Breaking out of the app store: New monetization opportunities for mobile game developers

Studies show that more than 260 million mobile game players are out of reach of the app stores. But with Apple and Epic’s lawsuit impacting the mobile game industry and monetization in a big way, new opportunities to monetize outside the app store are opening up.

To talk about how mobile developers can capitalize on these new avenues, GamesBeat Summit gave the floor to Anthony Mendoza, Director of Business Development, Global, and Hannah Zhang, Business Development Manager, USA, both at Xsolla.

Mendoza opened up by talking about three major components to this new freedom from the app store. First is that now players can use online payment methods to purchase in-game items and currency, and top up their accounts. The second key opportunity is that developers can now market directly to players, in order to drive traffic to a branded web shop for purchases. The third major component is that a branded web shop, which represents a new way for developers to own the entire user experience. And it looks like it may end up being a global trend.

“Apple may eventually lift the restrictions and allow developers to offer alternative payment options for their users in more territories,” Zhang said. “Developers are more aware of their options around contacting their users to encourage them to pay directly and avoid Apple and Google’s platform fees.”

Reaching 260 million new players

The lift in restrictions also means developers now have a way to reach new, untapped markets — those 260 million players who can’t use the app stores because they have no way to pay for their purchases (because credit cards are not the standard form of payment in their countries). When game developers can offer alternative, local methods of payment, through companies like Xsolla, they can increase conversion and drive new revenue, and create a worldwide community.

Xsolla offers a wide range of local and alternative payment methods around the world —  99-plus in the United States (a 10% increase in available payment methods), 300-plus in Europe (+40%), and 200-plus in China and Asia (an increase of 60% in South Korea, about 90% in China).

In Asia, including China and South Korea, Apple mostly offers credit card payment methods for users, but in China, 54% of payment transactions actually happen through methods like Alipay and WeChat Pay. In South Korea, many users rely on local credit card payments like KakaoPay, Toss, and Payco.

In Central and Latin America, Mexico has about 50 million players, and Brazil has about 75 million — and 50% of those players use local credit card brands. Boleto Flash accounts make up about 15% of the market, while an up-and-coming instant payment method called PIX is gaining traction. In the U.S., much of the  untapped market comes from things like game store gift cards.

Owning your own community

“One of the biggest draws to all of this is being able to own your own community,” Mendoza said, which is huge for marketing purposes.

For example, a game developer or publisher can collect email addresses through confirmed purchases or initiated purchases in the web shop, then target campaigns and ads to those email addresses to maximize profit.

“You own the data. You own your ecosystem. You can have direct marketing and direct engagement to these players that you would not otherwise be able to do on the Apple and Google platforms,” he added. “There’s the big draw with marketing campaigns, being able to communicate with your users and your gamers on a more intimate level.”

Beyond the marketing campaigns, the web shop also offers other benefits and value propositions, Zhang added. For instance, Xsolla’s web shop is a white label digital store for developers and publishers to sell subscriptions, in-game items, and currency directly to their users from their own customizable branded website. The storefront becomes a part of the community because it offers a way to distribute games as well as update features, news, and leaderboards.

Independent webstores also get around Apple’s $99.99 restriction on the price of user packages. Xsolla partner Playstudios offers a VIP page to engage whales with exclusive mobile item content. Similarly, Scopely has created a web store outside of their mobile games to sell special bundles and packages to their high-LTV cohort and whales.

“You make your users and your community feel special by having this alternate ecosystem to allow them to talk to one another and purchase things,” Mendoza said. “That’s where you create trust in your community and your gamers. That’s where you’ll create loyalty, and loyalty in the mobile game industry does mean money.”

Catch up with whole session on demand right here.