How can revenue sharing support the F2P business model | Pocket Gamer.biz

Monetisation and user acquisition strategies have changed in recent years as they adapt to market changes and an ever-increasing sense of competition within the mobile games industry. Keeping your game profitable while satisfying players in the long term is a constant battle, which means that more teams are looking at alternate methods to keep players engaged and spending.

In this guest post, Zebedee CSO Ben Cousens offers his insight into revenue sharing and what concepts users may be open to exploring in 2024. Cousens touches on how times are changing, and how strategies towards monetisation and user acquisition may also need to change.

The phrase “you must spend money to make money” is attributed to a Roman playwright named Titus Maccius Plautus, who lived from 254 BC to 184 BC. Two millennia later, the same concept fuelled the growth of free-to-play mobile games through targeted user acquisition spend that brought high-spending players to our games.

Today, with a mobile gaming market characterised by uncertain ROI and low margins, the idea of spending yet more money might feel unpalatable. But there’s increasing evidence that sharing revenue with players is a uniquely surefire way to success for free-to-play mobile games.

Sharing with users

Incentivised gameplay has traditionally been sneered at in mobile gaming, with many developers and gamers alike viewing tools such as offerwalls negatively. Likewise, the relative complexity for developers to integrate the tech and for casual gamers to use it made it unsuitable for most hypercasual games, interfering with the core appeal of simplicity and a straightforward user experience.

The shambles of early Web3 gaming and play-to-earn only deepened cynicism towards incentivised gameplay. However, recent data from Unity showed that offerwalls accounted for more than 40% of ad revenue in racing and card games.

This doesn’t mean that established methods of gameplay incentivisation aren’t flawed, but it does show that users are open to the concept. The next step is to improve the value exchange, which is currently overly focused on making users jump through a series of artificial hoops to drive ad revenue.

Growing the pot

This means sharing revenue with users for simply playing as they would anyway. As mentioned above, making margins even slimmer in these lean times may seem counterintuitive. However, developers can massively improve their retention and monetisation by directly sharing revenue with users, thus taking home a slightly smaller proportion of a much larger pot. For example, Ludo Zenith from Square Enix saw an 82% increase in ARPDAU after integrating ZBD’s revenue-sharing rewards tech, which is actually on the modest side of the spectrum. Looking at more extreme uplift numbers, PlayEmber saw an increase of +350% in revenue per user on D14 in their portfolio of ZBD-rewarded games. These monetisation uplifts directly result from two factors: players that get rewards retain longer and play longer sessions, thus viewing more ads. Fumb Games saw their D30 retention climb by over 1200% in their game Bitcoin Miner and now retains users even past D180, which was far from the case before integrating rewards. And US-based players of Viker’s Wheel of Trivia viewed 177% more ads without churning.

So, while it’s true that revenue sharing may initially involve higher outgoings, this is very likely to translate to the old adage of spending money to make it. Likewise, once rewards are established, it’s possible to adjust the amount of revenue shared with users based on your game’s needs at that specific time, and while every game is different and requires testing to find the sweet spot for reward spend vs impact, it tends to be in the range of 10%-25% of ad revenue. You may even be able to reduce UA spend to reflect the higher retention and more effective monetisation that’s now in place.

Times a-changin’

Incentivised gameplay may have a chequered past, but it’s clear that there is appetite for it among many mobile gamers, even though previous experiences have been far from ideal. Likewise, current market conditions in mobile gaming mean that many developers need to push their monetisation and UA into previously uncharted waters, driven by the reality that the old ways simply don’t work as well, even if the games are just as good.

It’s not all doom and gloom. Improvements in payment tech, which effectively allow money to be streamed fee-free to users in real-time, and upcoming legislation like the Digital Markets Act offer new opportunities around how payments are infused into games, rewarding gamers without drastically altering their gameplay experience. Now, more than ever, Plautus’ ancient saying holds true for free-to-play games: “You must spend money to make money”.

Edited by Paige Cook