Mobile Gaming without Microtransactions - Pocket City's Monetization Strategy

Mobile Gaming without Microtransactions - Pocket City's Monetization Strategy

The dominant business model for mobile games is the Freemium strategy, where the app is free but designed to encourage IAPs (in-app purchases), which make the bulk of the game's revenue.

However, a lot of players are getting tired of this model. microtransactions unless cosmetic.

Pocket City is being built without IAPs, which has many players excited. My goal is to create fun gameplay that isn't focused around paid consumables.

Note: I'm not a business expert, I'm a programmer/artist. Here's my anectodal thoughts for my pricing approach.

Other Revenue Sources: Opt-in Reward Videos, Paid Apps

Crossy Road: For every dollar we earn from IAPs, we make two dollars from ads

Opt-in reward videos

In the above video, the creators of Crossy Road are kind enough to give the breakdown of their ads vs IAP revenue. This is interesting, because surprisingly, they actually make more from ads.

I think opt-in rewarded video ads are the best way to include ads. You don't obstruct the game unless the player taps a button, and they are rewarded for sitting through a video.

In Pocket City, I plan to give the player the option of viewing the video every X minutes, to get a small in-game reward. The goal is NOT to create a dependence on it, but for it to act as a bonus.

Ad-free paid version with additional features

Free + paid versions of the game is another strategy. In the premium version, additional value is offered to the player.

In Pocket City, the paid version will contain a larger grid size, the ability to share saved cities in the cloud, and will be ad-free (but the player will still receive the rewards). I still want to add additional features that are still TBD.

My hope is that if players are fans of the free version, they are likely to consider buying the paid version.

Different target audience

Freemium games want to capture "whales". These players make up a tiny fraction of the player base, but provide the most revenue. These players are hooked into the game to repeatedly spend money. By optimizing to make the most out of "whales", you don't have to care as much about the rest of the players.

Pictured: Pocket City's only whale

In Pocket City, I want to appeal to the rest of the players who aren't pulled into the IAP cycle. These "non-whale" players are turned off by the IAP system and would rather pay a simple upfront cost for a premium game.

For a full well made game with no ads or micro transactions I would happily pay $10-15

The comments have been very encouraging. Of course, comments aren't purchases yet, so we will see if players still feel this way when the game is released!

Flexibility as a solo developer

I am actually the solo programmer/artist of the game. Even if it does modestly well, I will be happy.

It's just me making the game (and a friend doing the audio). There aren't as many stakeholders. Less hands in the cookie jar, so to speak. Less pressure to create a game based around a business model, and more freedom to create the game that I would want to play.

Final thoughts - IAPs are not always evil

Many games actually do IAPs well. They aren't all bad!

When IAPs providing additional features, cosmetic enhancements and expansions, they are offering real value and players enjoy them. Players are mostly tired of pay-to-win type IAPs and being forced to pay to get rid of intentional annoyances (such as timers that can be skipped with cash).

Still, I like to keep my monetization straightforward and simple. I think the lack of microtransactions is a selling point in and of itself.

Only time will tell if my strategy will work in the end, but I am optimistic.

I'm throwing money at the screen and nothing is happening.

Post-Release Update, 2019

It's been half a year since Pocket City launched, here are the results:

  • Pocket City has stayed in the Top 100 Paid App charts since release, currently around ~25 on iOS and Android (February 2019)
  • Ad revenue is pretty negligible, virtually all revenue comes from paid app sales
  • Financially, Pocket City has done well for an indie game and exceeded my expectations

Most importantly, for any new indie devs reading this, my recommendation is not to rely on ad revenue and instead focus on paid, up-front sales. Granted, my ad strategy currently not very optimized (I'm not using the best ad provider and I don't show ads very often), but even if my ad revenue was 10x higher, it still wouldn't be close to the paid sales revenue.

It's been a great year, and now I'm working full time on game dvelopment! I'm continuing to update Pocket City, as well as working on my follow up project, which will be an entirely new, space-themed adventure :)