Mobile game monetization beyond the app stores continues to grow

March 29, 2024 7:58 AM

Presented by Xsolla

VentureBeat was on the floor of the Game Developers Conference this year, and GamesBeat writer Jordan Fragan stopped by the Xsolla booth to speak with Berkley Egenes, Xsolla’s chief marketing and growth officer at Xsolla and Josephine Friday, sales director at Xsolla’s U.S. team. Their focus was a major industry topic: mastering mobile monetization in a still-uncertain market — an especially cogent topic now that major online platforms are being targeted for violating antitrust laws.

In the EU, the Digital Markets Act (DMA) has officially gone into effect — the groundbreaking European law designed to break down the walled gardens of big technology companies such as Apple and Google’s app platforms, which not only take a big chunk out of developer revenue but also previously prohibited direct-to-consumer sales. In the U.S., The Department of Justice filed an antitrust case against Apple, alleging that the company has built a monopoly with its locked-down iPhone ecosystem. And even more antitrust regulations are brewing across major markets.

It’s a huge opportunity for mobile game companies, especially with development costs and user acquisition costs rising, and now that developers have the freedom to connect directly with their players by building their own digital experiences, the monetization landscape has been transformed.

“It’s a continuously growing and evolving situation,” said Egenes. “We’re able to help game developers navigate that process. We want to help them be successful. It’s about taking control of the opportunity to market direct to users and take back a bit of the ownership in marketing their game, really building that community to grow the user base.”

Just last week, Xsolla launched its newest generation web shop, a direct-to-consumer web portal that enables developers to onboard and monetize their players in new ways. Developers can build newsletter, email and social media campaigns, retarget strategically and offer things like promotions on bundled packs, in-game currency, content and more, and then drive players directly to their app. Xsolla also partners with developers to help them refine their monetization strategies.

“We have a team of dedicated gamers,” said Friday. “We can help you understand your users and continue to provide post-launch success management as you continue to manage your store.”

Unlocking global opportunities with new payment options

When mobile game developers launch games in emerging markets, they often see that DAUs and MAUs are high, but the pay rates for paid users are low, added Friday.

“I’ve heard this all the time over the past year: ‘I’m not going to spend a lot of money to acquire users because they’re not willing to pay,’” she said. “But these players are active in their games. We’ve found that the issue is the last step. Players want to pay, but the game asks for a credit card or a PayPal account.”

That locks out a huge chunk of the market. Xsolla addresses that with more than 700 payment methods in over 130 different currencies across 200+ countries around the world. For instance, digital wallets like AliPay or PayPay are available in Japan, and five new payment partners in sub-Saharan Africa. These payment alternatives generate less friction, and deliver easier transactions and higher conversions at checkout.

But it’s more than just payments, Egenes said.

“It’s getting them to be able to scale their reach and grow their games,” he explained. “Take a company that had a humble beginning in Europe. How do you help them move into Asia? How do you help them grow in Latin America? It’s not just one screen. It is not one device. It’s being able to have open opportunities to pay and play the way [players] want to. If you enable that, enable the users to be able to have control over their personal desires, you see more engagement. You see more growth. We’re seeing that proved over and over.”

Optimizing monetization strategies

The Xsolla web shop also delivers the customer metrics that are crucial to building new personalized marketing strategies that increase engagement and conversions. They also help developers get lapsed players back into the fold with things like attractive personalized offers, or building a sense of FOMO, depending on users’ previous purchases.

“With the web shop, you have these opportunities to really engage and be creative,” Egenes said. “Try different things. A/B test. See what works and what doesn’t. Then obviously double down on what does. We have partners that are having up to 25% of their business coming through a web shop because it’s so successful. Their daily and monthly active user rates are going up.”

Xsolla is currently testing a new pay-with-points program which can bring microtransactions to the next level — having points available for a purchase makes it an automatic buy, and with one click, users are back in the game and playing.

Localized pricing is also a crucial tool for success in new markets. Xsolla’s suite of solutions makes it easy for developers to test and develop pricing strategies, offering recommendations for each market, based on their vast wealth of partner data. The platform surfaces the right payment methods for each area, and developers can easily evaluate, test and adjust pricing on the fly.

Finally, Egenes said, when it comes to monetization, first and foremost, follow the terms of service for each platform you launch your game on — and you should launch widely for the best rate of success.

“Gate those into the platforms, and then we can help you market and monetize your games online as well, as we connect it all to the login and launcher systems,” he said. “Do the basic requirements and get that out there. Then you’ll be successful.”

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