Unlocking Revenue: The Rise of Out-of-App monetization in Gaming Beyond App Stores

A recent white paper by content monetization platform Coda and market intelligence platform Niko Partners delves into the dynamic shifts in the gaming industry, spotlighting alternative monetization strategies and the burgeoning move away from conventional app stores.

The report underscores the increasing significance of digital distribution and monetization tactics for mobile game publishers. Noteworthy revelations include the ascendance of first-party and third-party web stores, offering enhanced flexibility and versatility for the sale of digital content compared to traditional app stores.

While primary app stores have long dominated app discovery and monetization, the industry is witnessing a paradigm shift driven by a desire for direct consumer insights and broader market outreach. First-party web stores, where publishers directly sell through their websites, and third-party web stores, fostering partnerships with other digital marketplaces, present cost-effective alternatives with substantial monetization potential beyond conventional app stores.

The report spotlights the surge of out-of-app monetization, particularly through web stores, gaining momentum in regions with limited credit card access, exemplified by Southeast Asia, responsible for 21% of global mobile game revenue. Notably, certain markets in the region, such as China, rely on third-party distribution for 53% of app monetization.

Recognizing the diverse payment landscapes in various markets, the report emphasizes the need for publishers to adapt payment options, including alternative methods such as e-wallets and phone carrier billing. In Asia, first and third-party web stores have been the norm for over a decade.

With the Southeast Asian games market generating $5.8 billion in revenue in 2023 and expectations of continuous growth, Coda envisions expanding global reach by partnering with publishers. The report predicts a rise in mobile gamers from 286 million in 2023 to 326 million in 2027.

Despite challenges posed by a significant “unbanked” adult population, around 40-50%, and over 100 payment methods and providers, the report advocates for diverse payment options. Collaboration with partners possessing local expertise, diverse marketing channels, and influencer networks is highlighted to unlock the vast potential of Southeast Asian markets.

In essence, Coda and Niko Partners’ comprehensive report accentuates the industry’s transformative trajectory, highlighting the escalating importance of alternative avenues for content discovery, distribution, and monetization. Publishers are urged to diversify their strategies beyond primary app stores to harness the expansive potential of evolving markets, particularly in Southeast Asia.