Mar 6, 2025

Growth Insights Series: Tips for Monetizing In-App Purchases on Horizon: Execution

By: Chetan Maddipatla, Gabe Heiland and Jessica Cornick

In this second edition of our Growth Insights Series, we’ll dive deeper into how to effectively execute monetization plans for your app. If you missed the first article, which covered various tips to in-app monetization, you can find it here.

Regardless of your app or game genre, generating revenue isn’t a plug-and-play formula. Once your team has determined what content will be monetized, the next step is to consider how that content will be rolled out. The following topics offer a practical introduction to running a Live Service and ensuring your monetization strategy is both effective and user-friendly.

After you’ve outlined your monetization framework, the next step is to consider how to make it accessible to a wide range of users. Keep reading below to explore pricing, effective sales strategies, and content pacing insights to help you make the most out of your monetizable content.

Offer a variety of price points to meet users where they are

Price points and user sensitivity to pricing can vary significantly across games and genres. To maximize appeal, it’s essential to provide a wide range of price options, especially if a game or franchise is new to in-app monetization. Offering multiple price tiers ensures inclusivity for different demographics, such as varying age groups, regions, and levels of disposable income.

Many free-to-play (F2P) developers structure their pricing into three main categories based on user behavior:

Low (e.g. $1-$5)

These introductory purchases are often used to convert new users or provide small, affordable "top-up" options. Users are more likely to spend in this range to enhance their experience after engaging with a game for several hours.

Medium (e.g. $10–$30)

These purchases often include bundles or discounted currency packages. They aim to deliver the best value and introduce users to repeat spending opportunities.

Large (e.g. $30+)

These higher-priced options are typically reserved for users who have already made smaller purchases. They require careful placement and presentation to maximize their appeal and perceived value.

After establishing initial price points, ongoing testing is key. Consider experimenting with different price ranges, discounts, and ways to present offers. Adjustments based on your audience’s behavior can fine-tune your monetization strategy.

For example, games catering to younger audiences may need family-friendly pricing, such as battle passes or shared content, which tend to perform better than single-use purchases. This approach accommodates parents, who often prioritize safety controls and shared entertainment value.

Offering multiple price points and bundles is a great way to highlight value for users. Ensure your lowest-priced option isn’t overused or perceived as devaluing other offerings.

Bundling increases conversion and transaction value

People love a good deal, and bundling content is an effective way to meet this demand while protecting the perceived value of individual items. Bundling typically refers to combining different items into a single purchase, for example, combining a cosmetic item and multiple boosters. The key to successful bundling lies in crafting packages that appeal to various purchasing behaviors without devaluing standalone offerings.

Catering to broader audiences with value-driven bundles

Some games might bundle smaller cosmetic packs with a major content pack, appealing to users who may not have purchased those items individually. This approach allows you to offer better deals on content while reaching a broader audience.

When executed well, bundles present multiple price points and options for users. For example, users can choose between the base game, a version with additional content, or a premium edition containing all available extras—often for less than the cost of purchasing each item separately. Savvy users appreciate these options while you benefit from increased transaction value without significantly increasing development effort.

Established games can package new content as paid DLC ($9.99-$29.99). Multiple price options help different users find value, which can increase purchase rates.

Perception of quality dominates purchase intent

After exploring pricing and bundling strategies, it’s important to consider another factor: how users perceive quality. Understanding this perception is essential because it directly influences their decisions to make purchases across various monetization models.

Balancing quality and pricing

Quality is a moving target when it comes to digital goods, and finding the right balance between developer effort, investment and a pricing structure that won’t trigger price sensitivity can be challenging. Testing remains the most reliable method to understand what drives purchase intent for your specific audience.

Cosmetic items driven by social behaviors

Cosmetic items are a core part of monetization strategies because they appeal to users’ social motivations. They let users express group belonging, skill, status or achievements. To succeed, cosmetic items must look good, but the relative quality matters most. Users will value expensive items if their visual quality matches the price.

However, free or cheap items with equally high quality can make premium items feel less valuable. Maintaining this balance is critical to ensuring users see higher-priced cosmetics as worthwhile.

Premium utility enhances gameplay and reduces friction

Premium utility items focus on deepening user engagement by offering meaningful experiences or easing frustrations. To encourage purchases, these items must either expand gameplay (e.g. unlocking a new game mode or adding songs to a rhythm game), or offer relief, like larger inventories, faster progression or skipping repetitive tasks.

While effective, these features should be used carefully to avoid giving users the impression that a game was intentionally designed to be difficult or incomplete without spending. Maintaining a balance ensures users feel empowered by their purchases rather than pressured into making them.

Utility items can enhance gameplay, but ensure they are perceived as optional. Players may react negatively if purchases feel necessary for progression or provide unfair advantages (‘pay for power’).

Promotions are effective at driving conversion but come at a cost

Promotions are a versatile tool for increasing conversions, whether through limited-time discounts, ongoing offers or exclusive purchase opportunities. They can drive both new and repeat spending but must be implemented carefully. It is not uncommon for a promotion-led revenue spike to be followed by a revenue downturn once the promotion ends. Fortunately, these risks are predictable and can be mitigated with thoughtful planning.

Promotional strategies in gaming often mirror those in retail, as both rely on similar consumer spending patterns. Here are some common promotional tactics, as well as the associated risks:

Use sales to boost engagement

Sales are one of the most common promotional tactics, often used to mimic consumer behavior in physical retail. Discounting items or in-game currency is a powerful way to attract new users or motivate existing ones to make repeat purchases. For example, seasonal sales, like those during the holidays, can drive a surge in spending.

However, frequent or aggressive sales can devalue items and create unrealistic expectations. Constant discounts may result in users delaying purchases, waiting for the next sale, so keep the perceived value of your items in mind when deploying sales.

Create urgency with limited-time offers

Limited-time offers (LTOs) are an effective way to communicate scarcity and urgency. These promotions are often tied to specific events, like the launch of a new character, seasonal content or a battle pass. Users are more likely to purchase when they fear missing out.

It’s crucial, however, to use LTOs responsibly. If an item discounted as part of an LTO is offered again shortly afterward, users may lose trust in the exclusivity of future offers. Scarcity should feel authentic to maintain its impact and value.

Leverage price anchoring and laddering to guide spending

Price anchoring is a strategy that helps users perceive value by comparing prices. For example, bundling items for a discounted price or offering bonuses like "+X% currency" helps frame the promotion as a better deal. Be careful when using strike through or other indicators that you are not misleading consumers into thinking this is a sale unless you are actually discounting the established bundle price.

Laddering, on the other hand, introduces gradual pricing tiers, allowing users to scale their spending over time. This tactic is particularly effective in active communities where users are likely to compare prices and evaluate the perceived value of items. Both anchoring and laddering are relatively low-risk and can encourage users to make their first purchases or increase their spending incrementally.

In-game currency stores often use price anchoring to highlight value. Emphasize how smaller packs offer true value, while larger packs provide better deals for engaged players.

As with other strategies discussed, testing different promotional approaches is essential to identify what works best for your product. Experimentation, sometimes referred to as Price A/B testing, helps uncover the optimal designs, timing, and price points tailored to your audience. This process ensures that your promotions align with user behavior and drive engagement effectively. We will dive deeper into this topic in an upcoming article.

Regular content updates are key to boosting engagement and monetization after launch

Users are motivated to spend based on their engagement with the game and their perception of how the content will enhance their experience. Releasing compelling content at a consistent cadence is essential for sustaining engagement and maintaining a successful business model. Here are some key considerations for structuring content releases effectively.

Release new content every 2 to 4 weeks

Successful live-service apps and games often release new content every 2 to 4 weeks, depending on the size and scope of the updates. Frequent releases keep the experience fresh for users by introducing new challenges, continuing the narrative or offering unique features.

To sustain engagement between major updates, developers can include repeatable content on a schedule or provide time-based incentives like daily or weekly check-ins. These strategies keep users immersed and create a sense of progression.

Extend content lifecycle with progression systems and time-gating

Users are often eager to consume new content as soon as it becomes available. To prevent them from completing updates faster than you can produce them, you can use time-gating mechanisms.

For instance, systems like energy or stamina meters, or breaking updates into smaller, periodic chunks released over time, can stretch content consumption. This approach provides ongoing opportunities for users to engage with the game and fosters a longer-term connection, which can lead to increased spending.

Balance free and paid content to engage all users

When releasing new updates, it’s important to create content that appeals to all users and contributes to a large social network for everyone. Free content keeps the community connected and engaged, ensuring that users—regardless of their spending habits—can enjoy and participate in the experience.

Free experiences can also create opportunities for users to explore premium content at their own pace. This is why it’s essential to strike a balance—making all new updates exclusive to monetizing users risks alienating a portion of the user base and reducing overall retention potential.

Roadmaps are a powerful tool to retain users. Highlight both paid and free content, and stick to your release schedule to maintain trust and drive long-term participation.

Maintain a consistent quality for paid DLC—and pay attention to pricing

Paid or premium DLC (downloadable content) typically offers a substantial bundle of new content, such as additional missions, characters or storylines. It often extends the gameplay experience by several hours and represents a significant post-launch revenue opportunity. However, creating and pricing DLC effectively requires careful planning and execution

Assess audience demand and timing

The first step in planning DLC is determining whether there’s enough demand to justify the investment. DLC is most effective when an app’s audience remains active and engaged. According to the account of multiple developers, DLC attach rates vary greatly across titles: being as low as 6% for an indie PC rhythm game, while canny developers who make use of special editions and bundling have reported DLC attach rates as high as 60% following major platform sales. Consider whether targeting this range aligns with your app’s audience and development capabilities, or if other types of content updates might provide better returns for your specific title.

Ensure consistent quality

Maintaining consistent quality across all DLC offerings is critical. Variations in quality often lead to dissatisfaction. For example, in a set of three DLC releases, developers may observe a dip in user satisfaction or review scores for the second installment compared to the first and third. Such gaps can erode user trust, harming future DLC sales or even the perception of the game as a whole.

Price strategically

Pricing DLC appropriately is key to balancing profitability and user satisfaction. For PC and console games, DLC prices typically range from $9.99 to $29.99, depending on the amount of content and gameplay added.

When setting prices, consider whether you are signaling low quality with overly steep discounts. For example, offering a $19.99 DLC for $9.99 is often perceived more favorably than reducing a $9.99 price to $4.99, even if the discount percentage is the same. Additionally, consider sale pricing carefully—users often treat sale prices as the "true" value of the content. Be sure to verify that sale discounts remain sustainable for both your studio and the audience.

Inconsistent DLC quality can erode player trust and negatively impact future sales across a game’s entire content pipeline.

What’s Next?

The previous two articles touched on a variety of strategies and tactics on monetizing through IAP. We touched on the importance of sustainable monetization that balances user value and sentiment with effective monetization strategies. We also explored a variety of topics like buyer health, cosmetics monetization, how content cadence can affect engagement and various pricing strategies.

In the coming months, we’ll continue to expand the Growth Insights Series, diving deeper into the topics discussed today. We’ll explore new areas across user acquisition, engagement tactics, and audience insights specific to the Meta Horizon ecosystem. We’ll also foray into other popular business models like subscriptions and premium across both apps and games.

Our goal is to provide you with actionable strategies to boost retention, drive engagement and build sustainable revenue streams. Stay tuned for upcoming articles that will equip you with tools and best practices for success in the dynamic world of mixed reality and mobile development.

Next up, we will focus on onboarding best practices in mixed reality and in Meta Horizon Worlds. Stay tuned!

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