Direct-to-consumer sales (D2C) – the new standard in game monetization

Let's explore together with Xsolla what direct sales are, how the mobile gaming market has arrived at this point now, and why they demand adaptation from both developers and users.

The material was prepared by Pavel Savkin, Product Director (Monetization) at Xsolla.

Pavel Savkin

What are direct sales?

Direct sales (direct-to-consumer or D2C) is a model where the developer interacts directly with the player, bypassing intermediaries such as the App Store or Google Play.

Saying "direct sales" implies owning communication channels, full control over the user experience, and flexibility in monetization. Therefore, D2C as a phenomenon is inseparably linked with web shops (Web Shops).

A web shop is an in-game store taken outside; essentially, an IAP showcase from which a player can purchase directly from the game developer. Usually, it is more cost-effective since the Apple and Google commissions are not included in the web shop prices.

Example of a web shop in STAR TREK TIMELINES

What's wrong with the traditional sales model?

To understand why we are discussing direct sales, we need to talk about what the "traditional model" is.

Until recently, this model on the mobile market was reduced to the following scheme:

• find a successful game mechanic;
• purchase traffic at a reasonable price;
• scale via IAP monetization;
• collect profit.

Nowadays, this model no longer works. We won't delve deep into the reasons. In short, the platforms themselves are the culprits, having abandoned helping users find new content in favor of supporting the obvious market leaders.

The situation has resulted in the following:

• user acquisition cost has skyrocketed and continues to rise;
• advertising campaigns' effectiveness has dropped after tracking restrictions (ATT, GDPR);
• visibility and discoverability on the two main mobile platforms — App Store and Google Play — have worsened;
• it's nearly impossible for new games to pay off regardless of their quality.

Surviving under these conditions has become extremely difficult for mobile game developers. Additionally, the situation is complicated by restrictions on using alternative monetization channels.

For instance, there was a ban on mentioning alternative payment methods within the app and using push notifications to inform users about special offers outside the platform.

Therefore, developers spent money acquiring audiences on the App Store and Google Play, only to be denied rights to attempt collecting revenue from them using external tools.

This led to a scenario where studios stopped earning due to the damaging policies of key app stores, and simultaneously, these stores prohibited studios from finding solutions, under threat of being blocked.

Nothing could be done about it. Consequently, numerous developers began successfully transitioning to web and PC, where they found opportunities to:

• manage sales channels and user data;
• determine prices, offers, and payment methods independently;
• decide when and how to bring players back.

But the situation has started to change rapidly.

Heroes Wars — an illustrative example of a title that launched a separate web version

How have developers got the chance to break away from the traditional model?

This happened due to the attention given to monopoly issues by government regulators worldwide.

In the United States, a court compelled Apple to allow developers to inform users about external payment methods.
In the European Union, according to the Digital Markets Act (DMA), Apple and Google are required to open their ecosystems to third-party stores and payments.
In South Korea, a law prohibiting monopoly on payment systems in stores was passed and then strengthened, requiring platforms to be more open.

Similar measures may also be introduced in Japan, India, Brazil, Australia, and even in China, where local studios likewise strive for greater independence from platforms.

Despite these shifts, the App Store and Google Play themselves are unlikely to change. However, developers, long bound to their ecosystems, now have the opportunity to effectively monetize their products — including legally placing a link to their web shop within the game.

This is a global shift, comparable in scale to the emergence of freemium models. As before, those who adapt themselves and their audiences earlier than others will benefit.

The Fortnite store, where Epic Games placed links to external payment systems, and its ensuing lengthy legal battle became a catalyst for the shift to D2C

What's the deal with adaptation, and what do direct sales change?

The transition to direct payments is a profound cultural and behavioral shift.

Players have been accustomed for years to a single pattern: all purchases within the game, in two clicks, without extra steps. The platform trained them for complete seamlessness and control.

Direct payments via web shops, the emergence of links and external pages are a new user experience, causing many to have:

• concerns: "Is this safe?";
• doubt: "Will I definitely receive my purchase in the game?";
• laziness: "Why do I have to go to a browser and take extra steps?";
• distrust: "Could this be a workaround or scam?".

To minimize the effect of these doubts, audiences need to be prepared in advance.

In the future, we will discuss exactly how to do this, but for now, let's note that direct sales are not just a payment method. They are the foundation for the growth of a new model. Through it, teams can build a strong, manageable connection with their audience.

Those who are already preparing their audience for a global change in user experience by creating new offers and learning scenarios will gain a competitive advantage. They will be able to experiment faster, gather more data, reduce commissions, and strengthen their connection with users.