Hyper-Casual Mobile Game Monetizations
Despite an exhaustive attempt, we were unable to locate any data on the number of apps that use each monetization type. We hypothesize that this is due to two factors, the reasoning for which will be made more clear in another brief in this project.
First, the number of hyper-casual games is constantly in flux as new games are produced on a daily basis, which makes keeping count of the games, let alone counting their monetization schemes (which would likely require downloading every single game to see how it is monetized), virtually impossible. Second, every source on this matter concurs that hyper-casual games are overwhelmingly monetized with in-app ads.
Therefore, we will present the data as it is, which primarily looks at revenue rather than downloads.
Paid and Subscription
- Of the dozens of articles on the subject read in the course of our research (of which those in our source list below are merely a representative sample), it is telling that none refer to paid or subscription-based hyper-casual games.
- We infer that this is because there are no examples of successfully marketed games with this monetization model; hyper-casual gamers aren't willing to pay for a game when there are so many calling for their attention which are free for download.
- Fully 70-90% of all hyper-casual game revenue comes from in-app ads (IAA), which — as noted in our intro above — are nearly universal in hyper-casual games. This revenue can be broken down by ad type:
- As noted by Game Analytics, "Unlike mid and hard-core game titles that rely on in-app purchases and user loyalty to monetize their players, hyper-casual games gain returns through in-app advertisements and high volumes of downloads."
- The need for downloads is why 60% of in-app ads are for other hyper-casual games. Since hyper-casual gamers almost universally have multiple game apps at any given time that they switch between depending on their mood, there is little risk in redirecting them to other games.
- In-app ads are not only the most common method for monetizing hyper-casual games, they actually led to the proliferation of the genre.
- Because hyper-casual games tend to have very short-term LTV (lifetime total value), low customer retention rates, and quick ROAS (return on advertising spend), developers and advertisers have had to develop advanced tools, as detailed in another brief in this project.
Rewarded Videos and Ads
- Rewarded videos and ads comprise about 30% of all hyper-casual ad revenue (see above).
- Incorporating video ads into a hyper-casual and offering rewards for viewing them can improve click-through rates by 18x and increase revenue by 30-40%.
- Hyper-casual gamers see an average of 4.8 video ads per day, twice that of any other category.
- The amount of hyper-casual gaming revenue share from in-app purchases (IAP) has declined rapidly over the last year and a half, from 69% in June 2018 to 44% in December 2018, to between 10-30% today.
- Game Analytics notes that IAP serves a secondary function in monetizing hyper-casual games, adding to revenue derived from in-app ads rather than replacing it.