What are modern video game monetization models? Are they free-to-play adventures or one-of-a-kind products that rely on third-party revenue? Customization and P2E solutions help lots of companies save money while also retaining an audience of industry leaders. Let's go back and find out what led to the popularity of NFT game development.
The first boom occurred thanks to a project released back in 2018. Axie Infinity generated $800 million in revenue in August 2021, showcasing its domination in the NFT game monetization models. In comparison, Hades earned $130 million in gross sales from over 7 million copies sold across numerous platforms.
An international survey of video game developers worldwide in 2023 revealed that gaming with monetization is one of the most pressing trends, with seven out of ten polled citing a demand for such a system. In this article, we are going to tackle the evolution of blockchain games and why creating them is the appropriate decision for 2024.
Traditional monetization models
Everyone has felt the tension and misery of a scratched CD. In general, the younger generation did not grow up at a time when gaming store lines were longer than McDonald's queues. Sure, a flash drive could come in handy, except when the game requires a CD to run. In this section, let’s look at the distinctions between the classic and modern.
Retail sales and digital distribution
In the late 1990s and early 2000s, Valve faced the challenge of releasing patches and updates for Half-Life and other lesser-known games. At the time, gamers had to manually hunt for and download patches from numerous websites, which commonly ended in paying for expensive antivirus packages at best.
The development of Steam began in late 2002. Valve demoed an alpha version of the platform at the Game Developers Conference (GDC) in March 2002. Steam officially came into existence on September 12, 2003. Cross-platform interfaces were gradually gaining traction, as were communities that hardly had to spend time in line to purchase their favorite titles illegally. Everything was decided in an instant with a few clicks. Summer and winter sales created a considerable overhang, while video-game businesses selling CDs were gradually disappearing.
Subscription-based models
Cataclysm could have been on the same digital drive as Warcraft III. However, in the distant 2000s, this would have meant publishing new batches of CDs optimized for newly developed motherboards and visual cards.
Blizzard Entertainment's Battle Pass subscription service enables players to:
- return to their favorite game,
- get a quick start,
- Catch information about expansion packs through email notifications rather than relying on friends after several months.
As a result, the corporation faces a lower risk of losing the community and maintains constant gaming traffic. Rise of the Death Knights, the expansion starring Lady Ashara and Sylvanas Windrunner, infused new life into the Warcraft universe. Blizzard stated that the patch helped WoW reach over 1 million concurrent gamers on its debut day. For some, that meant new dungeons and pets; for others, that represented a consistent income and a desire to continue delighting followers. Without digitization, we might have had a full anthology of the series, which would have been prohibitively expensive for manufacturing.
Downloadable content
Releasing a DLC at the correct time is like hitting two birds with one stone: the companies monetize the game, and players will be inclined to play again. Does this rule always apply? That is possible. For example, the release of AC Chronicles: China got positive reviews and contributed financially to the production of Syndicate, one of the series' best games. Mobile applications are slight variations.
The game monetization of mobile applications works as follows. Unlike full-fledged AAA projects like The Witcher 3, smartphone developers have to apply NFT techniques to keep players. It can be challenging to follow a twisted plot on the phone, while it is much easier to open new characters using the P2E system. That served as the foundation for Shadow Fight Arena and Granblue Fantasy, which grew in popularity.
Modern monetization models
How to monetize games? Simple mechanics that engage players in your projects for many hours. Right now, you can choose the best game monetization strategy that will strengthen your brand's position in the universe of mobile app development.
Free-to-play and microtransactions
The game's most popular principle among vanilla and casual is that there is no need for players to pay. FTP has become an established way for companies across multiple platforms to collect data on potential issues and community preferences. More skilled businesses also employ this. When building a huge virtual world, you sometimes forget about the target audience. To avoid such incidents, you should keep in mind chalk and cheese in free-to-play video game monetization:
- Cosmetic purchases. Here, you can customize your gaming avatar with skins, clothing, and other visual enhancements.
- Consumables. Those who have played survival games like Hungry Shark Evolution know the value of first aid kits. They and similar resources belong to this category.
- Strategic purchases. In several titles, such as Shadow Fight 2, the introduction of purchased weapons with magic reversed the PvE progression, making the game 25-30% easier. These game monetization transactions are planned ahead of time to strike a balance between try-hard and wishes of rushing through a boss or location.
Video game monetization in the pay-to-win model should maintain the edge of harmony in the game. Imagine a situation where long-term work breaks a donator – a painfully familiar situation for many players. In Lineage II Classic, the game economy is structured in a way that the catalog of in-game virtual goods for real money is just a game design monetization. In simple terms, the game market regulation occurs with minimal intervention from game developers. For a donation, it is possible to purchase a pet, a cloak, or a hat.
Loot boxes and gacha mechanics
Raid Shadow Legends, Genshin Impact, Solo Leveling, and Wuthering Waves are clear examples of plenty of players' disappointment and respect. Gacha games build emotional swings, ranging from declining char rates on event banners to goldfish from coveted figures. Game monetization is a decision in a blue swing, and collecting spins is solved by a small investment of real money in the seasonal battle pass. A similar solution was made for Shadow Fight Arena, while much better and with a guaranteed receipt of a character and its cast.
Loot boxes appeared in the gaming industry in the mid-2000s and immediately became one of the most discussed topics. This decision to monetize game mechanics was influenced by Asian games, which used random rewards to stimulate players to make additional purchases. One of the loudest scandals around loot boxes occurred in 2017 due to the game "Star Wars Battlefront II," when EA released a balance-breaking donation shop. In this regard, Belgium and the Netherlands recognized this mechanic as a form of gambling and banned it due to non-compliance with the internal standards of the countries. Discussion of the pay-to-win model and its influence continues.
On the other hand, collaborations provide an excellent opportunity to cast a well-known character in a favored scene. For example, in Angry Birds 2, Sonic appears as a game element. He added something new to the game by having a funny appearance and interesting destruction mechanics.
In-game advertising
In 2022, mobile games accounted for 10,7% of total time spent with mobile media, compared to just 3,7% of mobile advertising expenditure in the United States. It is projected that as the share of time engaged hits up, the share of smartphone ad spending will increase. The table below shows varieties of publicity in the form of engine game monetization models.
| Kinds of promotion | Meaning |
| Ad banners | During the game, unobtrusive currency is displayed. |
| Title screen promotion | Full-screen messaging is displayed during crossings. |
| Commercial with a reward | Advertising that delivers game introduction rewards to viewers. |
What's the secret to maintaining balance? Supercell CEO Ilkka Paananen (Clash of Clans) said this: "My favorite question to ask is, “Why do you keep playing the game? And what makes you come back to the game?” Often, players talk about how they love the game, the humor, the characters, and the gameplay as often as they refer to the other players. It really is the clan."
Emerging trends in game monetization
The vast majority of MMO products rely on game monetization models. There is a server, and the application administrator has complete control over it. Blockchain technology has brought a breath of fresh air to individuals who have faced inequity. Let's take a closer look at them now!
Play-to-earn (P2E) games
The P2E concept refers to blockchain games that allow you to earn money while playing. Typically, the longer the activity lasts, the higher the number of tokens the participant earns. Gods Unchained will enable newcomers to jump directly into the exciting world of deck conflict. If those who play Hearthstone for an extended time have a distinct edge, the entry threshold and methods of gaining resources are the same in NFT games. Let us make a tiny contrast.
What to do with outdated HS cards? Only disenchant or try to play in the wild mode, where only masters and skilled players compete. In Gods Unchained, the trading system permits you to exchange real money for unneeded cards. This is the brilliance of blockchain technology in NFT gaming.
Games as a service (GaaS)
What is the secret of GaaS game monetization models? Genshin Impact adopted application marketing methods, and the game has consistently remained in the top ranks of applications worldwide. Events, an appealing character design, a fascinating universe, and miHoYo’s good awareness of the community all contribute to a sense of time well spent. The main benefits of GaaS, like a game monetization strategy, are:
- stable content upgrades;
- building a strong community;
- bond between revenue and product satisfaction.
Special in-game measures and virtual goods that can be purchased for a limited period have always caused excitement and an influx of players. If you don't know how to monetize your game, we can help with the liveops game development.
Hybrid monetization models
The hybridity of game monetization strategy occurs when another augments one core technique. A conditionally free game, for example, could incorporate microtransactions or offers to watch ads in exchange for various "buns". The top element is that when the number of activities or videos watched equals the cost of the application. It transitions from a freemium to a paid version.
The Counter-Strike Major competition best exemplifies this approach. Believe it or not, there are similar tournaments in the mobile app sector. Winners in PUBG and Clash Royale are awarded hefty cash rewards. In 2023, first place in the Clash Royale League World Finals earned the champion $250,000. The entire prize pool for the tournament was $900,000. Second and third-place winners received $125,000 and $80,000, respectively.
Ethical concerns in-game monetization
Real-time communication in mobile games has influenced their monetization techniques, as developers could currently add dynamic pricing schemes and targeted advertising practices, which are typically supported by data analytics and practice monitoring, to maximize their returns. However, they bring up concerns about disclosure, consent, and the ability to exploit entrants' shortcomings. Let's discuss all the topics and points.
The ethics of in-game ads
What has always irritated people about mobile games? Intrusive advertising doesn’t even have cool songs or visuals. Comprehension of blockchain technologies and marketing tools has led to the emergence of a new driving force for game monetization. When collaborating with brands or other products, the player can watch a short promo of up to 30 seconds and receive a useful small item as a reward.
Developers are used to adopting some game monetization models, ranging from subscriptions to in-app purchases. However, just a small percentage of users make purchases there at least once a month. As a result, a growing number of mobile app creators are turning to handheld devices for revenue. The current Internet allows viral promotion, perhaps elevating the game to the status of a meme. Angry Birds 2 became such a game.
Microtransactions and “pay-to-win”
People who are unfamiliar with the inner workings of manufacturing may see the pay-to-win system as follows. The purpose of any donation game is to entice the user and place him in a situation where he is unable to get the desired result with free dollars. Everyone will try to stand out from the crowd if we're talking about models of items or arms. The more expensive the skin, the better it appears.
Blizzard's approach to monetization in Diablo Immortal is a prime illustration of the challenges faced in balancing revenue and player delight. While the game was billed as a nearly complete free-to-play experience (with 99.5% of the material accessible without donation), numerous consumers condemned its extensive earnings, particularly in the finale. The main concerns encompassed the reliance on pricey microtransactions to purchase competitive Legendary Gems and proceed in PvP modes, which resulted in large power discrepancies between paying and non-paying players. This sparked accusations of "pay-to-win" tactics, which undermined the competitive fairness and enjoyment enjoyed by several in the community.
Regulation of monetization practices
Following the events in Belgium, heads of state began to reconsider policies regarding blockchain technologies in NFT gaming. The Australian Classification Board has developed new labels based on the material's incorporation of loot boxes to ensure that potentially exploitative sales tactics are not overlooked. They require that games with loot boxes must be rated as dangerous for persons under 15 years of age with no legal restrictions on access. Those with simulated gambling must be rated R 18+.
China has implemented tight procedures to restrict video game income, and creators are expected to state the likelihood of receiving specific things in loot boxes. Furthermore, restrictions have been imposed on minors, such as the maximum amount of actual money they can spend on a game and the amount of time they are permitted to spend playing games in general, owing to gaming disorder. In December 2023, China proposed restrictions for its video game sector. The restrictions would have targeted many of the most prominent video game monetization elements, such as daily login prizes, bonuses for first-time users of in-game currencies, and loot boxes, which some compared to legalized gambling.
Key metrics for monetization success
What is measurable in metrics? Almost everything, even gameplay monetization. One of the primary factors is the user's lifetime value (LTV). Targeting users with a greater LTV enhances retention rates. Higher committed users result in a reduced churn rate and a greater variety of suggestions. Here are four steps, plus a simple and useful formula, to help you determine the LTV of your users:
- Calculate the average buying value.
- Determine the mean number of transactions made in a given period.
- Monitor user retention.
- Multiply the three scores together.
Now that you have the raw data, it's time to multiply the three metrics together and put them into a formula:
LTV = Average Purchase Size x Number of Purchases x Retention Period
If you don't have the data, you can use the formula below:
LTV = Total Revenue Received Since Install or During a Specified Period / Total Number of Users Who Installed the App on That Day or During a Specified Period.
ARPU (Average Revenue Per User) allows you to examine the channels, networks, campaigns, and so on that you are currently utilizing and decide whether to maintain or eliminate them based on ROI. In terms of mobile user acquisition, this metric supplemented for:
- cost per install (CPI);
- cost per action (CPA);
- A/B testing;
- return on ad spend (ROAS) tracking tools.
ARPU can be calculated with the following equation:
ARPU = Total Revenue / Total Number of Users
Note that "whales" (regular buyers) and the most thrifty players might bias data, preventing you from seeing the entire scenario.
Appropriate use of APRU and LTV yields the king of metrics in blockchain games: conversion rates. The proportion of free users to paid users is typically around 2-5% for most mobile apps, though it can reach 10% or higher in high-end titles or products with exceptional design. A comparison table of the genre and this parameter is presented below.
Combining in-app purchases (IAP) and advertising in mobile games can result in an extremely successful hybrid monetization model. Battle passes, seasonal discounts, events, and specials will keep players on their toes, fostering a vibrant community.
Case studies: successful game monetization strategies
What could be more exciting than the success story of game monetization strategy from well-known video games? It's amazing that few now can match the success of a decade ago. Let's pierce the veil of secrecy and determine whether it was a mystery hazy.
1. Fortnite
Monetize game tools: Fortnite's digital currency, V-Bucks, allows players to purchase cosmetic items that lack bearing on performance. The exclusivity and restricted availability of these things build urgency and lead to elevated spending. The game's publishers collaborate with prominent brands such as Marvel and Star Wars to hold virtual concerts with world-renowned artists. These events attract new players, keep existing users, and create cash through sponsorships and themed material. Thus, LTV can be combined with visual bonuses and in-game microtransactions.
2. Genshin Impact
Monetize game tools: The founders of Genshin initially knew how they would make money. In this case, they blended players' desire to have a large collection of gorgeous character models with randomization, which surely adds spice to the game. Unlike Fortnite, this Chinese gacha focuses on event tasks and battle passes.
3. Candy Crush
Monetize game tools: Candy Crush is a casual match-3 app that, like many of its competitors, earns money through in-game purchases. Since 2013, it has become the most profitable freebie monetization strategy. Bright visuals, a clear narrative, many distinctive models, and lucrative trading attracted 93 million simultaneous online users in 2014.
4. Angry Birds
Collaboration with other initiatives is not a new concept in today's reality. With a well-known brand and appropriate financial resources, this is a viable choice for advertising. As an example of an excellent application of this approach, consider the game Angry Birds 2, which used the character Sonic from the film of the same name. As a result, more people learned about the franchise, enhancing the flow of revenue to both partners.
By breaking down the monetization strategy into fragments and gradually going through each development sector, the aforementioned games realized their audience and captivated each player. Shadow Fight Arena, like its predecessors, does all necessary to stand out and attract enthusiasts of mobile applications.
The future of game monetization
What awaits NFT games shortly: pressure from legislation, complete freedom, and legalization, or the creation of conclaves that will overshadow the titans of the industry? Let's find out!
Integration of blockchain and NFTs
One of the primary benefits of blockchain is its decentralized nature. In traditional games, a single developer or game producer controls all data and transactions. Players acquire greater control over their possessions, fostering a new degree of confidence in their abilities. How can NFT games forecast in-game economies? Among the many microtransactions, it's easy to overlook the apparent approach:
- trading on decentralized platforms.
- tokens can be freely exchanged between games at the edge of the meta-universe.
- coins are retained even after the game is closed.
This means that players are subject to the company's decisions, and their game assets may be destroyed or changed without their knowledge. Blockchain, on the other hand, enables all data to be kept on decentralized servers, with each transaction being visible and immutable.
Expansion of the metaverse
Metaverse and Bitcoin are progressive tendencies that have merged to form a revolutionary union. Virtual worlds with complete immersion and the digital currency required to make use of all the Metaverse's prospects for a fulfilling life. In essence, this is an augmented reality in which people can engage much like they do in everyday life.
Axie Infinity is a one-of-a-kind initiative that allows users to collect, breed, and fight digital animals. Each character is an NFT token, which may be purchased, sold, or traded on specialized trading platforms. All Axie metaverse initiatives allow for the sale and purchase of Axes. Thus, your favorite character may be present in the game you are presently playing.
Subscription and cloud gaming models
Cloud gaming services such as Xbox Game Pass, PlayStation Now (now integrated into PlayStation Plus tiers), and other subscription-based systems are revolutionizing game monetization by offering vast game libraries for a fixed monthly cost. This paradigm is consistent with the broader "access over ownership" trend, altering how users engage with gaming material and how developers monetize their efforts.
Subscription models make it easier for smaller indie games to reach a larger audience. Once on the platform, these games may profit from enhanced accessibility and player interaction. Halo Infinite is an excellent example.
Striking a balance between revenue and player experience
Every blockchain developer hopes to find their Axie. A talisman that will weigh down the wallet while pleasing the fans. Working through all aspects is tough since nothing stays steady. If you're not sure why your dream is fading, or development has stalled, call us, and we'll win this shadow fight.
Consider that business does not break the law. Consider preventive actions ahead of time, such as warnings about the product's age rating, implementation channels, and public relations. Openness in such things will be your trump card. Consider how lovely it will sound from the players: "What a fantastic game! "And it has never been embroiled in a scandal!" Let the imagination turn into blockchain together!
