People often approach me with questions about how they can successfully monetize their users.

While there are plenty of paths to successful monetization, I’m going to share with you the path that I find most important.

What is a game developer’s ultimate dream?

Most of you would say increased game downloads and game play, more revenue, or higher engagement on social media – as a game developer myself, all of these factors are important to me as well. There is plenty of documentation on how to make games ‘addicting’ and fun to play, and there is plenty of documentation on how a game can gain lots of users.

However, I’d like to share some of my secrets (some, not all) on how games can make money.

Let’s start with free-to-play games.

game monetization

Obviously, you all know that ‘free to play’ games are free to download and to play every day with no limit. Often, the user has limited access to certain features or content. Under this model, the user then has to pay a certain amount for premium content, faster and better features, or more entertainment time. Paying for premium features is referred to as an in-app purchase. In order to convince users that additional features, content, and play time are all worth the cost of the game, we have to provide them with a well-developed, fun to play game.

We need to have good content and a good game economy.

What is a game economy, you ask?

Part of my work is to define the ‘game economy’ for Playtika’s products. When we try to learn what game economy is, we often find complex explanations, usually supported by lots of boring numbers and meaningless metrics. Basically, game economy is what defines everything in your game. The timeline and game progression, placement of the levels, subtle details in characters and environments, etc. – it is the heart of the game itself.

We’ve seen that different economies for the same products generate completely different results for the user. Different game economies can result in different KPIs, different expansions, and varying revenue. Everything can be different depending on the game economy, all because of different formulas that define the game itself. So when it comes to the monetization of games, the progression of the game itself matters more.

game monetization

In our world, monetization happens when a user wants more: more content, more weapons, more coins, more play time, whatever it might be. To convince the user to want more from our games, we must provide them with a fun, captivating game progression that they can’t resist continuing. The user wants a continued game progression.

When we combine great game economy with great content, we monetize the user.

Which brings me right back to where I began – what specific steps can we take to monetize the userThe first step in monetizing the user in your game is found in all genres of games – a simple game action. A game action is the actions a user takes to begin playing. In roulette, this is the spin, in poker it’s the hand, in war games it’s the fighting. In all games, the user must perform a simple base action that he is required to do over and over again.

game monetization

The second step is to convince the user to keep performing that action (and to continue playing our game). In order to do it, we need to give our users some incentive, such as experience points, coins, bigger weapons, more tools, etc. We’ve got to give users some instant benefit in exchange for their actions in the game. Factors like experience points, advanced skills, and new levels all represent game progression for the user. The beginning of this progression starts off easy, then becomes more difficult as the user advances. The incentive to our user to continue to play the game is new content, new levels, advances in difficulty, etc., and the user gets a greater amount of these incentives as they progress through the game.

At each new level achieved, the user gets bigger benefits, incentivizing them to continue playing in our game to continue receiving exponentially more benefits. As the game starts, the user has a set amount of health, coins, lives, whatever it may be; the user can start playing immediately for free. As they progress through the game, they are rewarded with more health, more coins, or more lives, making it easier for them to advance faster. But what if users decide to continue to play the game’s free versions without making an in-app purchase? Here, we get what I call the “conversion point.”

This is the “magic” point in the game when it’s very difficult for the user to continue his progression with only the free benefits. This is the third step – given the option to make in-app purchases that will make the game easier and more fun for them to play. I don’t recommend attempting to monetize the user at that point – focus on making the game increasingly more engaging and difficult to advance from.

In order to do so, I recommend to use the easy to play, hard to master agenda:

  • Present the users with an easy, simple starting point that they can very quickly master and advance onto the next level.
  • Show the user only the necessary functions they need to progress from the beginning level to the second-lowest level. As the game progresses, we reveal more functions and features to the user.

To summarize, we must first engage our users before we can convert, or monetize them by those three steps:

  1. We make our game very fun and very easy to play.
  2. We make the game increasingly more difficult as the user progresses through.
  3. Offer the user the option to make in-app purchases so that the game becomes easy again.

We continue to repeat this cycle throughout the entire game – start easy, make it hard, convert a purchase.

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About Yair Melamed

Yair Melamed is Director of Product at Playtika. He specializes in Product Management, Game Design, Game Economy, User Experience, Monetization, and Project Management.

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