App monetization refers to earn revenue after you launch your best mobile app in the market. You need to select the best app monetization model to ensure that your app can stand out in the app store having millions of apps. It is very important to launch a successfull game or app for users but it’s also important to convert those users into revenue by using a proper mobile game monetization strategy.
There are different monetization models available for mobile apps. The most common ones are free apps with in-app purchases, paid apps with in-app purchases, and in-app subscriptions.
Let’s walk you through in-app purchases and subscription monetization models that will help you in deciding which model is best for your game and mobile apps:
A subscription model means that the user can download the app for free and gets access to its content, services, and experiences for renewable or non-renewing durations.
the user will have to pay a recurring fee to keep using the app once the trial period is over.
This model is very profitable for apps with high user engagement as they offer subscribers new features and content regularly to keep them around. These apps include music/video streaming apps like Spotify, Entertainment apps like Netflix, HULU, and educational apps like DuoLingo, etc. The types of Apps that can Succeed with the Subscription Model are content and service-based apps.
This model has two options:
- Non-renewable subscriptions:- It gives users access to content or services from the app for a limited duration. The user has to pay for the subscription-only once during that subscription period. The subscription period usually lasts for one, three, or six months. This model requires users to renew the subscription and the app notifies the user before the subscription period expires. The subscriptions are paid manually and users can also choose whether to buy another subscription.
- Auto-renewable subscriptions:- In this case, users get the app services on an ongoing basis once the user pays for the subscription and it renews automatically at the end of the chosen period until a user chooses to cancel it. It also offers a free trial before subscribing, like Netflix and Apple.
The subscription model requires the developer’s attention to updates of the app from time to time to retain the users by giving them enhanced content regularly. The apps with longer subscription plans get a predictable revenue. 52% of app developers who used a subscription model as a monetization method had a positive impact on their business with increased user base and revenue.
Subscription Model Example:
Headspace:- It offers a guided meditation on relationships, athletic performance, productivity, sleep, depression, and many other topics. It is Growing 50% Year-Over-Year to an estimated $9.3 million worldwide, driven by only subscriptions.
This app is free to downloads and for exclusive content, users are required to pay a subscription fee.
Headspace’s currently subscription structure is as follows:
Headspace has over 65 million+ downloads and 2 million+ paying subscribers and has grown to become one of the top 50 non-game apps in terms of U.S. mobile user spending. According to Sensor Tower, It has passed $60 million in gross revenue across the play stores globally. Headspace app is highly profitable due to the subscription model as it is supported by the fact that its last round of funding is over two years ago.
To know if subscriptions can work for your app:
- Understand your customers
- Evaluate the importance of your app in the user’s life
- Charge the right amount according to delivering value
This monetization strategy is useful for mobile games (extra lives, power-ups, in-game currency) and dating apps (more visible profiles, enhanced options), and other categories. Few examples of games that use freemium monetization models include Pokémon Go and Clash of Clans.
In-app purchases have become increasingly popular, Freemium apps are the new standard in app stores and hence, In-app purchases are becoming popular and is accounting for 48.2% of mobile app total earnings.
Leading mobile gaming publisher generates the majority of company revenue via in-game sales of virtual items. According to App Annie, the total global revenue from in-app purchases hit $120 billion in 2019.
In-app purchase/Freemium Model Example:
Candy Crush Saga is a puzzle video and freemium(free to download with IAP model) game that includes swapping of different types of candy on a game board to match three or more of the same type. The popular IAP products in the game are said to have been for extra lives, extra moves, color bombs, lollipop hammers, and gold bars.
Candy Crush Saga generated $473 million in revenue in the United States between January and September of 2020. The daily gross revenue consisting of in-app purchases of the game in the U.S. in the App Store was $1,941,308 as of October 2020. This game is trending even after 8 years of its launch proves that simple games with an In-app purchase monetization model can survive in the market for a long time.
To know if the Freemium model can work for your app:
a. Find the right balance between user experience and know how much people are willing to pay.
b. Do make sure that in-app purchases feel like a natural part of your app and create an engaging gameplay to get maximum downloads.
Now as we discussed above the two best ads model to increase revenue, Many app developers either use one or combine both models to drive maximum revenue. Nike Training Club app has included in-app purchases for fitness aids and a Subscription model with Premium membership to offer trainer-led workout programs and nutritional guidance in the same app.
It is a critical task to decide the best ad model for any type of game or Mobile app because the monetization method decides the fate of the lifetime of the app.
Contact the Best mobile game app development company, Only that can plan a balanced app monetization model and will help you in deciding the perfect strategy that would satisfy both the user and the app owner at the same time.