How To Monetize Casual Games
Casual and Social games have a reputation of being light on content and engagement. However, from a game developer perspective, they are a valuable tool for testing game ideas on a playable prototype. Creating a basic casual game allows game developers not only to earn revenue, but also to get user feedback for more involved, longer to develop (and more expensive to make) full feature games.
For those who consider starting their game development with casual games – whether on Flash, HTML5 or Unity – we are listing the ways these games can be monetized. Certain casual and social games can generate more revenue than through the App Store or the Play Market.
The Rise of Casual and Social Games
According to PWC, social/casual gaming revenue will exceed traditional gaming revenue in nine markets by 2019. Globally, the growth of social/casual gaming revenue will create a $22.52bn market by 2019 with the developing countries such as India and South Africa seeing social/casual gaming revenue overtake traditional gaming revenue by 2019. Casual games might not be considered serious enough by the hardcore gamers, but they are a serious business – especially in the cost-conscious developing world.
While accounting for about a quarter of total gaming revenue globally, casual and social games command much greater shares in Asia, Africa and South America. With most creative studios targeting the global audience, ignoring these geographical differences is no longer a smart strategy.
Monetizing Casual and Social Games
Let’s review the major monetization strategies for casual games that involve:
- Other Ways
Advertising is a very common way to earn game revenue, but games have to be already quite popular, otherwise low player base won’t generate much revenue.
The revenue amount can be measured either in CPM (cost per 1000 views) or in CPC (cost per one click). CPM is defined by the quality and size of the audience and the ad itself. CPM is more common for games than CPC.
Generally, advertising comes in 2 categories: in-game ads and portal ads.
In-game ads are integrated into desktop and mobile games through commercials, cut-scenes and background displays. Key market contributors include RapidFire, PlaywireMedia, Double Fusion, Engage Advertising and Media Spike Inc. It is also worth mentioning that a simple market research is essential prior to making such partnerships as you need an advertiser that provides only relevant non-interrupting ads based on a player profile and puts the gamer experience first.
Portals (Revenue Share)
Portals share between 25 – 50% of revenue (through banner ads and pre-game ads) depending on how the game is integrated with their API and exclusivity arrangements with them.
In conclusion, advertising in-game or via the portal should be considered a good, but not necessarily a primary source of income – especially if it is your first game. However, there are some good examples like Zynga who made $153 million (!) in 2014, with only around 20 percent purely from advertising.
Sponsorships / Licensing
Sponsors or licensers are game portals who purchase exclusive rights to market and distribute games.n general sponsorships are the best way to make money with casual games. Sponsorships can be either exclusive or non-exclusive, latter one meaning the game can be published on multiple portals owned by different companies.
Primary License / Sponsorship
A Primary Sponsorship is similar to white label development. Here Sponsor has its branding in every copy of the game on the web except where the developer has explicitly sold a Secondary License (defined below) to another entity. The developer has complete freedom to remove the primary sponsor’s branding and make any other changes to the game as long as it is licensed and locked to the other entity’s domain.
Non-Exclusive License / Sponsorship
A Sponsorship where the license of the game is not exclusive to the buyer is called Non-Exclusive. In this case the buyer is purchasing one custom version of the game, and this version must be “locked” to the buyer’s domain. This is the most common type of non-exclusive license and it is compatible with the primary license.
With both sponsorship types there exist three different types of agreements:
In lump sum agreement, the sponsor pays a fixed amount to buy exclusivity to the game indefinitely or for an agreed upon period of time, before the game “unlocks” and can be distributed on other portals.
How much this fixed amount is depends on game owner’s ability to negotiate, their prior portfolio, the terms, the sponsor, and of course, the quality and potential of the game.
In a performance-based arrangement, game owners are offered a conditional bonus, such as “$50 if the game reaches Kongregate’s Front Page” for smaller games, or perhaps extra cash depending on how many thousands of views the game gets.
Hybrid of Both
Put the two together, and you get a model where game owners get some upfront payment and payment upon reaching certain milestone. Another great thing about Sponsorships is that game developers get access to the Sponsor’s expertise. Sponsors want the game to do well, and in most cases they know what players like. A Sponsor’s advice can be invaluable. Of course, game developers should never feel forced to make changes they feel will hurt the game, but should be open to suggestions a Sponsor may have.
How to Find a Sponsor
Flash game license and personal networking are essentially the two available options when looking for a game sponsor.
Flash Game License is generally considered to be the leading distribution and monetization service for HTML, Android, iOS, Unity and Flash games. FGL offers a number of services to help developers and publishers monetize their games, and also offers a marketplace where game rights can be bought and sold. The network will provide a 1-10 rating for each game offered for sale, with games rated 8 or higher most likely to receive bids. There is no upfront cost and the service takes a 10% commission on completed sales.
Another way to win a sponsorship is through contacts and people one knows. While personal contact networking generally offers more control over the process and a personal touch, and removes the need to pay commission fees, it is unlike FGL offers no guarantees and less security. There’s also a bigger chance for game developers to get ripped off if they don’t know what they’re doing.
Another Way To Monetize
Other than advertising and sponsorship, casual games can be monetized through other creative ways. In-game purchases that enhance gaming experience and unlock special content are called microtransactions – and the variety of those is quite large.
During the game experience, often between levels, users can be encouraged to convert real-world money into virtual game currency. The design philosophy here is to keep the game fun to play for non paying users, while giving something “extra” to those who do pay. Since the game offers the complete experience for free, you can attract a wide audience of players. Hard-core players can pay real-world currency while playing the game to make purchases that enhance the game, such as unlocking weapons, displaying alternate locations, improving skills, acquiring character accessories, and modifying other aspects of the game itself.
The Takeaway on Casual Games Monetization
Casual games are a big business, and no matter what platform game developers decide to go for, there is always a way to make money. Developing financially successful games is fun and rewarding, but it is also challenging. We recommend to combine several methods of monetizing games, but prior to that it is important to know the value of the game and research potential sponsors.
Most importantly, game developers should remember to be passionate about the game, make it the best it can be, and present and sell it in the way it deserves and build positive relationships with the sponsors they deal with.