Designing a Virtual Economy for App Monetization

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App monetization can be done through various strategies, but a specific approach is required to do so.

Adding revenue to your business through in-app advertising can be a double-edged sword. On one hand, you can maximize your revenue and improve cash flow, but you also risk ruining the user experience.

To avoid this, you need to have a well-designed virtual economy. So what is a virtual economy and what are the key factors to make it successful?

What is a Virtual Economy?

Virtual economies are the summation of all value-generating components of your app. Key components include app currency, experience point systems, progression paths, etc. They help determine the value of each exchange within the environment you’ve created.

Does this sound a lot like a game? You’re not wrong, virtual economies are usually associated with gaming apps, but they are also present in many other apps that use a gamified approach. For example, the e-learning giant Duolingo has a gamified approach to keep users engaged and satisfied with their progress.

Designing a Virtual Economy

The goal here is simple: improving user experience while maximizing monetization opportunities, it’s all a matter of balance. So how do you achieve this?

Build around your users

Your users are the base of your virtual economy, so it makes sense to start your process at the core of your business.

First of all, understand what types of users your app is catering to. For example, social media apps usually only have one type, Revlum has two types of users (advertisers & publishers), and games can have multiple types. This will be key for identifying how users will engage with your app and what value will be offered to them.

Next, identify the actions that your users can take within your app. For example, Duolingo users can: learn a new language, take a new lesson, practice old lessons, add friends, edit their profile, and so on. Once you know all the actions, you should understand the interactions between them. Are there prerequisites to certain actions? Are some actions interdependent?

Identify value-generating actions

Now that you know the actions your users can take within your app, identify which actions bring the most value to them and to you. This will help you assign economic value to those actions and set the base for your virtual economy.

So how do you effectively measure value? The key parameter to look for is the likelihood of a user engaging with a certain action. If you do this right, you’ll be able to make data-driven decisions in the future and maximize monetization opportunities for your app.

Consider inflation

Just like real-world economies, your virtual one can also suffer from inflation and other economic effects. With virtual economies, the inflation issue is much bigger because the amount of currency is limitless.

To build a successful virtual economy in an app, it is important to find a balance between actions that allow users to acquire more currency and those that filter currency away from the user. This can be achieved by optimizing the actions that filter currency out of the economy, that are not necessarily related to progression and accomplishment.

For example, offering personalization options or allowing users to purchase additional features. To improve performance and combat inflation in the virtual economy, consider human behavior and what users may be willing to splurge on in a virtual world.

Next steps

Implementing a virtual economy can increase your monetization opportunities and improve user experience. There are many monetization strategies that can be used to boost your virtual economy, and offerwalls are definitely our favorite pick.

If you’re ready to increase your revenue and improve your cash flows, contact us & let’s talk strategy!


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A hiking enthusiast with a knack for tech, I blend my adventures in nature with the digital world. Dive into my writings, where trails meet tales and pixels spark passion.


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