Mastering monetization: Strategies for financial success in game development

Game monetization is an important aspect of gaming entrepreneurship as it allows you to generate revenue and support game development efforts. Mobile game monetization involves various strategies and methods that game developers use to generate income. In this article, we’ll look at different revenue models that will help you successfully monetize your game. We will analyze various game monetization strategies and ideas from different perspectives to give you a complete understanding of the monetization process.

Monetization at different stages of development

Monetization in the early stages (prototyping, alpha)

An alpha version of a video game means the first working version, but not sufficiently tested. The goal is to use it in a working group consisting of programmers, analysts, and project managers.

• The purpose of an alpha is to gain insight into the project, fix bugs, and understand what features should be added, changed, or possibly removed. 

There are usually several alpha versions, and sometimes there may be a pre-alpha, which is the initial version of the software. Once a more complete and stable alpha version is obtained, we can move from internal to external testing, and thus the beta testing phase will begin. At this stage of game development, Crowdfunding, Steam Early Access, Twitch and YouTube donations, and sponsorship may be suitable monetization options.

Monetization at later stages (beta, pre-release)

The beta version of a video game is a fairly stable and complete software product to which you can make final changes before the final version is released. 

• The purpose of a beta release is to begin testing the software with third parties, that is, users who are expected to try the product and report any bugs and observations about its functioning.

At this stage of game development, suitable monetization options may include advertising, subscriptions, and in-game purchases (sale of in-game items, additional levels, characters, missions, etc.).

• The main goal of the public beta as a whole is not so much to discover tips that may come from users regarding playability but to understand the system’s ability to handle more connections. This is especially true for multiplayer and multiplatform or cross-platform projects.

Monetization after game release

After the official launch, the technical work does not end. To maintain the long-term interest of gamers, the game must continue to evolve. Updates, in-game events, and new characters will help the game remain popular even after many years.

At this stage of game development, suitable monetization options may include merchandising, additional content and expansions, paid tournaments, as well as the sale of licenses to use characters, etc. Microtransactions are a way to monetize a game long after release and a means of marketing a game that goes far beyond its original strategy. They keep customers engaged, which means they stay longer.

Attracting investment in gaming projects

We can categorize investors into two types: strategic investors and financial investors.

• Strategic investors are large game companies. The interest of a strategic investor is to integrate the company into its structure and gain profit through synergy with its structures (acquire a studio and involve it in the development of its projects) and increase capitalization (acquire a controlling stake or the entire company and add its revenue to their own).
• Financial investors are venture capital funds. The goal of a financial investor is to finance an early-stage company, get a stake, help the company grow, and sell its stake when the company is worth several times more.

The difference is that a strategic investor gives more resources because he integrates the company deeply and the company becomes part of a larger structure, while a financial investor gives more freedom and leaves the possibility of working with other investors in the future.

For those investing in a crowdfunding campaign, it is an exchange of capital for a product. For the investor, the investment is a means to multiply capital. And the publisher is interested in collaborating on a product or franchise. Whether the company is profitable and what happens next is not very important. Often publishers have a strong influence on the product and control the entire marketing part. In premium mobile games, publishers offer more interesting partnerships, and help with company building and strategy, but very rarely invest in startups and early-stage games.

Marketing game projects to attract funding

One of the highest quality channels is introducing the company to people you know, portfolio companies, and friendly investors. Here are other popular channels for attracting investors:

• Trade shows and conferences. Investors often participate in profile events and mentoring sessions. 
• Datamining in analytical services. As soon as you start earning or attracting serious audience volumes, you will immediately get on the investors’ radar and they will contact you themselves.
• Cold contacts. Every fund and large game company has a website, contacts, profiles on social networks, and so on. To contact them, you can write a letter, message, or respond via a form on the website.

Proven methods for monetizing games

At one stage or another, developers ask themselves how to monetize a game and where they should start. To monetize game, you can make it free and use microtransactions with advertising or sell the entire game at a fixed price. The key is to make the game not too expensive, but not too cheap. Here are 4 proven ways to monetize games:

Microtransactions (in-app purchases)

A microtransaction in games is a strategy that involves selling items, currency, skills, skins, or game upgrades for a fixed price, allowing the game to be played for free, but with some restrictions.

Examples of microtransactions:

• Sell in-game currency, which can then be used to purchase in-game items.
• Additional weapons that would otherwise be unavailable.
• Improvements that give players a slight advantage in the game.

Direct sales

This is the classic monetization method that has been around the longest and is the easiest to implement.

There are several ways to sell your game:

• Publish the game on a popular distribution platform (e.g. Google Play, App Store, etc.).

• Publish the game on your website with your payment processor.

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Displaying ads is a great way to add extra income to your game by dedicating a small area on the screen where different types of advertising will be displayed (pay per click (PPC), pay per action (PPA), and pay per thousand (PPM)). To start using advertising, you need to register with a popular advertising network and wait for your application to be approved; After this, you will be able to implement advertising in your game.

• Pay-per-click (PPC) ads are a type of ad that pays per click. This means that publishers get paid every time someone clicks on an ad, which is controlled by the cost per click.
• Pay-per-action ads (PPA) are a type of advertising in which payment is made per action. This means that publishers get paid every time someone signs up or buys something from the advertised website.
• Pay-per-thousand (PPM) ads are a type of ad that pays per thousand impressions. This means that publishers are rewarded for higher impressions.

Subscription model

A subscription business model is a type of game monetization strategy that involves charging a monthly fee in exchange for additional features or improved functionality.

Examples of in-game subscription features:

• Give players the ability to create their gaming rooms.
• Access parts of the game that would otherwise be blocked.