Free-to-Play Monetization: A Lesson on Virtual Currency

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Kevin Ford

January 10th, 2013

The nativeX Games Task Force works with app developers to help them build smarter apps. More specifically they consult mobile app developers to help them increase free-to-play monetization, engagement, and retention. Their time is limited so unfortunately, sometimes they have to reject candidates. One way you can significantly increase your odds of getting accepted as a Games Task Force partner is by implementing a virtual currency into your free-to-play game. Not only is this a key criteria they look for, this will also significantly increase your monetization.

Here’s how to do it the right way.

Reward Players

It’s typically best to offer two types of currency, including one premium and one standard.  In select situations it also makes sense to include a third currency but we won’t touch on that today.

Standard currency should be given out periodically as a reward to stimulate the game’s economy after users complete challenging tasks.  Premium currency, on the other hand should only be handed out in special situations to create an emotional attachment for the user.  The difference between premium and standard currency must be very clear for this effect to work.

Freemium-Game-Items

Simplifying the Sale

If a player attempts to make a purchase but lacks the currency needed, always ask them if they would like to purchase more virtual currency.  This has been proven to greatly increase monetization.  Pricing the virtual currency in your virtual economy can be a challenging task.  nativeX’s Games Task Force recommends limiting currency bundles to five options.  Providing too many choices will overwhelm the user and increase the likelihood that they will buy the cheapest package.  Below, you can see Imangi provides four price points for currency bundles in Temple Run.  They also apply a bulk discount for larger purchases.  Typically, pricing goods between $2.99 and $49.99 is best for indies.  If you have a large virtual store huge price points like $99.99 can greatly increase revenues, but remember if they return the purchase Apple won’t give back the $30 that they took.  It’s best to A/B test these prices and make sure you’re getting the most revenue out of the pricing structure.

Temple-Run-Currency

Microtransactions vs Macrotransactions

nativeX conducted a study, reported by 148 Apps that shows “microtransactions are not that important to free-to-play games.  It’s actually the expensive transactions, starting at $9.99, that represent the majority of a game’s generated revenue.” In fact, 47% of the revenue earned from in-app purchases falls in the range of $9.99 to $19.99.

Freemium-Transactions

Navigation

Once users obtain virtual currency, navigation between their current location and the store should be clear so they can easily make purchases.  Best practices suggest limiting navigation to one click.  In the game shown below, users are able to access the in-app store from the main menu through the “Buy Currency” button.  Additionally, users are able to toggle between the main menu and the storefront without confusion or extra clicks.

A F2P in-app store
The storefront has a back button for returning to the main menu.

In-App-Store

Give your Virtual Economy a Boost

When your virtual economy is functional, you’ll want to check out Ben Sipe’s “5 Tips for Boosting Virtual Economies“ so you can start optimizing your virtual economy.  Then you’ll be ready to start thinking about additional monetization methods for the 90% of users that won’t purchase virtual currency.  That’s where nativeX assists game developers with app monetization solutions including our Discovery Wall, interstitials, app alerts, and other native ad units.

Kevin Ford

Marketing Manager

2013-01-10

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