Established in 1994, JOYCITY is one of South Korea’s best-known game studios. It was a pioneer in online sports games, including its Freestyle street basketball series, until it began developing mobile game apps in 2011. Since then, its focus has been on popular strategy titles like Pirates of the Caribbean: Tides of War and Gunship Battle: Total Warfare. Today, JOYCITY has more than 500K daily active users (DAU) across all its live game apps.
Until 2016, the studio had relied on in-app purchases (IAP) for revenue and wanted to explore ways to diversify its earnings. It experimented with ads, but at the time had not found the optimal balance of ad format performance and quality user experience. Overall, IAP accounted for more than 95% of its total revenue.
In 2020, JOYCITY decided to reevaluate its hybrid monetization strategy when IAP revenue began to drop off in some markets. The studio was seeing a growing number of developers using rewarded ads alongside IAP in strategy games. To do the same, JOYCITY needed it to be easy for its small team to handle in order to avoid any interruptions to its IAP business, which was its core focus.
With ease of implementation top of mind, JOYCITY decided to adopt AdMob and integrate it into its top two titles. After adding bidding in 2021, JoyCity grew ad revenue more than 200% in one year and improved non-paying user retention by 30% in key markets. IAA now accounts for 10% of JOYCITY’s total revenue. With this success, it added two full-time staff members to manage its IAA business and plans to integrate ads alongside IAP in its upcoming titles.
Balancing IAP-heavy game with in-app ads
Even with its worldwide success in 2019, JOYCITY was looking for ways to diversify its revenue and improve non-paying user retention and lifetime value (LTV). It was optimistic that in-app ads could be a solution, but was uncertain if IAA would negatively impact player experience. When it conducted experiments with ad formats, the team encountered some performance issues and decided to continue to focus on its IAP offerings and strategy.
Creating a new revenue stream
By 2020, JOYCITY began to see a dip in IAP revenue in two of its most popular titles in some markets. It speculated that the price point for many in-game items in those markets exceeded what players were willing to spend. Sujin Kim, Marketing Team Lead, was ready to give in-app ads another try. Kim had confidence that with the right ad formats and placements in game, JOYCITY could create a new revenue stream and retain non-paying users, all without disrupting IAP earnings or diminishing the game experience.
After researching platform options, JOYCITY decided to partner with Google AdMob. AdMob was by far the easiest to integrate, and its user interface was the most intuitive. The studio was eager to try rewarded ads bidding and other features like Ad Inspector to test third-party network’s ad serving status in real-time without needing help from its development team.
Our biggest consideration for choosing AdMob was ease of implementation,” said Junki Min, Ads Monetization Manager. Since most of our revenue comes from IAP, we needed an IAA solution that would require minimal resources to set up. AdMob turned out to be exactly the right solution for us.”
Bidding doubles IAA revenue and improves retention
After adopting AdMob and a hybrid ad strategy in 2020, JOYCITY created a new income stream where ad revenue increased from 5% to 10% of its total earnings. With the addition of bidding in 2021, it doubled IAA revenue.
This is purely new revenue,” said Junki Min. “It’s on top of what we saw with in-app purchases.”
Rewarded ads proved to be a high-performing format among both paying and non-paying users. According to JOYCITY, users who watched rewarded ads had double the day 1, day 7, and day 30 retention rate compared to users who didn’t watch ads. Paying users who watched rewarded ads had the greatest increase in retention rate — up to 53% on day 30. Non-paying users had a 12% increase in day 30 retention rate.
JOYCITY found that in-app ads positively impacted user LTV, especially among new users to its games. For this group, ads accounted for 20% of D14 LTV. Data insights revealed that without in-app ad revenue, 20% to 40% of user LTV by D14 would be zero.
The team also found a strong correlation between ads and user engagement. On average, new players that watched rewarded ads completed the beginning levels of games three days faster than new players who did not watch the ads.
JOYCITY said a hybrid IAA and IAP strategy has become an integral part of its business model. Before 2020, the company had one person working part-time on IAA. It has now expanded that to two full-time positions in addition to those dedicated to its IAP business.
In-app ads are a great new revenue stream,'' said Sujin Kim. It is very hard to find a way to improve user retention in the games, and rewarded ads are a really good way to do that.”
