing they simply won’t see the benefit of paying just yet. On the other hand, this might work great with already engaged players. This is why you have to separate them into groups.
5. Offer Bundles and Discounts
If you have a stock of items that can be bundled and sold as a package – utilize it. Gather different items together into bundles and sell them at a cheaper price than they would pay for them individually.
Talking about value for money, we have to mention discounts. Including any kind of special offers will make in-app purchases more appealing.
What is even better than discounts? Time-sensitive discounts. According to Clevertap, implementing this feature can outperform other types of promotions by 8%. They can create a sense of urgency and encourage players to make a purchase.
6. Attract Mobile Game Whales
Finding users who spend a lot of money on in-app purchases is hard. This tiny group of users is called mobile game whales. Catching them is of utmost importance for IAP driven games as they make as much as 90% of total mobile gaming sales.
In most cases, users who spend $100 or more during their lifetime are considered whales. However, this almost never happens in the form of a one-time purchase. They spend an average of $20 a purchase (DeltaDNA).
What this means for you is you need to provide them with an encouraging and rewarding purchasing experience.
With more and more mobile games to choose from, catching them is becoming more of a challenge.
If you already have an existing user base, you should dive into analysis to find your whales. Detect your existing spenders and learn all about them:
- Demographics
- Locations
- What other games do they play
- Devices and operating systems they use
- Why they play your game
Doing this will help you both optimize both your gameplay and IAP to drive in-app actions.
Attracting whales is also linked to your game’s user acquisition campaigns. Both Google and Facebook offer you the possibility to optimize campaigns for in-app actions such as in-app purchases.
Targeting users that are likely to spend on-in app purchases instead of aiming for the number of installs might result in catching more big spenders.
7. Don’t Annoy and Bombard Your Users
Talking about best practices for engaging users, it is always recommended to use push notifications, in-app messages, and pop-ups. The key to all of these alerts is making them relevant, timely, and valuable to the user.
We’ve seen this done wrong so many times.
For example, something we’ve seen in games is related to so-called “one-time offers”. These “one-time offers” often appear every time the game is launched. No need for explaining this one.
There is nothing wrong with contacting the players, however overdoing it will have the complete opposite effect. Too frequent and fake offers are a sure way to annoy users and make them hit the uninstall button.
8. Target Highly Engaged Users
Just like you shouldn’t bombard your users with in-app purchase offers, you should also avoid interrupting users who aren’t as engaged. This group will most likely be annoyed with offers as they’re not yet fully on board with the game. Not only that, but they might churn, which is the worst-case scenario. Thus, before trying to monetize these users, you should work on increasing their engagement and retention first. That will make them more open to spending money on your game.
Furthermore, instead of users with low engagement, your primary target audience should be engaged players who come back to your game time and time again and have long session lengths. These players are the most likely to make an in-app purchase as they’re fully invested in the game.
9. Test Everything
My final tip for successfully monetizing a game with in-app purchases is to test every aspect of it – this is the only way you can know for sure whether your tactics are working or not.
Here are a couple of examples of what you should test to get the best results.
As I mentioned before, setting the right prices for your offers can be tough. This is why A/B testing is the perfect solution to that problem. Try out several different price points and see how users react to each one.
Testing offer placements and frequency is also beneficial. For example, a simple A/B test can tell you whether it’s better to place an offer after the first or third level.
You can also test your copy – sometimes just slightly rewording an offer can do the trick and increase the number of purchases.
Final Thoughts on in-App Purchases
To sum it all up, in-app purchases can be a real goldmine for your game. However, there is a whole process behind it, starting while the game is still in development.
The key to success in IAP monetization is knowing who your audience is and what might encourage them to spend.
There are some general best practices that go for all kinds of games. Seamlessly integrating in-app purchases into the gameplay and being moderate with offers are just some of them. It is equally important to keep an eye on your competitors and top-grossing games.
Finally, if you do everything right, this monetization model can bring you better user engagement and user retention. And of course, the ultimate goal – more revenue.
If you feel like you need help finding the perfect monetization strategy for your game, feel free to contact us!
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