How Gaming Firms Plan To Make Money

Indian game studios managing to make money out of casual games just show how the Indian gamer is ready to spend money on games.

To monetise casual games, Indian gaming studios and publishers are crafting high-stake strategies, putting player stickiness at the core, as they chase scale at home and the global market.

At the heart of the monetisation game, companies are betting on two pillars: In-app purchases and revenue from advertising.

While in-app purchases hinge on strong user retention and take time to build momentum, advertising may offer quicker returns but often at the cost of disrupting gameplay, which may hurt immersion of gameplays.

From a casual gamer's perspective, experts say that sachet-style pricing could resonate well in the Indian market.

"If you ask users for ₹200 or ₹250 upfront, they'll not give it to you. But, if you offer an in-app purchase at ₹21 over the next few days, they will give you the money for the simple reason being that the player might not have that much disposable income continuously," said Roby John, co-founder and CEO, SuperGaming, a Pune-based gaming studio.

The volume of high transactions tied to small-ticket purchases is one of the strategies companies may employ to drive monetisation effectively.

"In India, one would have a sub-1 per cent conversion, but people will give you $3 to $5 on average. What we see is that ₹99 is acceptable from a player perspective," he added.

Anurag Choudhary, founder and CEO, Felicity Games, Bengaluru-based global publisher of hybrid casual games, added in-app purchases usually included boosters, users turning off ads, subscriptions in the form of recurring payments, among others.

"We have 85 per cent ad revenue and 15 per cent in-app purchases. It used to be just 5 per cent for in-app earlier, but there is a conscious effort to move towards in-app purchases now," he added.

However, he added scaling in-app purchases was a function of time and retention of the user base.

"For in-app purchases, you can't make back your money quickly and there is a very long window of payback. It happens over time, and once you break even then it is pure profit for companies," he said.

The other strategy some players are trying is to acquire studios that already have a pricing element packed in their games.

"We identify studios that can build, and have focused on level-based puzzles until now. We work with studios in a way where they have a cash incentive to prototype the game with us and later build it out further," he said.

The two-year-old company collaborates with casual studios by investing in, acquiring, and eventually operating their titles while systematically testing them across global markets to evaluate their commercial potential.

"We want to further invest in a game on metrics such as whether it is fun to play. Second, commercial potential via metrics like average revenue per daily active user, the return on ad spend. If those profiles are good, then we do upfront cash acquisition," he explained.

According to Choudhury, his company has tested 30-odd games while acquiring five titles, out of which two continue to scale via which the company is doing a revenue of about $2 million in ARR (annual recurring revenue).

Felicity's games that are scaling include Solitaire and a hidden object game called Seek and Find. The company has acquired customers globally with a daily active user base of 30,000 customers.

Indian game studios managing to make money out of casual games just show how the Indian gamer is ready to spend money on games.

A far cry when compared to a few years ago, when advertisements were the only way to monetise.

Feature Presentation: Rajesh Alva/Rediff