Making Monetization Mistakes
Monetization...it's a scary word isn't it? It sounds all fancy and important. It's a very "businessy" term, and as such I'm sure most of us try to ignore it, or avoid it out of fear of its inherit complexity. But well, it's not hard, it's rather simple. In the wise words of Paul Graham (taken from his fantastic essay, How to Start a Startup):
You just try to get people to pay you for stuff.
Really, that's it. You're just trying to find the best way to make money on whatever it is you're doing. The problem is there are a LOT of ways to go about this...what's best for you? Well first, you have two starting points: Is your game going to be free or paid. Think about this a lot at the design phase of your game. As we've (very depressingly, and completely obvious in hindsight) discovered, you can't just take a paid game, release a free version with ads, and expect to make money.
So that being said, let's look at what options are out there for monetizing your game, and let's look at some of the dumb things we've done regarding those options, so you won't do the same!
Well, the monetization path seems obvious, right? You're charging for the game. But then...how much? This is a topic that has been covered a lot in the past, so I'll just highlight some general rules...
- Don't start at $0.99. This leaves you nowhere to drop the price to for sales, promotions, or if you just discover your pricepoint isn't working.
- Don't charge TOO much. How much is too much depends on the game. If it's a long drawn out epic, $5.99 or even $9.99 might be justified. If it's a shorter form game, much higher than $1.99 or $2.99 will be difficult to get.
- Prepare to experiment. Do sales, do promotions, make the price higher for a week, drop it lower for a week, balance it out. It's not about units sold (unless you're tracking on the Top Paid Games/Apps list), it's about revenue.
Most important of all, if you're releasing a paid game you need to find a way to get the word out and make people care. There's a lot more hesitation to trying out a game if it costs money, even if it's only $1.99 or $0.99. The same people who will throw a few dollars away on something at a grocery store that they might not like just to try it won't here. It sucks, but accept it. It's just the way it is. So be prepared to advertise. Yes, that means you're probably going to spend even more money on the game that's already made, just to hopefully get more sales. But it's more important than you know. If people don't know you exist (and with half a million apps out there, that's not hard) they can't buy it.
Advertising is (in my opinion...but I'm more than happy to be proven wrong) a lot more important with paid games than free ones. Free games have the benefit of being easy to try with no commitment. Paid games need to have people looking for them to spend the money, and if people are going to be looking for them you need to make them look. Get the word out before it's released, push it hard once it's released, and be prepared to try whatever you can to keep people caring about it after it's already been released. This is something the "big boys" do very well that indies typically fail at. Once a game is made doesn't mean your work is done. It means the work of creating is done, and the work of promoting begins. Having worked with a lot of big publishers it's something I've gotten to be privy to that I probably otherwise would have never even thought about. Find ways to keep people caring, push for more press, and do absolutely everything you can to keep people interested. The more they think about your game the more they're likely to drop their precious soda money (sorry, not a coffee drinker) on it.
I mean this solely for paid games, but seriously...it's just not worth it. You'll hear a lot of reports about how Android's bigger than iOS, and how it's going to overtake everything and on and on. Ignore it. Focus on your 1 core platform, release what you can, support it as long as you can, and make your money. Sales for paid games on Android are nowhere NEAR where they are on iOS (read a report just earlier today that only 5 Android paid games have topped 250k sales...). It's really not worth the money to port your game to a platform where people don't pay money for games.
Free games are even more difficult to monetize. You have three main options...
- In-App Purchases.
First, let's look at ad-supported. A lot of games do and some even bring in great revenue from it. The problem is if you're going ad-supported, PLEASE make sure that it makes sense for the game and fits in. If it doesn't, you will make next to nothing on it while giving away a product you put a lot of effort (and probably money) into.
I submit for your consideration, The Battle of Pirate Bay: Free. We had this great game, The Battle of Pirate Bay. And as sales started dropping we had this BRILLIANT idea to release an ad-supported version. So what did we do? We said ok let's put a full-screen ad in between levels. For those of you who've played The Battle of Pirate Bay can probably imagine why this was a terribly stupid idea. For those that haven't, here's why...
The way you make money off of ad-supported games is for people to keep playing, and to keep seeing ads. Now in a game like The Battle of Pirate Bay the more you play, the longer the level lasts. The longer the level lasts, the fewer opportunities to see an ad. The fewer opportunities to see an ad, and well you can guess how that effects the revenue. So, with all of the people playing this free game...how much do we actually make from the ads? In the last 30 days...a whopping $0.05. Which means of all the people who have downloaded this free game...if even ONE of them would have purchased the full game for the hefty price of $0.99 instead of us offering the free game at all, we'd have made more money. If one of a full YEAR'S worth of free downloads would have spent the $0.99, we'd have made more. This hopefully goes to show how offering a free version, if not well thought out, not only can yield next to no profits, but can probably even hurt your profits from paid versions. Please, learn from our stupidity. We certainly did with our next ad-supported game, Super Jetpack Dragon IV.
Speaking of SJD4, let's talk in-app purchases. This is the first game we released using in-app purchases, and we learned that again, you can't simply implement a feature and expect it to work. There's currently only a single purchase possible, which is removing the ads from the free version. Having a single option for in-app purchases, that can only be purchased once per user EXTREMELY limits the revenue you can count on from this. It's a nice bonus (the $0.99 from disabling ads is more than we'll make off most users in their usage of the app from ad-views) but in our experience only 1-2% of people will purchase something like this (which goes with other reports we've read...so this might be a pretty good number to plan on).
Make purchases that people can buy over and over. If only 1-2% of people buy in-app purchases at all, you want to make sure those that do can keep making purchases. If this doesn't make sense, at the very least make sure that there are a large number of one-time purchases to be made. Very few people will buy items in-app, but those that do will likely buy more than one. The more options you give them, the better your chances.
Linkshare isn't something we're as familiar with as we've just now started testing it out. What Linkshare allows you to do is promote other apps with a linkshare ID. If anyone follows that link with your ID and buys that app, you get a percentage. More than that, if they follow that link with your ID, and buy ANYTHING on the App Store (or the iTunes Store at all I believe) in the following hours, you get a percentage. Again, this isn't something I have hard numbers to report on (we've just begun experimenting) but Ian Marsh of NimbleBit has stated before that the Linkshare revenue ALONE would have made Pocket Frogs profitable. I'll say that again...without any ads or in-app purchases (of which there are plenty) they would have been profitable from Linkshare ALONE. I'll hopefully be able to follow this up with reports of the same as we get more experience using it...
So there you have it...a bit of an overview on monetization options...some examples of the mistakes we've made along the way...and hopefully a mildly interesting first post for my iDevBlogADay contributions. There's a lot of options, and a lot to consider when choosing how to best monetize your product, and hopefully some examples of how we've failed will help you think about it before you decide. Enough about business...next post, let's talk tech!