Should You Go DTC Now Or Wait For App Store Regulations?
Editor’s note: this article was originally published on Mobidictum’s website.
Mobile game publishers are at a crossroads. With increasing regulatory scrutiny on app stores and changing policies, game studios face a choice: wait for more policy shifts or embrace a flexible direct-to-consumer (DTC) strategy now. The answer from industry leaders is clear—act today.
App Store Changes: Uncertainty Ahead
Recent regulatory actions have already made waves. The EU’s Digital Markets Act, for instance, pressured Apple to allow external payment links in the region, offering new revenue opportunities for developers.
Yet, the future remains uncertain. Ongoing battles, like the high-profile Epic vs. Apple and Google case, keep the landscape shifting. In-game promotion of external web stores remains problematic; many publishers operate in ‘grey’ areas, finding workarounds while being careful not to irk the gatekeepers in fear of penalties.
But relying on regulators to deliver a perfect solution is risky at best to games businesses.
While some developers wait for clarity, leading studios are moving forward, investing in adaptable DTC strategies and adding web store revenue to their income streams.
The Rise of DTC: Publishers Leading the Way
According to Appcharge’s latest report, 72% of top-grossing mobile games already operate a web store, and they’re seeing tangible results. Consider the social casino category, where every top game now has a web store.
Publishers like Playtika have demonstrated that even modest shifts to DTC channels can create big gains. In 2023, Playtika’s DTC revenue climbed to 24.9% of its total revenue, driven by the success of its Slotomania and Bingo Blitz stores. The result? Lower fees, higher margins, and more flexibility.
DTC strategies are not just about bypassing app store commissions. They offer publishers control and flexibility to engage players directly. From tailored offers to loyalty programs, publishers can build richer player experiences and, in turn, increase long-term player value.
Building Revenue Resilience
Adopting a DTC strategy isn’t just a defensive move; it’s an opportunity to build a more resilient business.
Appcharge, a leading web store provider that processes $100 million per year and powers over one-third of top-grossing mobile game web stores, found that a well-executed DTC strategy boosts revenue by 25-35% on average.
This revenue does not cannibalize revenue from in-game sales – it adds to the overall pie. For example, while overall revenue was slightly down in Playtika’s latest earnings report, their DTC earnings were actually up. The same is true for Huuge, who’ve doubled DTC revenues year-over-year and signaled more investment ahead.
Playtika’s DTC platform revenue of $173.7 million increased 1.3% sequentially and 5.1% year over year.
Challenges Are Surmountable
However, going DTC isn’t without challenges. Compliance complexities, managing new payment systems, and successfully creating a new habit among players are critical. But these hurdles are surmountable with the right tools and partners. For example, finding a good Merchant of Record provider alleviates the whole burden of global compliance and payment operations.
In terms of instilling new player behaviors, high-ARPU genres like strategy and social casino games have thrived by leveraging their existing foundations in VIP management and loyalty programs to drive DTC adoption.
The Time to Act is Now
As app store regulations continue to evolve, the window of opportunity is wide open. Waiting for policy changes could leave studios playing catch-up; those who move now to implement adaptable, multi-channel strategies are setting themselves up to be market leaders.
It’s clear from the data that DTC web stores are no longer the “next big thing” but the norm. By acting today, studios can unlock new revenue, take ownership of their players, and future-proof their businesses against unpredictable shifts in the app economy.
The Rise of Web Stores in Gaming: A Game-Changing Revenue Strategy
Editor’s note: This content was originally published on Game Makers, where our Chief Marketing Officer Gil Tov-Ly was invited to talk with Joseph Kim about the rise of web stores and their impact on publishers’ revenue.
Watch the episode below or continue reading for the highlights.
Mobile web stores enable game developers to manage payments from their players directly rather than using the existing built-in app store payment mechanism.
Managing customer payments directly enables game studios to avoid paying the 30% app store payment fees.
The gaming industry is witnessing a significant shift in how studios monetize their games, with web stores emerging as a powerful alternative to direct app store purchases. Here’s what every game executive and product leader needs to know about this transformative trend.
Some game studios are reporting up to 40% of their revenue now coming from web stores
Studios implementing web stores have seen 20-30% increases in total revenue
Appcharge, a leading web store platform, has reached a $200M annual revenue run rate in just 2 years
💰 Economic Benefits
Higher Margins: Studios keep ~95% of revenue from web store purchases vs. 70% through traditional app stores
Expanded Revenue Opportunities: Players often spend more when given additional purchasing options
VIP Player Focus: Web stores are particularly effective for games with high-value players (whales)
Market Size: The in-app purchase market ($110B currently) is expected to grow to $200B by 2030, with web stores potentially capturing 10-20% of that market
🎮 Best Practices for Success
Game Genre Matters: Games with significant spending differentials between average and VIP players (like casino games) see better web store adoption
Trust Building: Ensure web stores maintain a professional look and feel aligned with the game’s brand
Player Experience: Focus on seamless integration and clear value proposition for players
VIP Strategy: Consider making web stores exclusive to VIP players initially to build momentum
🛠️ Implementation Considerations
Build vs. Partner: Studios can build in-house (requiring significant resources) or partner with specialized providers
Most regions still restrict in-app links to web stores
Studios cannot actively promote web stores within their games
Platform constraints on payment provider choices remain
Geographic regulations vary
🔮 Future Outlook
Alternative app stores (like Epic Games Store on iOS in the EU) are beginning to emerge
Regulatory changes may enable more direct player relationships
The industry is moving toward a multi-channel distribution and monetization model
Web stores are becoming the “new norm” rather than just a trend
💡 Strategic Benefits Beyond Revenue
Direct Player Relationships: Build stronger connections without platform intermediaries
Marketing Control: Ability to run direct promotional campaigns
Data Ownership: Better understanding of player behavior and preferences
Flexibility: More control over pricing and promotional strategies
Player Engagement: Web stores can become an additional meta-game element for engaged players
For game studios considering web store implementation, it’s crucial to understand that success requires more than just technical implementation – it needs a strategic approach to player communication, value proposition, and long-term relationship building. As the industry continues to evolve, web stores are becoming an increasingly important part of a comprehensive monetization strategy.
Boat Trips, Saunas and Expert Panels: Appcharge at PGC Helsinki 2024
Last week, the Appcharge team touched down in Finland for the highly anticipated PGC Helsinki, diving deep into all things direct-to-consumer (DTC) monetization. Our time there was packed with insightful sessions, exciting industry connections, and plenty of thought-provoking discussions on the future of mobile game monetization.
Sharing our expertise on panels and in talks
From Day 1, we hit the ground running. Our VP of Business Development in Europe, Miikka Luotio, captivated the audience with his talk, “Why Players Hate Your Web Store”, shedding light on common pitfalls and how to make web stores more appealing to players.
Meanwhile, our Chief Marketing Officer, Gil Tov Ly took the stage later in the day to tackle the impact of the Digital Markets Act on the mobile games market, joining a panel of industry experts for a lively debate on regulation.
Sponsoring the Pocketgamer.biz Top 50 Mobile Game Makers event
Day 2 was just as eventful, with even more great conversations and new opportunities to connect with leaders in the space.
The highlight of the evening was the Pocketgamer.biz Top 50 Mobile Game Makers event, where we proudly supported as sponsors, celebrating the best in the industry in addition to the exciting road ahead for direct-to-consumer web stores.
Hosting a wonderful boat trip
We wrapped up our time in Helsinki with a memorable boat and sauna trip, bringing together partners and friends for a chance to network against the stunning Finnish backdrop. It was the perfect way to end a fantastic couple of days filled with new learnings, shared ideas, and renewed energy for driving innovation in the DTC space.
Until next time, Helsinki – we’re already looking forward to what’s next!
Revolutionizing Mobile Game Monetization: A Conversation with Maor Sason
Editor’s note: This is a podcast originally published on Soar Payments’ blog. Listen below or continue reading for the transcript.
Maor Sason is the founder and CEO of Appcharge, a revolutionary platform aimed at helping mobile game developers retain more of their revenue by offering direct-to-consumer stores. With a background in in-game advertising, Maor has been at the forefront of mobile gaming innovation since 2016. His work focuses on empowering developers by reducing the dependency on major app stores like Apple and Google, which take a significant percentage of in-game purchase profits. With Appcharge, developers can keep up to 95% of their earnings, allowing for greater control over their revenue and a more flexible gaming experience for users.
Before launching Appcharge, Maor had an extensive career in the mobile gaming space, working closely with major studios and advertisers. He played a significant role in the free-to-play revolution that transformed the gaming industry, where users can enjoy games for free while being offered paid upgrades, bonuses, and extra content. Maor has collaborated with top-tier game development companies like Coin Master and Play, helping them scale their operations and increase profitability through innovative monetization techniques.
Maor’s work has been instrumental in shaping the mobile gaming industry, particularly as new challenges, such as Apple’s iOS 14 privacy updates, change the way games are marketed and monetized. His deep understanding of user acquisition strategies and the economics of gaming has positioned him as a thought leader in the field. With Appcharge, Maor continues to drive the industry forward by offering developers the tools they need to build successful, sustainable gaming experiences in an increasingly competitive market.
Episode Transcript
Kevin Rosenqvist: Hey, welcome to Pay Pod, where we bring you conversations with the trailblazers shaping the future of payments and fintech. My name is Kevin Rosenqvist and thanks for listening. Maor has been in the mobile game space for almost a decade. He started with in-game advertising and now he’s built Appcharge, a platform for mobile game developers to monetize by offering players chances at bonuses, rewards, and in-game purchases. And the best part for gaming studios is that they keep the majority of their revenue, rather than having to kick up to 30% back to Apple and Google. Maor Sason and I talk about mobile gaming. We reminisce about the Game Boy, and I get his take on what gaming in the metaverse might look like. So please welcome Maor Sason. I enjoy some mobile games, particularly card games like Euchre. I like to play euchre. My first question for you is very, very important. Can you make them give me like a million coins? So I’m set for a while.
Maor Sason: Easy. I’m gonna give him a call tomorrow. Okay. Yup. Yay!
Kevin Rosenqvist: Kevin needs some coins.
Maor Sason: Yeah, this is gonna holler at you. Yep.
Kevin Rosenqvist: That’s right. I remember when mobile games first take off and I first took off. And I remember the first time I discovered sort of the model of offering the game for free and then having the option to pay for upgrades, extra lives, coins, etc. at first it was kind of like what? I thought this game was free. But then you think about it and you’re like, wow, that’s a that’s a brilliant like that’s like a brilliant way to to to do a game like offer it for free and then then you can upgrade with within it. You’ve been in this space since 2016. Have you found that players are more likely to spend in-game than they used to.
Maor Sason: Of course, mobile spending goes up like the average spending per paying users in all platforms are going up, especially in mobile. Free to play is actually, I would say, the only way to build a proper game and monetize it in mobile nowadays. There’s no other way to do it and it’s proven itself. It’s kind of like gave birth to some of the biggest titles in the industry. You probably know of them. Also here in Israel we have a great team. Games like, studios like Coin Master, Playtika, Plarium, all the Israeli based. So we’re pretty familiar with that.
Kevin Rosenqvist: What type of games are the ones like the most successful? The biggest ones? Are they Maor Sason of the, you know, card games or are they more of the building worlds kind of games? What’s really the hottest thing right now?
Maor Sason: Oh, there is no one category to rule them all. You know, it’s not a it’s not a Sauron Ring, but starting from a puzzles the all kinds of social casinos RPGs every niche has some MVP’s and they can generate tons of cash and entertainment for their users. So mobile mobile is a star and it’s taking all the categories up with it. , yeah.
Kevin Rosenqvist: It’s funny because like, I think about my Game Boy that I had as a kid, you know, this little tiny.
Maor Sason: What were you playing?
Kevin Rosenqvist: What’s that?
Maor Sason: What were you playing? I was planning to add. Like my Game Boy color the purple one. What was your favorite?
Kevin Rosenqvist: Well, I had the original, like the white game boy. That was just the green.
Maor Sason: Oh yeah. Oh yeah.
Kevin Rosenqvist: No, I’m I’m, I’m old man so I, I’m old. But yeah, I had I mean Tetris was the obvious one that was like super, super big. And then, uh. God, there was another game that I can’t remember. It was like an adventure game. I don’t know if it was a Zelda, but it was something in that realm where you kind of walk around and stuff. But I think about that, and I think about what I’m able to do with my phone now, and it’s just startling how far we’ve come. Yeah.
Maor Sason: People still play these games, by the way. Like, so Pokemon was my first game on the Game Boy Color. It was the red like a Charizard. And by the way, the logics and the interest for Pokemon. Have you ever played? No, it’s based on Zelda, actually. So like the whole game mechanics is just a Nintendo took it from Zelda, brought it to Pokemon, and they did it the same now on the new console. And it’s working really well.
Kevin Rosenqvist: Wow. It’s just the same even on the new console.
Maor Sason: On the switch?
Kevin Rosenqvist: Yeah, on the switch, it’s the same. That’s interesting. That’s really interesting.
Maor Sason: Yeah, yeah. With the open world. Zelda, if you had a chance to play. Yeah. Breath of the wild.
Kevin Rosenqvist: Yeah. That sounds awesome. I have a three and a half year old. So pretty soon he’s gonna start when I hand him a video game controller. Now he just mashes the buttons. But pretty soon he’s going to start beating me at stuff. I know it’s going to happen.
Maor Sason: Yeah. Or it’s gonna, you know, it’s just going to be very polite and it’s going to manipulate you to let them play every day, the whole day. That’s what usually happens.
Kevin Rosenqvist: Don’t tell me that I don’t know.
Maor Sason: Yeah. They’re getting more sophisticated.
Kevin Rosenqvist: It’s incredible even watching him with his tablet, I’m just like. I didn’t even know he could do that, you know? Like, he’s like, wait a minute. Are you buying something? Like.
Maor Sason: Yeah. Yeah, yeah. They they’re they’re like controlling the the consoles, the iPads, the iPhone. It’s like, you know, they’re like yeah.
Kevin Rosenqvist: Yeah, it is like Spock. That’s a good analogy. Yeah. So mobile gaming is a huge market in 2023. The global mobile game market generated $76.7 billion, and it’s expected to grow to over 100 billion by 2028. I also saw that mobile games accounted for over 55% of consumer spending on mobile devices in 2023, which really blew me away. But what a lot of people didn’t realize is that a lot of the revenue is taken by Google and Apple. Like if you more fees for having their stores and stuff. How much do they take? As a general rule.
Maor Sason: First of all, about the numbers. I know that I’m affiliated with a bit different numbers. Nowadays, mobile games in-app purchase spending should be around $110 billion and will account for like, I think it’s going to be 200 billion by the end of the decade. Wow. Okay. Insane numbers. Okay. Yeah. Apple iPhone. Yeah, Exactly. Increased and increased expectations. Apple and Google’s business model is that they’re charging 30% for all digital goods. It means it’s not like a tangible like shoes, food, clothing, anything that you can hold. They’re taking 30% unless it’s a subscription. If it’s a subscription first purchase is like 30%. Then the recurring ones are 15. So it’s big money. Yeah, that’s a lot for quite a service, but not the best, you know. Not a lot of competition to incentivize, to give a better service. So it’s a lot deep down in the developer’s pocket. And it’s kind of like taking the industry down in a sense. Ios 14 with a updated privacy. Are you familiar with the update of iOS 14?
Kevin Rosenqvist: No.
Maor Sason: No. So in a nutshell, a few years ago, I think it was like for Apple updated the iOS 14 update. And then in terms of privacy, you’re able to opt out when you install an app and they recommended to you instead of like they opt you in automatically in order to get out of the system and not to have the data saved, you need to go to the settings and go to like a complicated funnel. What it led to is that most people don’t want to have their data saved, and then they were not tracked. And then it’s harder to target you as a user. And that led to way higher prices to target you as a user, which led to a higher user acquisition cost for every user. And that’s kind of changing the game and the strategy for all game developers. So it really shakes the economy. On the gratitude of Apple. And I think that that’s going to take us to the direct to consumer strategy. That’s going to be like the savior for this whole mess. We’re helping mobile game developers to maintain or even increase their user acquisition strategy and capabilities even prior to iOS 14 update, saving the mediator the mediation costs. Let’s call it like this. It’s taking back like sane margins. And that’s where we aim to.
Kevin Rosenqvist: And so yeah, if your company is Appcharge and you allow companies to build custom stores, but they retain far more of their revenue. Correct. Yeah.
Maor Sason: More on the on the neighborhood of like 95% 5% rather than 70%.
Kevin Rosenqvist: That’s substantial. That’s a big difference.
Maor Sason: Yeah. Yeah. Yeah. So it’s more than 30% if you look at. That’s crazy.
Kevin Rosenqvist: I mean the 30%. That’s a huge number that they take. I mean, I didn’t realize that until I started digging into what you do and, , you know, that that blew me away. So, tell me how does Appcharge work? So I have a cool new game. It’s going to take the world by storm. I know it will. And I want to monetize by offering daily bonuses, chance for people to buy upgrades and whatnot. So what’s my first step? How do I do this with Appcharge?
Maor Sason: Let’s zoom out for a minute. But are you familiar with Shopify?
Kevin Rosenqvist: Yes. Of course.
Maor Sason: Imagine Shopify, but just for mobile game developers with all their unique needs and integrations and payment processing capabilities that we’re providing. We are a white label solution. And we’re the platform for mobile game developers that want to monetize outside of the platforms. And we build them the store straightforwardly. So if you’re a game, Kevin, and your domain is Kevin Combs, and you want to facilitate the shop on kevin.com/shop, you’re going to use the arbitrage platform to assemble the exact look and feel store that you have in game with all the necessary features that the ones, the cool ones that are getting retention, the ones that are the users are lusting for alongside with the service and the capabilities and the the integrations that you need in order to function and to work in harmony with your game. So that’s like in a nutshell, what we do, but it’s way more fun. It sounds complicated. It’s way more fun than that because it gets the people excited, like in their organizations and internally in the studio, so they can finally offer like cool bundles that they were not offering, not able unable to offer it to to gain to their users, and also is going to lead them to later on to buy more users and increase the gain and you know to find the more features and and more studios later on.
Kevin Rosenqvist: That’s awesome. That’s really, really cool. And so how would someone do it with Google or Apple? Like, would that just be like, is that sort of built into their functionality? Do they have to set it up the same way?
Maor Sason: No, no, it’s it’s a totally different platform and system that’s not connected to Apple and Google. It’s it’s oh, it is not even advertised. No no no no no. It’s a web store. It’s not the only thing that Apple is doing upcharge. We’re providing with comprehensive solutions right for direct to consumer. But if we’re talking about the web shop it’s external to Apple and Google. So imagine you have Apple, you have Google and you have your own shop on online on the web, just like if you would sell anything else on the web. And it’s not connected to Apple and Google, it’s not advertising in the game itself.
Kevin Rosenqvist: Okay. Yeah, yeah. And it’s like the user doesn’t even realize they’re going somewhere else. They just feel like they’re still in game, right?
Maor Sason: No, no, they’re totally aware that it’s, developers web shop. They see it as them helping the game developer that they love and are invested in. And they’d like to cut the mediator and invite direct from the developer, essentially. So let’s say you love a certain brand, and instead of going to the department store and get it, it’s like, hey, I love this brand. I’m gonna look online, what’s going on there? And the brand’s website, and you’re just going to buy directly. Probably you’ll see more products. Probably you’ll have a loyalty program that’s going to let you know with the newsletter if you’re really into the brand and you’re going to get like a better offering, it works like that. And every commerce in every industry, why not in gaming?
Kevin Rosenqvist: Mhm. Yeah, yeah. And you, you’ve been in this business for a while And you, you’ve been involved in the in the marketing and or advertising world within games as well, connecting advertisers to mobile games and showing video ads and and you know, as much as I dislike commercials when I’m watching TV, I tend to be someone who watches the ads in a mobile game rather than paying to go ad free. Am I in the majority, would you say? Or am I in the minority? From what your data has.
Maor Sason: I would say you’re not. You’re not a minority and you’re not a majority. It’s somewhere. Somewhere a fair split. Okay. yeah. Yeah. Depends on the category of the game, obviously. But there are so many ad based, revenue games that you can choose to to upgrade. I did my my first venture with advertising and it’s interesting. It’s obviously now I got familiar with what’s going on besides me, loving games and gaming. Imagine, just like I said, for improving the the economics in order to improve scale. So it’s interconnected, the marketing and the margins. So once we are empowering the developers and we’re expanding their margins, we’re, let’s say letting them own the users and control their marketing spend way better than they were. They can plan it differently and they can they can plan it more long term. And once I don’t want to talk like an industry terms, but when an average rate payer is changing, so, so does your whole marketing strategy. So it’s it’s funny that, you know, I got to this crossroads. I wasn’t expecting it, but, you know, when the penny dropped, it’s connected. So we’re also, being some kind of, like, advisory for some studios and how to improve their marketing strategy and and GTM.
Kevin Rosenqvist: So you offer a lot more than just a web store, then.
Maor Sason: Oh, yeah. We’re a full service. Your wish is my command.
Kevin Rosenqvist: All right, well, give me the million. You’re one to talk.
Maor Sason: Exactly. Were you planning your revenge, red alert?
Kevin Rosenqvist: No, I was playing. I was just playing a card game called Euchre. I just keep losing, I guess, I guess I.
Maor Sason: I need to play with you. You heard of it? Yeah. I heard you like hiking.
Kevin Rosenqvist: I like what you like.
Maor Sason: Hiking.
Kevin Rosenqvist: Hiking? Yeah, I do like hiking. Yeah. Yeah I do.
Maor Sason: You guys have good, good spots there in Colorado.
Kevin Rosenqvist: Oh, yeah, I’m in Colorado. It’s just like. Yeah, if you like to hike, this is. This is the spot for sure. This is about as good as it gets.
Maor Sason: Definitely in the bucket list.
Kevin Rosenqvist: Is it really? Have you come to Colorado?
Maor Sason: Yeah yeah yeah yeah. Like the the bouldering there is great. Yeah.
Kevin Rosenqvist: Uh huh. Yep yep. Very good. Yeah. So tell me what games you got. What are the what are the big games that you zap charge that that people might know.
Maor Sason: So we work with top studios. top 15, 20 studios in the world where there are some categories where, let’s say 60% of the studio is working with us, and I cannot disclose the names, but.
Kevin Rosenqvist: That’s all right. What would you say the what’s the most popular type of mobile game? Like what is the one that’s the most, you know, the one that’s the most popular.
Maor Sason: Popular?
Kevin Rosenqvist: like the type of game. Like what kind of games? What kind of games are people downloading the most? Would you say? Are they Cod games? Is it RPGs? Casual? Hyper casual?
Maor Sason: Think like in terms of numbers. Mhm. Mhm. Of uh of active users. Not not in terms of revenue.
Kevin Rosenqvist: Okay. Besides active users. Yeah. Yeah. That makes sense. That makes sense. Mhm. I was curious to get your take on, on something. And I don’t know how deep in the weeds you go in this. But you know we hear so much about the metaverse and all that and, and specifically how it relates to gaming. You know, one of the use cases for blockchain technology and NFTs that get a lot of people excited is how they will work within the metaverse, being able to exchange digital assets. I’m curious, do you do you think that is the future of gaming? Is the metaverse going to be the future of gaming as we know it?
Maor Sason: Metaverse is going to be the future of gaming as we know it. I think metaverse is definitely gonna play a big part in gaming as we know it. But I don’t think it’s gonna make all other ways to interact disappear. Like today. Like before smartphones. Mobile gaming wasn’t big, right? But they didn’t annihilate the console. And in a way, it’s like a compliment. It was reinforcing. Definitely. I see a bright future for the metaverse once the technology is going to be a bit more advanced. We can already witness it. You know, the capability of Apple. Wow. Have you tried.
Kevin Rosenqvist: It? I have, I tried. No, I have not actually tried it.
Maor Sason: You should, yeah I should. The vision for something. Yeah. Yeah, something. Something else.
Kevin Rosenqvist: I just feel like, I don’t know, I feel like, I don’t know if I would like having that thing on my face. I mean, it seems like it’s kind of cumbersome.
Maor Sason: Yeah. Yeah, yeah. Not for a daily walk. Like, you see, like these crazy people driving with it, but more for a living room. Office. You said entertainment.
Kevin Rosenqvist: Yeah. Are you excited about it? Like, is it as a whole? Do you think it’s. Do you think it’s pretty cool technology that you’re excited about?
Maor Sason: Definitely. Yeah, I’m excited about it. It’s making me wander, taking me to some, like, dystopian movies and books that I like. It’s there. Mhm.
Kevin Rosenqvist: Do you think you think you’ll, you know, try to try to move out, charge into, into that realm if it, if it takes off. Is there if you thought about that at all.
Maor Sason: No I don’t think that it’s, it’s there yet. Commercially there is only the beginning. There’s a lot to do there. Like in terms of, like, you know, in the industry doesn’t exist yet for us to help out. And it’s being controlled by the platforms essentially. Yeah, yeah. Apple and Oculus. Meta. But once it’s going to get big enough. Definitely. Yeah. Aperture has room to comment.
Kevin Rosenqvist: Awesome. Well, that sounds pretty cool. Hey Mary, thanks so much for being here. The company’s Appcharge. And, yeah, best of luck to you. And, continue, continue. Best. Best of luck with continued growth.
Maor Sason: Yeah. Thank you. Thank you so much, Kevin.
Mobidictum interview with Maor Sason, CEO of Appcharge
Editor’s note: this article was originally published on Mobidictum’s website.
Appcharge is the leading DTC platform for mobile game publishers to maximize profits through owning player relationships.
They are the fastest-growing all-in-one global payment solution, but Appcharge goes beyond providing a payment service; it drives revenue growth for its partners by powering up stores with unique monetization features – features that exemplify the deep roots their team has in building and scaling mobile games themselves.
Appcharge was voted the Best Payment Service Provider at the Pocketgamer.biz Mobile Game Awards at Gamescom.
Maor Sason, CEO of Appcharge, answered our questions and gave invaluable insight about the industry.
What was your primary goal when you launched Appcharge?
The need for a direct-to-consumer platform has been clear to me for years. Developers work hard to create amazing games and content, but they then have to share so much of their revenue with App Stores.
When we launched Appcharge in 2022, our goal was to bring positive change to the mobile games industry by doing things differently, and now we’re seeing that happening at scale – both with more members joining our team and top-grossing publishers whose stores we power. We help publishers sell directly to their players and form stronger connections with them which is a win-win for both players who get more value and publishers who benefit from much higher margins.
What are mobile game publishers’ most significant challenges in monetizing their games effectively?
While monetization challenges can be highly particular, tied to your studio’s market and genre, some challenges are universal like competition, engagement, and eroding profit margins.
For competition, the market is oversaturated with high-quality games. So studios need to rise above the noise and win over gamers’ attention and also constantly innovate and stay fresh to retain their players. And this is especially critical for retaining your top-spending players.
Engagement forms another challenge – driving player loyalty and repeat purchases. Studios must create daily habits and ensure both their game and buying items on the store are part of the player’s daily rituals.
Finally, surging UA costs and the hefty 30% platform rev-share fee caused a massive erosion in profit margins. Put simply, big studios that do not optimize monetization via player segmentation, personalization, and a strong data-driven approach will struggle to remain profitable.
How do payment and compliance issues impact the growth of game publishers, and what solutions have you found most effective?
Payment and compliance issues can hinder the growth of game publishers by adding complexity and risk. Non-compliance can lead to fines and reputation damage, while inadequate payment solutions can result in lost revenue.
At Appcharge, we’ve addressed these challenges by creating a versatile payment infrastructure that supports numerous methods and currencies, ensuring seamless transactions worldwide. Our platform also includes automated compliance checks and strong fraud prevention, helping partners stay ahead of regulatory changes.
By handling these complexities, we allow publishers to focus on developing great games while scaling efficiently and confidently.
What are some common obstacles game publishers encounter when setting up and managing their own web stores?
We often meet with publishers who have been trying to “crack” DTC, without much success yet. The most common issue we see in these cases is simply stores that look nothing like the game – so players dislike them. Building a template web store is easy, but crafting one that feels native to your players is hard, and it takes effort.
Aside from that, we often hear from publishers that they struggled taking their store to market and reaching scale. We publish a lot of content on our blog on how to effectively do that, but it all starts with community management. As a publisher, you must form channels where you can converse directly with your players. Think newsletters, Discord, Facebook Messenger, and even influencers or streamers.
Another common obstacle is publishers who are not aggressive enough with the value they offer players on the web store, compared to the value players can find on the in-app store. To truly form a habit, players need to feel there’s a strong reason to keep choosing the store. Here too, there’s a “right way” to go about it and we always recommend our partners keep the same price points their in-app store offers, but offer significantly more value in the same packages if they’re purchased on the web store.
Which performance metrics are the most challenging to achieve?
Frankly, there’s no real “one size fits all” to successful web stores. The service Appcharge offers tends to be very bespoke. We view ourselves as the monetization partners of the studios we work with, rather than just a payments service provider or a vendor. As such, each of our partners has different goals for their DTC efforts and metrics they’d like to improve.
Moreover, metric goals must take into account the specific game context – the currencies available in the game, the game’s economy, the player community and their likes and dislikes, and more. Some of our partners focus on increasing the repeat purchase rate of their players, others focus on increasing average transaction and ARPU, and others may focus on wider spread adoption of the store among the player base.
What are some of the best ways to keep your game relevant in the market?
Web stores are sticky when they’re integrated and promoted in a game’s community channels to raise awareness and when they deliver hyper-clear value. For example, a game’s social media channel can post that there’s a way to get double the coins for the same price at the web store. That’s valuable to the consumer. Seeing this frequently will significantly keep the web store relevant if the offers cycle with what is beneficial in-game over time.
Repeat purchases are driven in several ways. Of course, social promotion is one of them, especially if the offers pair with a limited-time window or expiration date.
Gamification can also drive repeat purchases. For example, daily bonus mechanics will compel users to return to the store to claim bonuses. Further, a web store can offer additional bonuses or benefits over time as users work through a rewards funnel, activating perks based on web store visits and spending.
What are the challenges in making stores react in real time to existing player segments and monetization rules?
Since the entire Appcharge team comes from building and scaling the world’s biggest games we understand how critical personalization is for effective monetization. On the other hand, we knew we didn’t want to force our partners to learn a new system, or to re-configure their existing monetization rules and player segments. We wanted to create a web store that acts as an extension to their existing systems and reacts in real-time to each visiting player by only displaying the best offers for him.
So we built our store system from the ground up with that goal in mind. Each Appcharge store is connected via API to the publisher’s backend and displays fully personalized offers that follow the publisher’s existing player segments and monetization.
What are some of the toughest decisions you’ve had to make regarding innovation versus stability in your platform?
You just described a classic Appcharge tradeoff dilemma we often find ourselves in – a painful dilemma! Appcharge is already powering stores for over ⅓ of top-grossing mobile games and we don’t take that responsibility lightly. We know we want to serve our partners well and match their hunger for innovation and new features, but at the same time, we know we cannot risk bad player experience or the robustness of the payment platform.
A typical tough decision in this regard is taking the time to thoroughly test each feature before we release it to a client. I know startups are supposed to be “MVP this, MVP that” but we don’t really have the luxury of releasing “half-baked” features or fixing stuff on the go. To meet both ends, our amazing tech team had to design systems and infra to ensure a high level of QA and polish in days, instead of weeks.
I’m extremely proud of the level of innovation and new features the team has been able to push out this year, while still maintaining stellar platform stability.
How has your team’s past experience working at companies like Rovio, Huge Games, Moon Active, and Play Studios influenced your approach to solving problems at Appcharge?
The needs of a top-grossing game are different from a small-scale game, not to mention a fitness or music app. So we always think through the lens of – what tools and services would we have wanted back when we worked on such massive-scale games?
Working with leading mobile game studios requires you to anticipate their needs and update the platform to provide exciting new solutions, whether it’s rewarding players with progress bars or developing new ways to tailor offerings to the most engaged players based on when and where they’re playing.
When we carefully consider what we’re building at Appcharge, how we can service our clients best, and what drives value to them and consumers. Every decision comes down to whether this is a valuable addition to our partners and their players. If it’s not, we don’t waste time on it.
Appcharge is an associate sponsor for the Mobidictum Conference 2024. Miikka Luotio, VP of Business Development at Appcharge, will be a speaker at the conference, which will take place on October 15-16 in İstanbul. Book your ticket now to meet this amazing team and other industry professionals!
About Appcharge
Appcharge is the leading direct-to-consumer platform for game publishers to maximize profits through relationships with players. The company is the fastest-growing all-in-one global payment solution, enabling game studios to scale paying user growth, customize webstores, optimize player retention, and gamify offerings. One-third of the top-grossing mobile games choose Appcharge as their preferred partner.
Appcharge supports 500 payment methods and 80 currencies, making partners financially compliant worldwide in minutes. Headquartered in Tel Aviv, Appcharge is funded by Gillot Capital Partners and Play Ventures and is led by veterans from Rovio, Huge Games, Moon Active, and Play Studios.
Alternative App Stores Lead the Conversation at Gamescom 2024
Gamescom 2024 may be behind us, but one trend is clear: alternative app stores are redefining the mobile gaming landscape.
The Rise of Alternative App Stores
This year’s Gamescom saw a surge in interest around sideloading and alternative app stores, from the much-anticipated Epic Games Store to established platforms like Huawei AppGallery and Aptoide. Even new players and OEMs are stepping into the space, signaling a significant shift in game distribution.
These platforms are challenging the dominance of traditional app stores, offering publishers new ways to reach players and monetize their content.
What This Means for Game Publishers
Much of the mobile games industry has already caught up to the DTC Web Stores hype (judging by the high adoption rates across various categories). But with the rapid expansion rate of sideloading and alternative app stores, publishers should be ready to meet the opportunities this new wave of DTC will bring.
In other words, publishers should become better acquainted with the major platforms’ current policies, such as when and where sideloading is supported. Additionally, publishers should explore integrating 3rd party payment services (hey 👋) for their game’s in-app payments – so they’ll have an adequate game version ready for distribution via new app stores.
Key Players in the Alternative App Store Market
Epic Games Store: Known for its developer-friendly revenue-sharing model, it continues to attract attention from top-tier publishers. Platform fees: 12%
Setapp: The new app store on iOS offers users a $12.49/month subscription for full access to hundreds “carefully selected assortment of apps” for both iOS and Mac. Platform fees: 10-30%
AltStore: Ideal for indie apps that “aren’t allowed in the App Store for one reason or another”. Platform fees: €1.50/year for AltStore users
Amazon Appstore: Amazon’s Appstore is another important player, especially in markets where Amazon devices like Fire tablets and Fire TV are popular. It offers a different distribution channel with its own set of promotional tools and revenue opportunities. Platform fees: 30%
Huawei AppGallery: With its expansive global reach, Huawei’s store is becoming a strong contender in the mobile app market. Platform fees: Not specified
Samsung Galaxy Store: A significant alternative app store for Android users. It comes pre-installed on all Samsung devices and offers unique opportunities for developers to reach a vast audience. Platform fees: 30%
Aptoide: An independent app store offering developers more flexibility and fewer restrictions. Platform fees: 25% or less
The Future of Mobile Game Distribution
The momentum behind alternative app stores and DTC sales is creating a more competitive market where publishers have greater control over their distribution strategies, leading to better terms, more diverse revenue models, and ultimately, a richer ecosystem for players.
Appcharge’s Role in This New Era
We’re thrilled to be part of this industry shift.
Whether through our web store builder, web store checkout technology, or SDK for in-game payments, our tools and services are built to help game publishers thrive in the DTC landscape.
Don’t take our word for it – Appcharge was voted Best Payment Service Provider at the PocketGamer.biz awards at Gamescom 2024!
We’re proud to already be working with ⅓ of the top grossing mobile games – and we’re just getting started. 🚀
Follow us on Linkedin to stay up to date with our news, articles, and product updates.
Appcharge Named Best Payment Service Provider at PocketGamer.biz Mobile Game Awards
We’re thrilled to announce that Appcharge has been voted the Best Payment Service Provider at the PocketGamer.biz Mobile Game Awards, held during gamescom 2024!
This award is a huge honor for us, and it speaks to the hard work and innovation our team has poured into scaling our payment services for game publishers.
We’ve been on a mission to help the world’s leading mobile game publishers sell directly to players, and this recognition shows that we’re on the right track — but we’re just getting started.
We want to extend a massive thank you to our partners, clients, and everyone who voted for us. Your trust and support drive us to continue innovating and delivering top-notch payment solutions.
Stay tuned for more exciting developments on the horizon!
4 Creative Strategies For Driving Players to Your Web Store, Inspired by Pokemon GO, Merge Dragons, Candy Crush & Subway Surfers
Building a beautiful and profitable web store is hard enough, but many publishers find that the real challenge begins after their store is built and published.
That’s because they need to create a new behavior among their users: buying in a web store instead of the in-game store.
If you manage to create this new habit, web stores will be a powerful afterburner to your product revenue.
But changing user behavior is not easy in this context. Here’s why:
It’s quicker for players to buy items in the in-game store vs. an external web store
You can’t promote web stores in your game at all in the US
In the EU you can mention your external D2C web store in-game, but can’t link directly to it without Apple taking a cut.
So, how do you get players to your web store without getting a slap on the wrist by platforms?
In this article, we will look at 4 creative strategies – covering both best-practices and out-of-the-box tactics. Let’s dive in!
4 Creative Strategies For Driving Players to Your Web Store
1. Build a social media community
For your out-of-app monetization to have a solid foundation for sustainable growth, you must build a community to support it.
This could be on Facebook, TikTok, Twitch, Discord, Reddit, or wherever else your players hang out. Some useful references:
Once you have an engaged community, weave promotions for your web store into your posting schedule. Promote time-limited offers and special bundles, along with cool features available in your store, such as gifts-for-friends and loyalty programs.
2. Create an email newsletter
It might sound left-field, but an email newsletter can be a great way to forge deeper connections with your community. You could do a monthly newsletter that features content about your game.
For instance:
Facts about your characters
Interviews with your game designers
Audience-sourced game art
News roundups
Upcoming in-game events
Gram Games are a good example. Since October, 2023, they’ve sent a weekly or biweekly newsletter for their Merge Dragons game, filled with intriguing game facts. These newsletters don’t directly promote their web store, but they consistently draw players to their website where their store is found.
If you manage to create a newsletter your players enjoy reading, you’ll be well-positioned to naturally weave in web store offers and drive traffic to your website.
To ensure as many visitors convert into buyers, focus on optimizing your store with appealing game art, exclusive offers, and gamification mechanics.
3. Run real-life events
If you’re a publisher with a large, dedicated playerbase, running real life events which brings together your community can be a highly effective way to onboard them onto your web store.
Niantic serves as your north star: they drew in 194,000 people to its three real life Pokemon Go events in 2023, each on a different continent.
The augmented reality game is naturally suited to real life gamified events; the results are testament to this and the strength of their player engagement. From the New York City event alone:
35 million Pokémon were caught during the Pokémon GO Fest
Attendees walked an average of 18.6 miles while capturing Pokémon and making connections with other Trainers
Not only can Niantic promote their web store using QR codes and other marketing tools during their live events, but they can increase web store interaction before the event too.
As stated on their website:
“Trainers who purchase their ticket from the Pokémon GO Web Store will receive an exclusive GO Fest 2024 T-shirt avatar item in an exclusive color. Like the GO Fest event badge, the T-shirt will arrive closer to the date of the Pokémon GO Fest event.”
Creating and executing a real life event is no easy task – consider pairing it with popular trade shows like Gamescom, where publishers run an array of fan-focused activities. You can create a separate event for your VIP players who are already in town for the tradeshow, for example.
4. Leverage brand collaborations
With a growing number of businesses looking at games as a channel for brand marketing campaigns, publishers should capitalize on this opportunity to turn their web stores into hubs of exciting and exclusive branded content.
Here’s how that might look:
– Integrate brand collaboration into your game
– Leverage the excitement to offer one-off items in your store themed around the brand
– To maximize conversions, offer exclusive deals and update store game art
– Make sure the brand actively promotes your web store as part of the collaboration terms
To make this concept more concrete, here are a few collaboration references which you could apply the above blueprint to:
Candy Crush Saga x Barbie Movie: they collaborated on an in-game event which introduced Barbie-themed quests.
Fornite x LEGO: over 1,200 Fortnite outfits received an additional LEGO Style, playable in the game’s new LEGO®-themed experiences
Clash of Clans/Royale x Chess.com: Clash of Clans and Clash Royale launched chess-themed seasons, including chess Hero Skins and exclusive cosmetics. In addition, Chess.com featured Clash-inspired chess pieces and the chance to play chess with Clash characters.
Final takeaways
If we look through the above strategies, we can see a theme. Be it a newsletter, social media channel, real life event, or brand collaboration, these strategies all serve to create and nurture a vibrant out-of-app ecosystem around a game that naturally complements web stores.
Until publishers can link directly to web stores from inside their games without losing revenue or getting penalized (don’t hold your breath), leveraging out-of-app channels will continue to be key to driving traffic to your web store.
How to Choose a Web Store Platform for Your Mobile Game
The bandwagon is well in motion: nearly all top mobile game publishers developed a web store in 2023, and many more will follow suit in 2024.
Some publishers chose to build their web store in-house from scratch, but the vast majority of mobile publishers chose to use an external, white-label platform to build and manage their web store.
However, with several white-label web store platforms to choose from, it can be challenging to identify the ideal option for your game.
It’s a crucial decision – migrating to a different web store platform later on will likely be a major headache. That’s why we’ve written this article – to help you understand the key considerations when choosing a white-label web store platform. Let’s get started.
What is a mobile game web store?
A web store is a direct-to-consumer store in which developers and publishers sell digital items and bundles to their players. Web stores are not a replacement for the in-game stores we’re all accustomed to; rather, they’re an additional game monetization channel.
Web stores exist outside of the Apple or Google ecosystem, which means developers bypass the traditional 30% fees in every transaction.
So what do developers pay, we hear you ask? That depends.
Larger publishers may choose to build their own web store in-house from scratch and act as their own Merchant of Record, which would see them earn most of the royalties from their sales (minus payment fees). This approach requires significant investment in both time and money, which you can read more about here.
Most publishers, even larger ones, however, will leverage white-label web store platforms and existing Merchant of Records. Such platforms often take care of all the tech and payment infrastructure, and in return take a share of the sales royalties – anything from 5 to 15 percent, depending on the company.
Can you build your own web store tech?
Yes, you can build your web store technology internally. To do this, generally speaking, you’d need:
A team of specialist engineers and product designers
A lengthy runway – it can take a minimum of 4 months to globally launch a basic web store from scratch
A payments team (or external vendor) to handle Merchant of Record functions, such as refunds, chargebacks, invoicing, and fraud
A commitment to investing in frequent development work to optimize and update your web store, so it’s as dynamic as your game
These are just the base components – there are a whole host of other requirements that come with building your own web store in-house – which gives you an idea of the scale of the task.
That’s why publishers are increasingly turning to white-label platforms for their web store needs. With that in mind, let’s look at your top considerations when it comes to choosing the right platform for your game’s web store.
How to choose the right web store platform for your game
From Appcharge to Xsolla, there are various companies offering plug and play web store platforms for mobile game developers. Choosing the right platform is an important decision.
Here are 3 key considerations:
1. Make sure they have reasonable, transparent fees
In return for getting an out-of-the-box white label web store, you need to share some of your margins with the web store provider to ensure mutual incentive. If you choose the right vendor, this fee is well worth the money and time you save on assembling a team of engineers to build a store from scratch.
However, some white label web store providers take up to 15% per transaction, while others have many types of hidden fees that lead to lower margins than expected.
While these fees are still significantly lower than Apple’s commission, it’s important to choose a white label web store that is transparent in its pricing terms to ensure you are building for future scale.
Make sure you get a detailed breakdown of the fees before making any decisions.
2. Ensure they’re reliable and customer-oriented
You don’t fully own your web store when you’re using a third party solution. You also don’t control the operations behind it.
Should the vendor get hacked, close down, or go through any other kind of mismanagement – you could be at risk of experiencing interruption to your web store and the revenue it generates.
This can be avoided by working with a boutique web store provider run by people you trust. Do your research about their security practices, read case studies, and talk to the platform’s team to ensure you are as confident as possible about their reliability, security, and support.
3. Check they’re gaming-first
As a game publisher, you ideally want the team behind your web store platform to come from gaming backgrounds. Better yet if those individuals have experience working in LiveOps. That way, you know you’re working with people who truly “get” your needs as a developer, the needs of your players, and the ins and outs of the games industry.
Taking this a step further, you want to be working with experts who know how to push you forward and suggest revenue-boosting strategies.
Without this, you risk being on different wavelengths with your point of contact and missing out on growth opportunities in your web store.
To avoid this, make sure you choose a web store platform that has been built by games industry experts. The Appcharge team, for example, includes leaders with backgrounds at top mobile game developers like Moon Active, Rovio, Tilting Point and more.
Choosing a web store for your mobile game: Final takeaways
In 2024, the rise of web stores is not just a paradigm shift; it’s a strategic imperative for game developers seeking autonomy and financial resilience.
The choice of the right web store platform becomes a linchpin in this journey, determining not only the trajectory of your game but also the extent of your independence in a rapidly evolving gaming ecosystem.
With several web store platforms on the market offering similar products, looking for differentiating factors that will provide you a competitive edge is important.
Transparency, financial legitimacy and reliability are key areas to dive into during your decision process, but perhaps the most important factor is if the web store platform is made by game industry veterans.
The right web store platform is more than a service provider; it’s a collaborator with a deep understanding of the gaming realm. Opting for a platform crafted by industry experts ensures a synergy of goals, where your success as a developer aligns seamlessly with the strategies and insights provided by the people behind your web store platform.
A Perfect Storm: 5 Industry Trends Fueling the Rise of Web Stores
2023 saw numerous leading mobile game publishers build their own web stores, allowing them to sell directly to players – and bypass the usual 30% fees in the process.
But what’s driving this strategy? Why are web stores emerging as must-have monetization channels now?
Below, we unravel the threads that tie key games industry trends such as extended development timelines, rising user acquisition costs, and the changing face of hyper-casual, to the pivotal role web stores play.
You’ll come away understanding how exactly web stores can fuel sustainable revenue growth for mobile game publishers in 2024 and beyond. Let’s jump in.
1. Extended Development Timelines
Trend: Developing games now takes considerably more time. “Gone are the days of creating a new prototype weekly or even a few each month”, John Wright, VP of Publishing at Kwalee, notes. “Teams are now investing more time in research, ideation, and game development, resulting in fewer opportunities”.
Enter, web stores: With the days of rapid prototyping and frequent game launches seemingly over, studios must focus on really squeezing the lemon from their existing successful titles. Web stores provide a way to both meaningfully increase bottom line profit and retention rates.
With gamification mechanics and exclusive offers that give players more value than they’re able to get anywhere else, web stores serve as a powerful antidote to the financial impact caused by the reduced frequency of new game launches.
2. The evolution of hyper-casual
Trend: Hyper-casual was not just a game genre, it was a business model. One that revolved around aggressive UA, ads, and rapid game prototyping. Hyper-casual games are still around, but the boom has dissipated. Testament to this is the fact that revenue generated by hyper-casual games dropped 10% in 2022 compared to 2021, down to $12.3bn from $13.7bn.
With aggressive UA and a profitable game an increasingly elusive combo in the post IDFA landscape, many studios who focused on hyper-casual in recent years have been forced to deepen their game mechanics, develop more complex and innovative games, and shift away from the ad-centric model.
Enter, web stores: With web stores enabling publishers to sell digital items directly to players, outside Apple’s walled ecosystem, it’s now far more viable to shift away from the ad-based model and operate an IAP-centric game.
The reason is simple: publishers’ margins are higher for every transaction.
Studios can either develop their own web store in-house and pocket all of the revenue (minus payment fees and the high cost of actually developing the store), or use a white-label solution that takes a marginal fee but allows them to quickly build a powerful, customizable web store that still massively lifts their profit.
3. The demand for compelling meta
Trend: The shift away from basic hyper-casual game mechanics, and users’ high expectations for games to operate as live services, has led established games publishers to double down on compelling storylines and meta games.
Enter, web stores: If compelling storylines, deep meta games, and robust live ops are the engines behind established, evergreen games, then web stores are the top up of fuel to help keep everything running.
That’s because web stores have the potential to increase retention: publishers can delight their most engaged players with so much extra value, and use gamification mechanics like daily bonuses, progress bars and loyalty programs to create a fun experience.
In doing so, publishers can create a virtuous cycle of growth of increased profit, higher retention rates, and more engagement in their meta features and liveops.
4. Major Publishers are Focusing on High Revenue Potential Games
Trend: John Wright revealed how Kwalee is testing fewer games now, focusing more on those they believe “can become tier 1 launches generating $5-10 million or more in lifetime revenue”. Similarly, he shared how Kwalee is “prioritizing an understanding of monetization results over marketability”.
Enter, web stores: Studios looking to work with top publishers must prioritize making sustainable, profitable games. Web stores provide one of the most powerful yet simple ways to achieve this.
Customizable designs that feature your game art, a seamless checkout process that supports hundreds of payment methods, localized prices, and a whole host of gamification mechanics make web stores engaging for players and dynamite for mobile game revenue.
And the best part is white label platforms like Appcharge handle all the heavy lifting for you, meaning web stores are not only accessible to the biggest publishers who can afford to build their own store in-house.
5. User Acquisition Costs Are Rising
Trend: The primary challenge many gaming studios are facing is running effective UA at scale while ensuring profitability. Kwalee, for instance, is investing 25 times more in user acquisition per title. This has to be compensated for somehow.
Enter, web stores: As should be clear by now, web stores – when managed smartly – provide significant uplift to profit margins for games selling digital items to players. White label web stores charge anywhere between 5%-15% in fees, in addition to minor payment processing costs – a far cry from Apple’s 30%. With this added cash flow, studios are afforded a lifeline that they can reinvest into their business growth.
Final takeaways
All of these trends create a perfect storm for web stores. Sometimes this industry has seen tech solutions being made for problems that don’t yet exist (*cough* web3 games *cough*).
But web stores have emerged at a time where there is a real need for mobile games to find new revenue streams. Not only did Apple turn the industry on its head by deprecating the IDFA, but their 30% cut from every in-game transaction adds insult to injury.
Thanks to Epic Games, studios can break out of this walled garden and usher in a new era of monetization.
Beyond the App Store: The Future of IAP Monetization
The future of in-app monetization is, well, out-of-app.
With Apple’s deprecation of the IDFA and longstanding refusal to adjust their 30% tax on developers, in addition to an overall drop in game revenue across the board, the mobile gaming landscape has been feeling the strain.
But the industry received a lifeline thanks to Tim Sweeney and Epic Games. As a result of their much publicized legal battle with Apple, it was ruled that app developers can, through communication with users outside of the app only, direct them to their own external web stores to purchase in-game items, bypassing Apple’s 30% commission.
While industry giants have been quietly building out their web stores with in-house resources, the vast majority of studios don’t have the war chest to do the same. And so we launched Appcharge. Our mission? To revolutionize IAP monetization with a direct-to-player monetization platform that gives developers a headstart from the get-go, rather than a handicap.
Keep reading to learn more about the rise of mobile game web stores and how you can use Appcharge to power your direct-to-player monetization strategy.
The growing importance of out-of-app monetization
Looked at solely through the lens of bypassing Apple’s 30% tax, web stores are a no brainer for games. But the need for web stores is made increasingly urgent when you consider three trends that are making monetization of game items all the more crucial in our industry.
The emergence of games-as-a-service model
Gamers have increasingly high expectations of what a game should be; games are expected to constantly evolve, add new features and experiences. On one side of the coin, this puts a strain on the budgets of studios, who need to hire liveops teams.
On the other side of the coin, a natural product of a liveops strategy is greater room for IAP monetization. New battle passes, in-game items, and special offers are hallmarks of liveops strategies – it’s just when you cut 30% off from all transactions, there isn’t much room for error in order for the investment on those liveops salaries to pay dividends.
Webstores represent a major boost to liveops-focused games. Not only do they provide studios with more breathing space and better return on their liveops investment by bypassing Apple’s 30% cut, but they actually facilitate more robust and engaging offers for users. From highly personalized offers to new loyalty programs, webstores serve as the backbone of a profitable and sustainable liveops strategy.
From hypercasual to hybrid casual
The second trend that highlights the growing importance of IAP monetization is hypercasual’s shift to hybrid casual in recent years. Apple’s deprecation of the IDFA essentially killed the hypercasual industry, which relied on hyper-efficient, targeted user acquisition, and quick ad monetization from users with low LTVs.
This model has been jeopardized as a result of Apple’s changes: revenue generated by hypercasual games dropped 10% in 2022 compared to 2021, down to $12.3bn from $13.7bn.
As a result, hypercasual developers are being forced to find ways to add deeper layers to their games, in order to increase user retention and LTV, and add IAP monetization to the previously ad-focused model.
Overall reduction in ad monetization
It’s not just the hypercasual category that’s feeling the heat. Following the IDFA apocalypse, games across the board are spending less aggressively on UA.
Consequently, 2022 saw a reduction in eCPMs compared to the previous year, causing games to earn less money from ads. And it’s unclear if the industry will recover to its pre-IDFA levels of ad monetization in the near future.
In order to survive, games must build out their IAP monetization strategies.
Direct to player: A new era in gaming
A perfect storm
All of these forces, and the Apple-Epic legal case, combined to create a perfect storm for the rise of D2C web stores in mobile gaming.
Industry leaders like Supercell, Niantic, Moon Active, Playtika and Scopely, all of whom monetize heavily from IAPs, already launched web stores for their hit games. Numerous others have followed suit.
The benefits to game developers of D2P web stores are obvious: a significant uplift to their profit from sales of game items. Instead of losing 30% of all revenue to Apple, developers who build their own online stores pocket all of the fee.
Challenges of web stores
However, there are challenges posed by web stores. Firstly, Apple forbids games from advertising their external stores inside their apps – meaning developers need to find alternative ways to inform users. For large, legacy publishers with strong followings on social media, this isn’t such a big issue. For smaller outfits who are still building their brand, it requires some thinking – like partnering with influencers and building a strong community.
It’s also much more convenient for a user to make an IAP within the game, rather than going to an external web store. Because of this, developers will need to find a way to incentivize this change in user behavior. However, given the large boost to their margins afforded by web store transactions, discounts and incentives like loyalty programs can be offered to get the ball rolling and begin changing user habits.
Lastly, using in-house tech to build and maintain a web store, in addition to supporting global payments and compliance, requires time and significant investment. Appcharge’s co-founder actually led the development of Moon Active’s web store and knows first-hand how time consuming and expensive it can be. Giant companies like Moon Active can afford to do this, but most others need a third-party tool that makes it easy to launch a web store.
Enter: Appcharge.
Appcharge: Powering the D2C mobile gaming economy
Appcharge offers a white-label web store platform for mobile game developers. Taking just a 5% cut from purchases, our platform allows for total customization, with developers able to design every aspect of their store, use gamification elements to boost engagement and encourage repeat purchases, set up segmentation to provide the most relevant offers for all users, and seamlessly handle payments and billing.
The best part?
After the initial integration to update the balance in customer accounts, the entire D2P monetization strategy can be managed by live ops and monetization managers – no technical development needed.
Compared to building your own web store, this saves significant resources and allows teams to focus on building out a winning D2P strategy that improves user engagement, strengthens retention, and increases repeat purchases.
The future of IAP monetization is here, and we’re proud to be leading the way.
Unlock Your Game’s True Revenue Potential with Appcharge
Ready to transform your game’s monetization strategy and reap the rewards of out-of-app web stores? Get started with Appcharge today and watch your revenue skyrocket while creating a more engaging and personalized experience for your players.
