Tips for Monetizing In-App Purchases on Horizon

Welcome to the Growth Insights Series, a new series designed to help you drive engagement, retention, and monetization in the Meta Horizon ecosystem. This collection of articles empowers you, as a developer who wants to get the most out of monetizing your app on the Meta Horizon Store, with effective strategies to create sustainable experiences that keep users engaged.

This article offers practical strategies and real-world examples to help you design sustainable monetization strategies. We will highlight effective tactics and identify pitfalls to generate more revenue while also balancing for player value. The article is divided into two parts—today, we’ll cover effective ways to frame and plan IAP monetization. In part 2, coming in March, we will deep dive into execution tactics.

In this article, we’ll explore monetization mechanics designed to help you create long-term revenue. While these insights address various game types, not all tactics may apply to your specific project. Choose approaches that naturally align with your game’s existing progression and reward structure.

Finally, this is our first article. We’re hoping to learn about what works and what doesn’t and iterate accordingly. In the meantime, let’s get started!

Monetization requires thoughtful planning and a mix of strategies to succeed. We’ll focus on practical tips for monetizing users through In-App Purchases (IAPs) in free-to-play games and premium games, tailored to the unique dynamics of the Meta Horizon ecosystem.

While premium game purchases still make up the biggest share of spending, IAPs have emerged as the fastest growing revenue stream on the Horizon platform. In the past two years, IAPs have seen substantial growth, especially among immersive titles (AR, VR, MR, and XR experiences that transport users into interactive 3D environments). This is also reflected in the fact that we’re seeing a significant shift in time spent on free-to-play apps on the platform.

Apps naturally lose users over time, a process known as churn. Creating experiences that keep users coming back must happen before monetization can thrive. Successful monetization depends on two key factors:

It's critical to balance monetization against a player-first philosophy. Development teams that build long lasting successful businesses first focus on player value, then implement strategies that monetize effectively.

We now introduce monetization methods commonly used in free-to-play, subscription, and premium Live Service games to help you explore strategies that align with your content.

An effective monetization strategy prioritizes buyer health—a term that refers to the overall behavior of your app’s paying users. Buyers, defined as users who have converted at least once by making a purchase, are not only a key revenue source but also some of the most loyal and engaged users.

In many free-to-play games, the success of monetization is linked to the number of active buyers or the rate at which new buyers are converting. This is often referred to as the monetization breadth of a title.

Two key metrics are helpful in measuring this breadth:

For example, if your buyer conversion rate increases, it means more users are trying out your in-game purchases. If ARPU rises alongside this, it suggests that more users are spending and also see the value in spending more.

Monetization depth focuses on the revenue generated from existing buyers. Metrics such as average revenue per paying user (ARPPU) and average transaction size give insight into spending patterns. While depth is important, relying too heavily on existing buyers can expose your title to risk if high-value buyers churn.

Maintaining a strategy focused on growing your buyer pool is critical for long-term success. By consistently adding new buyers, you reduce the impact of losing high-value buyers and create a more resilient monetization model.

Here are some actionable strategies for growing your buyer pool:

Cosmetic-based monetization allows users to express themselves by showcasing their skill, status, and identity, with its value significantly amplified in games with large social networks. This approach revolves around customization options like clothing, pets, emotes, and emojis. These items, often referred to as “durable” purchases, are typically one-time buys with higher development costs.

Cosmetic-based monetization works well for games with competitive elements, especially when developers want to maintain fairness. In most in-game contexts, consumables (items that are purchased, used, and are not available for re-use unless purchased again) generally have better conversion rates than durable items. Consumables encourage repeat purchases, while durables provide long-term value.

You can leverage consumables in gameplay to drive repeat purchases, and focus on durable items in curated storefronts.

Cosmetic items serve deeper purposes beyond aesthetics. They foster social identity, express community membership, and showcase status. To maximize their value, consider the strategies listed below.

Successful cosmetic design addresses multiple player motivations:

Cosmetics gain more value when visible to others. A cosmetic that only the player sees has less impact than one that can be admired by friends or strangers.

To amplify cosmetics’ appeal, incorporate their visibility into key game systems:

When users see an attractive cosmetic, they should have a clear path to purchase:

Pay-for-utility systems allow players to purchase items or boosts that enhance their in-game experience by providing power, faster progress, or relief from restrictions. These purchases are often consumable, encouraging players to make multiple purchases. While this approach can increase revenue, it’s crucial to ensure it doesn’t make spending feel like the only viable way to progress.

Consumable utility items are generally low-cost to develop and affordable for players, making them an effective entry point for monetization. However:

Highly monetized games succeed by offering players diverse progression paths. Games with strong progression paths give players the feeling that they are consistently improving. Adding multiple paths reinforces this feeling and positively impacts retention and monetization.

For example, if players can pay to speed up progress on a building, they’re often given multiple buildings to choose from, along with other systems that allow similar shortcuts. This creates a broader monetization framework while keeping players engaged, giving them more chances to invest in their progress.

In addition to variety, games should incorporate deep progression paths that encourage repeated investments in specific aspects of gameplay. Well-designed systems offer multiple opportunities for players to spend as they work to improve their progress or performance.

For example, in Asgard’s Wrath 2, players encounter a multi-layered crafting system where weapons and armor can be upgraded through 6 distinct tiers, each requiring increasingly rare materials gathered across multiple worlds.

Many games thrive by adopting a hybrid monetization strategy that combines cosmetic purchases with utility-based items. This approach creates a more resilient in-game economy. For example, Hero Collection games feature durable purchases like characters, weapons, or seasonal skins. These games add value by letting players strengthen these items through repeat purchases, creating a consumable element within a durable product.

Consumables that are bought over the course of multiple transactions often result in higher spending over time than a single durable item. This approach increases spending potential and keeps players engaged with ongoing opportunities to advance their progress.

Many games leverage limited-time events to focus player engagement during a set time period. This can have a positive impact on retention, giving players a reason to come back regardless of their game progression.

For example, battle passes offer rewards over a set period, typically bundling exclusive cosmetics, utility items, and experience boosts at price points between $4.99 and $14.99 USD. They tie engagement and monetization directly together, supporting a symbiotic relationship between playing and spending while offering incredible value to the user.

However, implementing a battle pass system comes with challenges:

Before launching a battle pass system, ensure your team has the resources to support consistent and compelling updates across multiple months.

Variable rewards, or chance-based rewards, introduce unpredictability by offering chances to obtain hard-to-get items, often mixed with common rewards. Compared to direct purchases, variable rewards may take longer to collect, naturally extending player engagement and increasing spending potential.

When implementing variable rewards, consider the following best practices:

When implementing a subscription-based model, focus on maximizing quality time spent in-app to communicate the value of the ongoing cost. Subscriptions demand that every moment feels valuable and engaging, fostering habitual play to keep users subscribed.

This means implementing features that make every session meaningful and rewarding. Your strategies to achieve this goal will vary depending on the model.

The goal is to ensure consistent daily engagement, as access to the game itself is the subscription’s core value:

For subscription-optional games, the focus shifts to adding significant value that enhances the player experience:

The second part of this article will come soon in March. In part 2, we will deep dive into execution tactics.