Key Takeaways
- Designing game purchases should be at the beginning of the process, along with the game design.
- Outline your products with pricing, beautiful design, and excellent copy.
- Offer a variety of payment options.
- Avoid common pitfalls like pay-to-play scenarios.
- Continually A/B test to maximize your revenue over time.
In-game purchases are a great way to monetize your mobile game and enhance users’ gameplay. Statistics reveal that in 2022, global app revenue from app purchases reached $205 billion – highlighting the vital role of in-app purchase features in mobile games.
If you’re a game developer, this strategy should be a key consideration from the beginning of the app development process, not just an afterthought.
Inventory and product planning, stores, sales, and even abandoned carts, our goal is to help you master game purchases from beginning to end.
Failing to Plan is Planning to Fail
You need a solid strategy to reap the rewards. Take a little time now to lay a solid foundation on which to build your monetization castle. Many games get caught up in the story, game mechanics, and art assets without mapping out their monetization strategy until the latest parts of the development cycle.
This is a big mistake! I’m reminded of Sun Tzu in The Art of War.
By planning purchases along with game design, you can create a natural progression that drives the story. Trying to add this at the end will make purchases feel forced. That, in turn, delivers a lousy gaming experience and bad reviews. Players are smart, and they know when they are being hustled.
Another problem with this is that it leads to technical issues and delays. Anyone with experience in game development can tell you about crunch time. A significant reason for this is trying to bolt on major features like purchases without an upfront plan. You’ll end up with a Frankenstein’s monster that is more likely to attack you than be friends.
The third issue is a need for more financial clarity. A well-run business knows its numbers, and games can be a lucrative business. These include fixed and variable expenses, market size, product differentiation, and revenue expectations.
How can you arrive at a profit/loss estimate without knowing product pricing and units sold estimations beforehand? These numbers are often wrong initially (sometimes just guesses), but they improve over time. If you want to improve the accuracy of your forecast, you need to start from a baseline.
Types of In-App Purchases
There are a few types of items regarding in-game purchase offerings. These include:
Consumables
Consumables are one-time-use items that can be depleted. This could include power-ups, resurrections, level replays, extra tries, extended time, energy, life/health, restoration, etc.
The main point with consumables is that they need to be repurchased, which leads to repeat sales and more predictable revenue. That also means that consumables typically have a lower price point.
Non-consumables (a.k.a. Durables)
These include items that can be purchased once and do not expire or get depleted. For example, that Legendary Sword of Damocles or Invisibility Cloak you created.
Once the player owns it, they don’t have to keep purchasing it again. This typically gives this class of items a higher price point.
Content Unlocks
Of course, game purchases don’t only have to be about in-game items. The original in-game purchase has traditionally been to unlock large pieces of content. This could be the entire game, sets of levels, or downloadable content (DLC) packs.
Subscriptions
Technically, subscriptions can be purchased in-game. But they are more commonly purchased on a dedicated website. Either way, they are a different business model and won’t be discussed further in this article.
How to Plan Your In-Game Purchase
Follow these tips to ensure you have a clear vision that includes your mobile game monetization strategy right from the early stages of development.
What to Sell
You’ll need to make a hard decision on what types of products will sell for real-world currency. This is where it is helpful to have marketing and game design sit down together. If you are a small studio or indie developer, start a new Excel spreadsheet and open your game design doc.
In Game Currency
A safe route for consideration is only to sell virtual currency. The advantage is that the game design isn’t tightly coupled with real-world money and typically lessens the risk of breaking gameplay. It also has the psychological benefit of reduced price sensitivity since purchases are no longer tied directly to real-world prices. The downside is that pricing, sales, and marketing options are more limited to currencies than individual products.
For a deep dive into game currencies, we detail them in our “Coins, Crystals, and Chaos.”
Categories and Products
Next, plan out your products and categories. If you are selling in-game currency, create different bundles and price points. For pricing individual products, review your design doc and start placing items into general pricing groups. Assign them each a price to begin. As your game evolves and design changes, prices should also change to reflect their value more accurately.
Game Store
Creating an in-game store is one of the best ways to showcase a virtual item. Make this as engaging and user-friendly as possible, as it will be your primary sales channel.
Pretty Pixels
Great chefs know that people first eat with their eyes before they put the food in their mouths. Branding is one way that game publishers can make mouths water. It is a multi-billion dollar industry for a reason. The right image and copy sell and sell big.
This is to say that spending time to make your in-game purchase visuals and icons appealing is time well spent. It’s also worth noting that your icons should accurately represent what your users are buying. Don’t stylize them too much; they might feel cheated when they get the item.
Catchy Copy
Most artists will spend lots of time making beautiful assets. It may seem minor, but creating catchy titles and descriptions can be just as important. Try to make them visually engaging and witty, and keep them relevant to your game. For example, naming your items “Bundle A” or “Short Sword” is pretty bland.
Try using visual titles like DOTA 2’s “Ethereal Flames Pink War Dog” or “Legacy Enduring War Dog,” which gives the user a hint about how rare the item is. Alliteration also gives it a catchy ring, like the “Krypt Koin” from the Mortal Kombat series.
If you aren’t good at this or have someone on your team who is, then enlist the help of a story writer or copywriter.
Ensure a Smooth Checkout
Part of the preparation is ensuring your mobile app users have a smooth checkout process. One way to do this is to offer a variety of payment options.
Payment providers like Apple Pay, Google Pay, PayPal, and Stripe enable credit card payments for major credit cards. There are also gift cards, ACH payments, wire transfers, promo codes, and crypto.
Offer various payment options so that making in-game purchases is as easy as possible. Many game publishers miss purchases because their payment method doesn’t align with their customers.
Also, consider international aspects. Popular payment methods in one country don’t automatically transfer to another. For example, most Japanese citizens prefer cash and Kobini payments at convenience stores.
Other considerations include:
- Your product/in-game purchase offering is available in the user’s country
- Product prices are accurately converted into the user’s currency
- Payment requests are processed and validated promptly
- A receipt or proof of payment is provided for the user’s reference
- Active purchases are listed for restoration
Customer Support After Purchase
The purchase is just the start of the journey. Once an item is purchased, you need to provide excellent support. Nothing is worse for customers than for them to spend money and not receive what was promised.
Developers will thus need to ensure the following from their end:
- Verify transaction authenticity on the game server
- Unlock the items/content the user purchased
- Keep track of upcoming renewals and subscription expirations
- Be on the lookout for billing issues
- Address refund requests and payment errors
Setting all this up can typically take two to three months. However, with a partner like Zalance, you can easily set up payments and virtual stores for any in-app purchase.
Find the Best Price For Maximum Revenue and Accessibility
When pricing your in-app offerings, it’s best to balance accessibility and maximum profits. In short, neither make your in-app offerings too expensive nor too cheap. You’ll want to turn a profit, but you don’t want to alienate people by pricing items too steeply.
This might need a bit of trial and error on your part. Use split or A/B testing to find your sweet spot with the highest conversion rate. Split testing is when you display varying prices to different users and measure the conversion rate to see which performs best. The formula for the Conversion Rate is as follows.
Create Value for Money
Everybody loves a good deal. A study on “freemium” mobile games revealed that while lower-ticket items ($1.09) accounted for over 60% of purchases, higher-ticket items ($10.99 to $16.99) also sold well, accounting for almost 18%. Given the price difference, however, the more expensive items are bound to rake in more revenue, even if they rank lower in the number of total game purchases.
So, while you should have accessibly-priced items, you can create tiers offering more value as users move higher up the price ladder. In most cases, developers create more extensive and valuable items and bundles to offer better value even at higher prices. This way, customers willing to pay more will opt for better deals, even if they have to shell out more real-world money.
A good application of this is in-game currencies, like coins. A small bundle of 50 coins might cost more per coin than a more extensive bundle with 500 or 5,000 coins. While you have a smaller, more affordable bundle accessible to casual players, seasoned players and loyal users might spend more upfront on bigger bundles if they feel they’re saving money in the long run.
A field of study called pricing psychology looks to understand how price and pricing models impact customer choices. We have covered several examples of how you can use pricing psychology in your game.
Tweak the Timing
Getting the timing right is crucial for game marketing strategy and sales. This means you’ll need to develop purchase recommendations that you can weave throughout the game. Make sure to deliver these recommended items when players need them the most. This will increase the chances of purchasing. Here are some ideas:
Power-Ups During a Challenging Level
If there are challenging levels that typically take multiple tries before passing, offer power-ups that can boost their performance and increase their chances of succeeding in the level.
Offer a Save Me Option
If your game’s primary goal is to have players get the highest score they can within a single set of lives, offer a “save me” option that allows them to revive their player or set a checkpoint so they can continue playing without losing their score.
Add a Time-Based Upgrade
If you have a lot of time-based actions in your game (growing crops, building stuff, or refilling energy), allowing players to “skip time” is an excellent incentive.
Create In-Game Events
Create limited-time in-game events where users can purchase rare and limited items or discounted bundles to appeal to their sense of competition and urgency.
The same study also revealed that customer demand responds well to external factors such as:
- Day of the week usage patterns
- National holidays
- Mobile usage data cutoffs per month
If you can access such user data, we suggest leveraging it to create perfectly timed offers to drive more game purchases. If, for example, you find that many of your users play on weekends, then you can time offers based on that schedule.
Let them Try Before They Buy
Have your users try a perk or item by issuing the first few (like coins or power-ups) for free while starting the game. You can also allow them to use weapons or skins for a limited time so they get a feel of the item before purchasing it.
This way, you can bank on them getting attached to the item or the convenience they get from the perks. This can be very effective when combined with other strategies, like offering bundles and limited-time discounts for your in-game items.
Leverage Multiplayer Social Influence
Game studios can also leverage social influence to drive purchases. When players see their favorite streamers on Twitch/YouTube, pro players in eSports, or just a friend using an item, they are more influenced to buy. Social validation carries a tremendous weight no matter the medium. And games are not exempt.
Danger Zone: Avoid These Mistakes
Up to this point, we’ve discussed what you should do to maximize your chances of success. But, there are pitfalls that you must avoid, less you sabotage yourself.
Don’t Lock Everything Behind a Paywall
Making an in-game purchase mandatory is rarely a good idea. While you’ve designed offerings to enhance gameplay and user performance, they shouldn’t be a prerequisite for playing your game.
Instead, purchases should provide the option to make play easier or more enjoyable and turn users into loyal customers. Show players how to complete a level, quest, or challenge without paying. But then, show them how much more fun or rewarding the experience would be if they purchased from you.
Pay-to-Win
There is a severe problem if purchase mechanics break the gameplay so that they become pay-to-win. Not only does this cause frustration to the point of abandonment, but it can also cause a public backlash, like in Star Wars Battlefront II.
Instead, make sure your best rewards are, in fact, rewards. Players should spend time grinding out missions and gaining levels to achieve the biggest unlocks.
Submitting to the Google Play Store and Apple Store
If you want to sell on the App Store or Google Play, your game must pass validations with Apple and Google, as both platforms test apps before approving them for distribution in their app stores.
As such, it’s best to be aware of some typical issues that developers usually run into during the testing and approval procedure:
Unclear Terms of Purchase
To avoid unclear terms, the content and price of your in-game purchase must be stated clearly before and after the user pays for it. In the case of subscriptions, the subscription period must also be visible, along with relevant information such as the trial price, cancellation date, and regular prices after the trial period.
Wrong Product Type and Label
Earlier, we discussed the types of IGP you can offer. Apple and Google can flag your app for using the wrong product type, as this can confuse players. For example, if you’re offering a non-consumable product such as an in-game weapon or accessory, but your button label says “Subscribe,” this may confuse customers.
Not Providing Purchased Items
If there’s a lag between the time a user purchases an item and the time it’s made available for them to use, this can cause distrust and lead to rejection. It may also potentially cause bad reviews and refund requests. So, make sure your transaction pipeline is always in good shape.
Conclusion
An in-game purchase is a great way to monetize your online games. If done right, users will naturally want to purchase your products to enjoy the best experience in-game.
But IAP isn’t the only monetization strategy for games. Check out these other strategies to see if there is a better fit for your game. You can also mix different business models to create something unique.
Lastly, if you need help setting up an in-game store, catalogs, or managing payments, Zalance is here to help. Contact us or sign up for our beta launch to stay connected!
FAQs
What does in-game purchase mean?
An in-game purchase is a transaction conducted within an online game. Typically, these transactions involve the sale of game assets and characteristics to increase the player’s benefit or enjoyment to the player.
Why are in-game purchases important?
An in-game purchase is important because it benefits both the player and the game developer when designed correctly. The player receives a premium experience through customized gameplay, extra features, upgraded skills, or other benefits. At the same time, the developer has the opportunity to increase the number of sales transactions over a more extended period, leading to increased profitability.