Beyond the App Store: The Future of IAP Monetization

The future of in-app monetization is, well, out-of-app. Hybrid monetization models that integrate in-app purchases (IAPs), ads, and direct-to-consumer (DTC) web stores are shaping the new reality for mobile games.

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With Apple’s deprecation of the IDFA and its persistent 30% revenue tax, coupled with an overall dip in mobile game revenue, developers have faced increasing monetization challenges. But the industry found a path forward thanks to regulatory shifts and the landmark Epic Games v. Apple case, which allowed developers to direct players to external web stores.

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The result? A major unlock for DTC monetization. According to our 2024 Web Store Adoption Report, 72% of the top-grossing mobile games now operate a web store. But while giants like Supercell, Moon Active, and Playtika have invested heavily in DTC in-house, most studios lack the resources to build their own infrastructure. That’s where Appcharge comes in, providing an out-of-the-box solution that lets developers launch and scale their web store with cutting-edge features.

The growing importance of out-of-app monetization

Bypassing Apple’s 30% fee is just one piece of the puzzle. The urgency for out-of-app monetization is driven by three major trends:

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.

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Web stores 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 deals to new loyalty programs, web stores 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

The combination of these factors has created the perfect storm for DTC web stores. The industry’s biggest publishers have already embraced this model—but it’s not just for giants.

Overcoming Web Store Challenges

Launching a web store comes with hurdles:

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• User education: Developers must lean on social media, influencers, and community-building for increasing awareness of their web store
• Behavioral shift: Players are accustomed to in-game purchases—so publishers need to offer strong incentives (discounts, VIP perks, or gamification).
• Tech & compliance complexity: Building and maintaining a global payment system is costly and time-consuming.

That’s where Appcharge makes the difference.

Appcharge: Powering the DTC mobile gaming economy

Appcharge offers a white-label DTC platform for mobile game developers. Taking just a 5% cut from purchases, our platform empowers developers to create fully customizable web stores with cutting edge monetization features, and fully handles payment processing, tax compliance, billing, and more.

Unlock your game's true revenue potential with Appcharge

Ready to transform your game's monetization strategy and reap the rewards of DTC web stores? Get in touch and our team will be happy to help.