Subscription as a revenue model is a relatively new concept to the consumer world, but definitely not unheard of. Amazon Prime, Netflix, Spotify, Tinder, Deliveroo and even Duolingo, there are many different services out there that adopted this in the last decade, and it’s just growing.
But how about in gaming? More specifically, mobile gaming? How can you really implement a subscription service and increase your revenue, without disrupting your existing revenue streams?
We answer just that.
The New Era of Monetization
When the first iPhone launched in 2007, ‘premium’ was the dominant business model for mobile games. And by 2009, everyone was publishing $1 games such as ‘Angry Birds’, ‘Doodle Jump’, and ‘Cut the Rope’…
With any new piece of technology, things started to develop fairly fast, and soon Free-to-Play was introduced. By 2011, more than half of all revenue on mobile came from this new business model. It wasn’t until the release of ‘Candy Crush Saga’ and ‘Clash of Clans’ that the industry truly saw the potential of F2P games. Since then, this model has grown to account for over 80% of all digital revenue across platforms.
Apple Arcade have changed the ‘monetization’ game
Now, we’re experiencing a similar shift in-game monetization. Google and Apple have both recently launched their subscription services for games, and more platforms are joining them (Game Club and Hatch, for example). However, these services all focus on the traditional ‘premium’ games that only make up a small part of the market. They both follow an “all-you-can-eat” model: one payment a month (roughly $5), no ads, no IAPs, and as many games as you want.
By launching these services, Google and Apple have both saved and killed-off the premium business model (a one of payment of usually $1 – $5) for mobile games. From now on, publishing premium games is only viable by joining one of the “walled-gardens”, curated subscription services such as Apple Arcade. In other words, the stand-alone, buy-once premium game is in its final death-throes.
Single-game subscription vs cross-game subscription service
By making a subscription model with more than one hundred games at only $5 a month, Google and Apple have taken one of the most important selling points away from Free-to-Play: FREE.
Once you have signed up for the subscription, all the games ‘feel’ free since the subscription fee is already a sunk cost. Some Free-to-Play publishers have seen this development and have started implementing their own subscription models. But most of them only cover a single game.
So, the question is; how will their single-game subscription offering look to consumers, who are used to cross-game subscriptions such as Apple Arcade and Google Play Pass with hundreds of games included? Well, this depends. If we look at the tv-series ‘The Mandalorian’, this show might be the only reason why people subscribe to Disney+. But most people would never subscribe only to The Mandalorian. Just one TV show is not considered valuable enough to warrant a subscription. Keep in mind, some games are big enough to sustain their own subscription model (such as Honour of Kings/Tencent or Fortnite/Epic), but the vast majority of games are not.
The takeaway here: unless you have a brilliant ‘AAA-like’ mobile game, your players won’t be convinced by a single-game subscription model. But there are other options.
The three pillars of Mobile Game Monetization
Despite all of these changes, F2P games aren’t going anywhere anytime soon. Players will still want an easy free game that they can play on the go.
So, to be successful in this market, you need to rest your game’s monetization on three pillars; ads, IAP, and subscription. This gives your players the widest possible choice and the maximum flexibility for your game. That said, each type of monetization should be used at the correct stage of player lifecycle.
You can’t just expect your players to subscribe immediately
There is plenty of great knowledge out there about ads and IAP, so let’s shine a light on subscription models. First thing you should know, it’s very unlikely that people will join your subscription before they have gotten into the game. So, present the offer when they are engaged and enjoying the game. Onboard players onto the lowest tier (if you have a tiered subscription) – you can always upsell later as they experience the benefits of the subscription.
By integrating a subscription (that is not all-you-can-eat, but we’ll get onto that later), you have essentially created a new baseline of spending. Once people have signed up for the subscription, they’re likely to keep spending in that game since the subscription fee is considered sunk costs – assuming your game is of good enough quality (but of course it is!).
Adding Subscription to the Mix
Being successful with subscription requires as much thought and expertise as ads and IAP, so you need to do your research. If you don’t, you may end up having to sustain benefits that you regret adding, i.e. if you include benefits in the subscription that you want to remove later (let’s say you promise ‘No ads’ but find out you want to allow subscribers to watch rewarded video – this would be a breach of the subscription).
Similarly, giving a fixed amount of soft currency also limits your options if you want to reconfigure the in-game economy. So if you do want to add a subscription model to your game, you’ll need research, plan, and test.
Don’t forget the benefit
The most important thing to consider when introducing a subscription is that you are starting a relationship with the player. You are no longer in a quid pro quo situation.
What’s in it for them to subscribe to your game? No ads? Monthly items? More levels? Unlockable characters? The player is investing their money into your subscription, with the expectation that it will be worth it at a later point. You can’t let them down on this promise, or they won’t come back.
The best driver for converting your players is ‘Persistent Benefits’, such as Access, Multipliers on rewards (typically seen in battle passes), and Vanity features that make people stand out (typically seen in multiplayer games). Here’s what these are:
- Access (meaning getting access to features or levels inside your game) is typically a quite straightforward benefit to integrate, and is often carried over from non-consumable IAPs such as unlocking levels or access to multiplayer functionality.
- Multipliers (which could be increased XP and soft currency rewards, better ‘drops’ etc), as seen in battle passes. are a perfect fit for subscription. They really complement how people play games and offer players a way to invest more to get more.
- Vanity features (such as unique skins, or a gold-plated name tag), usually is only really relevant when other players can see it. No point in having the coolest celebration dance if only you can drool in envy!
Consumables (such as soft currency) are typically not strong drivers for converting to subscription, but they can be useful tools for increasing engagement. Consider giving them out as a daily allowance, which increases if you log in every day to get them.
Influencing and Enhancing Each Other
The second most important consideration is that each of the monetization methods should influence the others – and engaging with one should improve the other. An obvious example of this is that subscribers should get a discount on IAP. This reduction both impacts the incentive for signing up while at the same time rewards the players for having entered into this relationship with the game. Studies show that people who subscribe to Amazon prime on average spend more on the store than before signing up.
Another good example is the idea of “frequent flyer points” influencing the subscription. Just like airplane reward programs, these could be engagement-based (how much time you spent in the game), or spending-based (how much money you spend on IAP). In any case, these could unlock higher tiers and special rewards. This creates a nice loop where the subscriber gets discounts on IAP leading to more IAP spending, which then unlocks higher subscription tiers that leads to better rewards which again leads to a bigger incentive to spend on IAP.
Again, this really does depend on what type of game you have. If you have a handful of hyper-casual games that you want to create a subscription model for, then the expectation here is that they remove blocking ads and annoying banners. Don’t get greedy.
What about Battle Passes?
Battle passes have become a really popular way to monetize F2P games. And for good reasons! It’s essentially a time-limited subscription, but brilliant in that it drives both spend and engagement, as players must play to earn the potential rewards they paid to get access to.
Similarly, a subscription service should seek to increase retention by providing benefits that drive engagement; giving players bonus benefits that they have to engage to earn the most of. Battle Passes also packages the offering within a clear frame of both time, scope, and content, making it clear what the player gets (or misses out on if they don’t subscribe to the Battle Pass).
So, what can you take away from this article?
I’ve covered a lot here, so well done for making it this far. But to be honest, we’ve still only touched the surface when it comes to subscription models. And if you take away anything from this post, then let it be one of these:
- A F2P game needs 3 pillars to stand on; ads, IAP and subscription
- Subscription is all about relationship with the player
- The drivers for conversion are different for IAP and subscription
- Each method should influence and enhance each other
- Consider Battle Passes as a kind of subscription model
Need help with your subscription model?
Unleashd is a brand-new subscription service for F2P mobile games, developed by Multiscription. Set to launch later in 2020, the service works across multiple games from different publishers, providing the opportunity to join a large subscription service without cannibalizing their existing revenue streams.
Free-to-play publishers can add existing or new games to the Unleashd subscription catalog, with every game offering unique in-game benefits, plus an experience free of disruptive advertising, as part of a single subscription fee. Developers have complete freedom to choose which benefits to offer users in their games, and we’ll give expertise and guidance in this process. For players, Unleashd provides a far better deal than multiple individual game subscriptions, and makes it convenient for them to try out – and get benefits in – new games that are part of the service.
We’re still in development, but we’re aiming to roll out later this year. If you’re interested in learning more about our service and think your game could be a good fit, sign up to our mailing list on our website unleashd.com or email us directly at firstname.lastname@example.org and we’ll let you know about any update.