Whenever someone asks me about what I do for a living, I tell them that I write about games and how people make money from games. Giving that answer eventually led me to an idea for a new podcast that dives deeper into that topic.
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How Ironsource makes money
At Ironsource, Kaplan oversees a business of serving ads to players in what the company calls hypercasual games. These are usually small and simple games that people can get into quickly for short sessions on mobile devices. Millions of people play these games, but they are not exactly the kind that typically leads to people spending money. But this isn’t not a problem for the games that Ironsource works with.
“What we’re seeing in the last four or five years is a very strong push toward making more money from ads,” Kaplan told GamesBeat. “And ads in games are a bit different than how ads work in general. These are actually a hybrid between microtransaction and in-game advertising.”
These ads work by rewarding players with in-game resources and items for watching videos. So instead of paying with money, you can pay for microtransactions with your attention. This leads to a much more engaged viewer — and even more than that, they tend to feel grateful toward the commercials.
Ads for games within other games
One odd quirk of this system is that the ads are almost always for other mobile games. Isn’t a problem for developers if the Ironsource ads are sending players off to other games? Turns out it isn’t an issue at all.
“If you’re not spending money in one game, it doesn’t mean that you won’t spend money on another game,” said Kaplan. “It’s not just about moving users around.”
Hypercasual games just work differently than something like a Candy Crush Saga. A hypercasual game usually comes and goes over a period of a few months. Its whole purpose is to feed players from one part of the ecosystem into another. King, meanwhile, has spent years optimizing and tuning its system to get players to actually spend money. And one builds on the other.
For more on this, please listen to my full conversation with Kaplan in the podcast above.