Research from Coda, the global firm focused on content monetization solutions for gaming and digital publishers, and Niko Partners, the provider of market intelligence on the video game industry in Asia and MENA, dives into “the evolving landscape of the gaming industry, and the opportunities in digital distribution and monetization strategies for mobile game publishers.”
The whitepaper also highlights “the fragmented payments landscape, differing market dynamics, and the solutions games publishers should consider to maximize returns by leveraging alternative monetization strategies.”
Primary app stores have been “the cornerstone for app discovery, distribution, and monetization for over 15 years.”
Today, gaming and other digital content publishers “want more versatile and flexible ways to sell their digital content.”
To do this, they develop strategies “that are not only more holistic, but also wider in reach across diverse markets and robust in providing direct consumer insights.”
This shift is driving the growth of first-party web stores, “where publishers sell directly through their own websites, and third-party web stores, where publishers partner with other digital marketplaces or e-retailers.”
In addition to lower costs when compared to primary app store fees, these new channels offer significant opportunities “for monetizing content outside the confines of conventional app stores, enabling publishers to reach millions of gamers in markets with low credit card access and usage.”
According to Lisa Hanson, President and CEO of Niko Partners:
“We need to recognize that purchasing power varies market by market, and that consumers like to have a choice about how they access desired content. Out-of-app monetization helps to unlock revenue in markets where gamers have different options compared to Western markets, from alternative payment methods to tighter budgets for game spending.”
In Southeast Asia, out-of-app monetization “is estimated to account for 21% of all mobile game revenue, and this share is even higher in certain markets. For example, in China where Google is absent, third-party distribution accounts for 53% of all app monetization. While credit card payments through primary app stores serve a broad user base in many developed Western markets, a significant segment of Asian gamers opt for alternative payment methods, including e-wallets, phone carrier billing and calling card top-ups. To address the dynamic needs of these markets, and to unlock new revenue, publishers need to expand their payment options beyond those typically found in app stores.”
Shane Happach, Chief Executive Officer of Coda Payments, commented:
“At Coda, our goal is to catalyze this growth globally by partnering with publishers to diversify their monetization strategies beyond primary app stores and beyond borders. We arm publishers with the tools and insights they need to unlock alternative content distribution channels such as our gaming top-up marketplace, Codashop, and our 100% customizable D2C web stores, Custom Commerce.”
In 2023, the Southeast Asian games market “generated US$5.8 billion in revenue, more than five times its value for the Southeast Asian region in 2010.”
More gamers have “entered the market- there are 286 million mobile gamers in Southeast Asia alone and this number is expected to grow to 326 million in 2027 – but this means that more players are also inadequately covered by primary app distribution and payment methods.”
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