Is it just a closed loop of game companies paying eachother or are they getting money from somewhere else?
In: Economics
Don’t forget that _you’re_ seeing game ads because you’re being targeted. Not everyone sees all game ads
Mobile game maker here, I’ll try to explain to some extend (sorry for my english).
First thing after you create your free mobile game is to find people downloading your game. Most common thing to do is to “buy” players, you pay money for the ads to appear on any other game or platform, and it will cost you money for each download you get, we will call this Cost per Install (CPI)
But each time an Ad appear in our game, we also got money from the Ad Network (Admob, Ironsource,…). The money, of course are from anyone who paid to get users. So basically it’s a loop with Ad Network tries to improve their AI to be more effective (reach the right people), and game makers try to encourage player to watch more Ad (or IAP) so our revenue from each user higher than CPI
We game makers also use players data but not for sale, just to track and improve our game based on the data we have so our game will have better retention rate
Just an fyi if anyone sees this. Disabling wifi and data before opening a game should disable adds especially if its one of those simple addictive games that have adds every level
Some of these ads are so dumb….showing gameplay that has nothing to do with the advertised game. They should have rules and regulations for the dumb shit they’re allowed to show….I’m talking about you Homescapes
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South Park season 18 episode 6 is about Freemium gaming.
[Click here for the episode](https://southpark.cc.com/full-episodes/s18e06-freemium-isnt-free#source=6154fc40-b7a3-4387-94cc-fc42fc47376e:c6cbd5e3-7eae-4cc3-94b7-119c8d412f99&position=6&sort=!airdate)
Wow hey a topic I’m an expert at!
Well, the basic idea is that when you show an ad for your game in another game, you’re paying in CPM, or ‘Cost Per Mile’ which means 1000 views.
One ad can get millions of views per day or even hour if the budget is high enough.
The goal then, is to get the users to come to your game and filter through your business model–whether that be in game purchases, in game ads, subscriptions, rewarded ads, or offer walls.
If you run an action game called Ninja Attack and I have an RPG game called Ninja Hero Gaiden, chances are players of your game might want to play my game too. So I would contact an advertising company like Google, Facebook, Unity, or Ironsource to get advertising.
The key is the Business Model. Do I make my money from advertising or from in game purchases?
If it’s from advertising, the goal is simple, make you play long enough to see more ads than I paid for.
More likely thought, it’s to get you to come and play the game and spend money.
One user out of 100 coming and spending $1 will net me 10x what I spend. Worth it.
I worked in the mobile free to play industry. The current answers I see don’t reflect what I experienced.
Ads are nearly worthless. Usually 1 to 2 cents per view. So if we have a user base of 5000 active users a day and they each watch 5 ads it’s $250. Which is not terrible but that number is basically the maximum many dev studios would see.
And more importantly ads give resources without training purchasing behavior which is discouraged. You will often see limits on the number of ads you can volunteer to watch for instance. This is because it’s not valuable to allow you to farm currency that way. It’s a supplemental income, not the main focus.
Whaling would be a great term for how free to play games actually make their money.
99% of a studios income will be from a very small percentage of the userbase. These people are the whales, they spend literally thousands to tens of thousands of dollars on free to play games. They do this because free to play games focus on including every single mechanic they can to encourage addictive behavior. With many strategies pulled right out of casino textbooks.
It’s very important to gate time. You can’t have people burning through content. So time sinks need to be made. All resources are monitored to make sure that their are good gold/gem sinks. So that players are properly on the verge of just having enough to push them to buy more.
Also it is very important to encourage purchasing as early as possible to normalize the behavior. You’ll be given premium currency as part of the FTUE (first time user experience) and this will maximize the likely hood that you will be tempted to purchase more premium currency.
Lots of people will spend a few dollars here or there. But all of the players that spend a reasonable amount combined likely do not add up to what the biggest whale is spending.
So when trying to understand these markets, remember they are whaling industries trying to land the big one. This is why so much of what they do seems so unappealing. They don’t care about you shrimp, because the whales ‘love’ it. (Or at least they will drop their money endlessly and that’s the important bit.)
What I wanna know is, with how flooded the mobile market is, how does a solo dev make any money and how much money can they even make in a little game?
Oh I have some background here. Finally an area I can share some expertise on.
Generally speaking, every digital company is connected at this point in the advertising world.
When you go to your local grocery store and buy some coke and use your “shoppers club” card, that is then sold to one of the thousands of companies interconnected to what is known as DMPs. These DMPs then hold a lot of this data to be resold in some sort of targeting tool.
The idea of “click through” for paid ads is old, and largely not used due to inaccuracy. They use impression methods for payouts on ads. Looking at one of these partnering networks to see if the ad was effective, then getting paid out on said ads. Effective as in you purchased the good they sold. Using one of the thousands of available IDs they use to tie you, to the marketing campaign.
The digital advertising world is a vast network of companies buying and selling data in the same method. One example of these networks is the
https://digitaladvertisingalliance.org/participating
So as indicated earlier on ads, thats how some of the revenue is being generated.
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