Is a Hybrid Approach the Future of Mobile Game Revenue? New Report Says Yes
A new study from AppsFlyer paints a compelling picture of the evolving landscape of mobile game monetization. Their 2024 State of App Monetization report suggests that mobile game developers who embrace a hybrid approach, combining in-app purchases (IAP) with in-app advertising (IAA), stand to reap significant rewards.
The analysis reveals compelling evidence of the hybrid model’s success, particularly for mid-core mobile games on Android. These games, which offer more complex gameplay than casual titles, saw a staggering 146% return on ad spend (ROAS) by their 90th day when using a hybrid strategy. This dwarfed the results of IAP-only (93%) and IAA-only (58%) models, underscoring the potential of diversification.
Even hypercasual games, known for their simplicity and short gameplay sessions, demonstrated a slight advantage in average revenue per user (ARPU) with hybrid models. While the profit margins in this genre are famously slim, the difference between hybrid ($0.60 ARPU) and IAA-only ($0.47 ARPU) on Android was noteworthy.
However, the report cautions against a one-size-fits-all approach. "Our findings reveal that when optimized for the app type and audience, hybrid models are producing breakthrough results across platforms," stated Shani Rosenfelder, AppsFlyer’s director of content strategy and market insights.
"For continued success, marketing and monetization teams should utilize ROAS and ARPU to fine-tune their strategies and ensure that their campaigns are align both before and after the install for the best results.”
Interestingly, casual games bucked the trend, showing higher ARPU when relying solely on IAP rather than a hybrid strategy. This highlights the importance of understanding the nuances of each game genre and tailoring the monetization approach accordingly.
Another key takeaway from the report emphasizes the importance of collaborative efforts between marketing and monetization teams. Developers need to meticulously measure ROAS and ARPU, fine-tuning their strategies based on data-driven insights. Balancing user acquisition, monetization, and retention remains a complex endeavor.
The study also delves into the varying effectiveness of user acquisition channels across different game genres. Hypercasual and casual games heavily rely on paid acquisition channels, with 73% of their revenue stemming from these sources.
Conversely, mid-core titles benefit more from organic traffic and brand recognition. Nevertheless, even these games can leverage strategically deployed paid campaigns to maintain user engagement and maximize earnings over time.
As the mobile gaming landscape continues to evolve, adapting to new trends and utilizing data-driven strategies will be crucial for success.
