Masterclass #2: How to Increase your ARPU

Developing a hyper-casual game involves not only creating a great concept but ensuring that your game is profitable during and after the initial launch. For the most part, the publisher will design & optimise the monetization strategy, but there are aspects that developers can shape to ensure that their game can achieve maximum profitability.

In the second installment of our Masterclass series, we’ll explore the different aspects of game design that developers can utilise to help increase their average revenue per user (ARPU). Furthermore, we’ll explore ad set rules and how publishers can work with you to improve your game’s profitability in the long run.

ARPU is a reflection of your monetization strategy

The average revenue per user or ARPU is the average amount of monthly revenue that you earn from each user in your game. It’s calculated by dividing total revenue by the number of customers you have in a given period of time. Another common metric that publishers will look at is the average revenue per daily active user or ARPDAU, that follows the same equation yet for a daily time period and using the daily number of users. 

Both of these metrics are important and used on a broad level to understand how your monetization strategy is performing within the game. This monetization strategy is largely formed around revenues that you receive from each user from ads, In-App purchases (IAP) and/or subscriptions.

Generating revenue with good game design

The best way to create strong revenue for your game is by ensuring that the overall foundation of your game design is monetization friendly. For developers, this means visualising how their game will be monetized and designing their game to utilise those different revenue sources.

To optimise the game design for ad revenue, it’s important for game developers to consider the types of ads that will exist in their game and plan accordingly. For example, if you plan to use rewarded videos, you should identify key opportunities in your level gameplay (double points, a retry of a level etc) where you can present a rewarded video and design accordingly. Furthermore, it’s crucial to ensure that your game mechanic (swiping, tapping etc) doesn’t interfere with ads. Make sure users won’t accidentally touch or swipe an ad while playing the game.

Developers should think long-term about what the most effect ad placements will be

While In-app purchases (IAP) do not make up a huge portion of game revenue in hypercasual, it’s still important to consider what types of in-game features you’d like to monetize so that you have a well-polished game economy. Depending on the scenario, adding a metagame to your concept could pose additional opportunity to create IAP or new ad placements. This extends to games looking to feature a subscription model, in which case you will need to consider which features will be given to users on a regular basis should they opt to subscribe with a monthly fee. 

Different types of revenue sources ultimately contribute to your overall ARPU and while every concept is different, it’s essential to create a well-designed game ready for monetization. 

Finding the optimal ad rule sets

Once you have a strong game design that is responsive and monetization friendly, it’s time to look at the ad rule sets that form your game’s monetization strategy. These ad rule sets will determine the ad frequency, length of ads and ad placements that will appear in your game.

Theoretically, the more ads you show in a game session to a user, the higher the ARPU will be. However, too many ads are likely to deter users and ultimately lower overall retention. Like anything, it’s key to find the right balance for your game.

If launching your game with a publisher, ad set rules are generally defined and optimised by a monetization team. That’s not to say that you will be in the dark, as monetization teams will often work hand in hand with the developer and the games team to discuss how to optimise revenues.

Both pre and post-launch market testing will help in measuring the overall impact of your ad rule sets. Both the monetization and games team will refer to the test results to ensure that there is a balance between user engagement and ads and user drop off, so as not to negatively impact the overall game experience for users.

While the overall monetization strategy is led by the monetization teams of publishers, it’s up to developers to create a strong game foundation that will help to support and boost monetisation efforts. By creating thoughtful in-game economies, determining the most effective ad placements and identifying in-app purchase opportunities through functions or metagames, they can move forward confidently knowing they are setting their game up for success. 

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