Monetizr – in which the Alfabeat invested – is an American company established in Latvia, which enables game publishers to increase their income and diversify it. After implementing the solution in their application, publishers can now sell high-quality products associated with it in-game, therefore increasing ARPU (average revenue per user) by up to 25%. Monetizr also plans to introduce universal currency for players that will be based on blockchain.
Monetizr wants to devote funds obtained from Alfabeat for to the development of the API solution, which aims to use machine learning methods to measure the involvement of players in mobile games. Monetizr is planning to identify so-called driving factors, which are emotional triggers for players. Collecting data about players’ behavior and using machine learning, they want to increase conversion rates.
– We have invested in Monetizr because it has an experienced and motivated team focused on global development. The product fills a certain gap – even now it motivates the user to become more involved in the game – says Bartosz Lipnicki, Managing Partner of Alfabeat.
What does the current business model look like? Limited collections related to the game are sold for a certain amount. After deducting their production costs, profits are divided in half. For example – the cost of producing a T-shirt, sold for $20 is $10. After deducting this amount, both the game publisher and Monetizr receive $5. Similarly, the profit from advertising in games is shared. Advertisers pay the publisher for certain player’s behavior – clicking, displaying or switching to the brand’s website, and income from Monetizr ads is divided in half with the studio that created the game.
The creators of the solutions estimate that there are currently 100,000 games in the world that can boast of at least one million active users per month (MAU) and can enter into partnership with them. Monetizr hopes to cooperate with 10 percent of them. The average annual profit from both sources – i.e. from sales from the game level and from advertisements – is about 470,000 USD per game, to be shared between the publisher and the service.
– Ultimately Monetizr wants to introduce a common, universal currency for players, which will allow them to collect tokens for their time, skills and money spent in one game and spend them in another. This will be a real revolution in the gaming market – emphasizes Bartosz Lipnicki from Alfabeat.
Currently, over 2 billion players in the world spend over $50 billion to purchase currencies used in mobile games. Products and services purchased there have no value beyond the digital world. Monetizr wants to change this and respond to the challenge of not being able to transfer digital currencies between games.
Play and earn money
Currently, thanks to Monetizr, players receive rewards for time spent on gaming and points earned, which in turn makes them pay more attention. When they reach the appropriate level in the game – they have, for example, the opportunity to purchase strictly limited items associated with it. For example – people playing an NBA simulator can buy a shirt of a particular team. Leotards are not only a valuable bonus, they are also a unique trophy, which users can brag about in real life.
On the other hand, brands cooperating with Monetizr can reach a user group with targeted advertising – tailored to the recipients and the game’s story and profiled according to their interests, location, purchase history at the game level and other behaviors.
Monetizr increases the conversion rate by as much as 10.6 percent and so-called average revenue per user by up to 25 percent. The solution is already used by over 30 game studios, and that gives the opportunity to reach around 17 million players.
The growing market
According to Newzoo data the global gaming market will reach over 180 billion dollars in 2021. Only in Poland, the gaming industry is valued at around $520 million (2 billion PLN). This may indicate the potential of the solution proposed by the Latvian platform.
Monetizr has gone through acceleration process at Techstars in the United States. From the very beginning, the company operated globally. The team members participated in five exits and have many years of experience in the gaming market.