As far as we have discussed, we have a fair idea of game revenue generation. A game developer cannot keep on developing games without generating revenue or having strong financial support. Let's discuss game planning now, to keep a developer developing games.
Most new game developers do not know that revenue and profit are two different things.
Revenue is the gross amount of money that a game generates directly from users. Making a game may cost money to developers, and each third-party medium may charge a certain percentage of revenue or some amount for the services. After all the required payments and cuts, the remaining amount is called profit. So, high revenue does not mean high profit.
However, without generating revenue, there cannot be any profit. So, the developer must plan revenue in order to generate profit.
Now, we know that generating revenue is necessary. To generate revenue, the developer must know about the possible revenue sources. We will discuss the main sources here:
- Advertisement revenue
- In-app purchase revenue
- Other sources
Especially for free and freemium games, advertisements are one of the main sources of revenue. There are a lot of advertisement agencies that serve advertisements through ad servers. There may be separate values for separate advertisement campaigns.
There is another platform called ad mediation. This platform provides advertisements from different agencies. Sometimes, this platform helps find the highest rate among available advertisements. This special feature is called real-time bidding.
This is a way of generating revenue for mainly freemium game models. The developer provides the game for free, but certain content and features are kept locked inside the game. Once the user is used to the game and feels like spending extra bucks to get a strong hold of the game, they use in-app purchases.
Planning revenue through in-app purchases entirely depends on the game design and market behavior. Some game models demand content, some demand features, and a few demand both.
In-app purchases can be made with several billing and purchasing services, which we have discussed. However, choosing a particular service may have an effect on revenue generation. So, the developer should always study market trends before tying the knot with a billing service provider.
Other than advertisements and in-app purchases, there are other sources of revenue too. Offerwall and coupon systems are two other options. The developer might opt for branding and sponsorship for a game. This will certainly help make more money. However, these are not exactly means of revenue sources from a general point of view.
As the industry modernizes, new sources of revenue may come up to help developers grow and make better games.
There are several types of users. Mostly, the game industry market varies with region, age group, and gender. If the developer plans to increase revenue, then they must consider these factors in a revenue plan.
However, it is not always possible to use all of these factors at one time or in a single plan. Mostly, developers in the current industry vary revenue plans on the basis of region. It has been established in the market that user behavior varies a lot based on region.
For example, Asian user action and behavior may vary from African or American users, so does the spending capacity. So, the developer should plan game revenue according to the spending capability and spending behavior of users. In some regions, users do not pay real cash. In those cases, the developer must have a different approach to generate revenue.
As we have already said, the user base varies with region. For example, racing is one of the most played genres on average throughout the world. However, generating revenue is not the same. In many regions, people value time more than money, and in other regions, it may be the opposite. So, if the purchasing element inside a racing game helps users save some time for game progression, it might not work in all regions. Some people like to spend more time to achieve that progression instead of paying. The developer has to have a plan to convert that play time into revenue by some means.
Typical user behavior data around the world indicates a lot of variation. One of the major variations is game genre. For example, cricket is an extremely famous and hot genre in a few countries or regions that are used to the game and connected to the game professionally, mentally, or sentimentally. In the American region, this game is not much appreciated. For the same behavior, baseball is not so popular among Asian people. The developer should always analyze the user behavior data of the maximum possible users to plan for the maximum revenue generated from a game.