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The Smart Ways Game Companies Make Money from IAPs

The Smart Ways Game Companies Make Money from IAPs

In-app purchases, also called IAPs or microtransactions, are a huge earner for game developers. In 2019, a report about video game revenue revealed that free to play games which offer this type of microtransaction made $88 billion in 2018.

Games like Fortnite and Grand Theft Auto V are some of the biggest when it comes to IAPs, though these purchases are made in all kinds of games on PC, consoles and mobile phones.

It is now normal to spend tens or hundreds of dollars on IAPs in a month but gamers are making developers try a bit harder to get their money. Making money from IAPs now takes much more than just creating a good looking character skin, and some gaming companies have come up with some smart ways to grow their revenue within this context. 

Using Their Own Launcher

Picture2 2 - The Smart Ways Game Companies Make Money from IAPs

Google Play logo” Google (Public domain)

Epic Games, which makes and runs Fortnite, surprised everyone when it announced that the Android version of the game would not be available through Google Play. The company chose to leave its game off the store, meaning that anyone who wants to play Fortnite on an Android phone has to download the Epic Games Launcher first. 

Getting the Epic Games Launcher does take a few more minutes than just downloading a game from Google Play but, for Epic, making players wait to play just makes the company more money. By doing this, much more money come in from every IAP made in Fortnite on Android in comparison to games on Google Play, which have to give Google 30% of every IAP made according to the platform's Terms of Service for developers and publishers.

Casino Bonuses and Try Before You Buy Deals

Real money mobile casino games aren't free to play. This could be a hurdle that some mobile gamers are unwilling to jump over but companies such as, an online casino for real money games like live blackjack and online slots, have come up with new ways to get players spending on those IAPs

Casino companies do this by offering bonuses such as free spins, which are normally given to new customers. There are also 100% match bonuses where players can deposit up to £100 for another free £100 to play with. These deals allow players to try before they buy, so to speak, and after enjoying a slot for free, they will be more likely to spend on an IAP to play it more. 

Season Passes

According to research, a gamer who spends on an IAP once is more likely to make a microtransaction in that game again. It's just like having a favourite store that you visit often to see what new products they have in. To keep these players spending and having fun, game developers have begun to create season passes of new items that are added every month or every few weeks.

Season passes typically offer new characters, like in Samurai Shodown, new weapons, and new clothing items. They don't always affect gameplay, but the excitement around the new DLC does get gamers spending.

Game developers keep testing new ways to get people spending on IAPs. They have become so important to game revenue that not thinking of smart ways to get gamers to spend can mean a game is just not successful – at least in terms of revenue.