This is Part 1 of a 2-part series covering the selling of cosmetics in social mobile F2P games. Here, we provide a quick primer on why you should care about monetizing cosmetics, the various different categories, and the benefits for players and developers. In Part 2, we’ll look at how to nail your cosmetics implementation, production requirements to be aware of, and pitfalls to avoid.
Selling cosmetics is one of the “cleanest” ways to make a billion bucks in the world of mobile F2P, since doing so completely avoids pesky accusations of pay-to-win and the perils of power imbalance.
That’s not to say it’s an easy way to print money, there being huge development costs and challenges to overcome when keeping your cosmetics treadmill spinning at high speed. However, if your game is well-suited to this particular monetization approach, and you can figure out the complexities of cosmetics production, the game’s integrity and gameplay will be left largely untouched, and the rewards to be reaped at the end of the day are enormous.
Whether you’re considering monetizing skins as the core of your game’s business or just utilizing it as a promising supplementary revenue stream, there’s plenty of nuance to explore.
In Part 1, we’ll cover:
- Some data points that highlight why you should really care
- Different types of cosmetics
- The appeal to players
- The benefits to developers
To be clear, when we use the term “cosmetics”, we mean in-game items or status symbols that have no systemic impact and afford no competitive advantage. In short, they’re purely for show.
In the interest of keeping the scope reasonably tight, we’ll focus only on selling cosmetics in the context of PvP/social games, which is where it’s most common and impactful.
Big Figures
What’s the deal with cosmetics anyway? Try these numbers on for size:
Firstly, a study by Qutee found that players are 3 times more likely to consider spending on cosmetics rather than on power, with only 6% stating they would never purchase cosmetics.
Looking globally, a Game Refinery report from 2021 found that decorative skins are utilized in 44% of the top 20% highest-grossing US mobile games and in 77% of the top 20% highest-grossing Chinese games. It’s safe to say this monetization method has found worldwide success.
A Newzoo report from 2020 indicates that 85% of U.S. gamers aged 13 to 45 are aware of in-game cosmetics, 58% of players surveyed have engaged with skins in some capacity, and 39% have paid for them with real currency. The same report estimates that the skin market is worth $40 billion a year in the US alone and that the average big spender drops more than $15 a month on skins.
Newzoo’s report goes on to state that almost 80% of Fortnite’s recent players have engaged with its cosmetics in some way, while a Business of Apps Fortnite-specific analysis indicates that Fortnite’s revenue was $5.8 billion in 2021 — and since it dropped off the App Store/Google Play in 2020, that number doesn’t even include mobile. Admittedly, not all of that spend can be attributed to cosmetics, because Battle Passes and progression acceleration are in the monetization mix as well, but we can safely assume that a significant portion of Fortnite’s revenue stems from a love of looking fancy.
On the whole, these data points paint a picture of cosmetics being relatively well-liked by players as the basis for a lucrative business model that’s highly prevalent in both the East and West.
So that’s cosmetics by the numbers, but what do they actually look like?
Nice Hat
Cosmetics come in many shapes and sizes, and it helps to know exactly how they can manifest in different contexts in order to help understand their appeal. Here, we present a quick overview of the various forms these can take, from most to least common.
Avatar Customization
By far the most popular form of cosmetic implementation is the one that allows players to change the look of their player characters.
MOBAs like Arena of Valor/Honor of Kings embody the simplest expression of this approach, utilizing one-piece, whole-avatar skins.
Fortnite takes a similar but more nuanced approach, with not only skins but pickaxes, back bling, gliders, and trails rounding out the list of choices players can make — and items they can purchase and collect — to personalize their look.
Moving further up the complexity ladder, we find Roblox’s “paper doll” implementation that allows players to modify 30 different separate elements of their characters, including independently altering their left and right limbs. This is one of the most versatile and modular examples of character customisation, enabling the player to put together an effectively infinite variety of avatar appearances.
Dances and Emotes
One of the many phenomena popularized by Fortnite is being able to make your character perform an animation on-command. Dances and emotes are often used by players to show off, generate camaraderie, taunt one another, and even — as we’ll discuss in part 2 — pull off dodgy last-minute wins.
By incorporating spectacularly well-animated emotes, Epic inadvertently created a massive potential for cultural cross-over, not just in the way that characters look like real-world counterparts — and vice versa — but also in the way they move. Every time someone does a “Fortnite dance” IRL, they’re also further cementing the game’s place in popular culture. In that sense, emotes have become a powerful viral promo tool, as well as being a substantial revenue generator.
Other than encouraging countless gamer kids to bust a move in the schoolyard far more often than they otherwise might, Fortnite’s dances are noteworthy for proving so popular that they’ve caused Epic to get in legal trouble on numerous occasions.
Needless to say, dances and emotes have been adopted by many other games since.
Gun Skins, Mods, Effects, and Kill Messages
Gun skins were first propelled into the public eye by Counter-Strike: Global Operations, where — according to skin-trading site DMarket — they constituted 53% of all CS:GO-related purchases made in 2021, comfortably eclipsing all other spend categories combined. They’ve since become widely utilized as a major money-maker for behemoths like Call of Duty Mobile.
Gun skins are particularly appealing and important in the context of first-person shooters, where the camera positioning means that the player’s weapon is clearly visible during regular gameplay, allowing them to conveniently admire their fancy purple firearm.
Players sure do seem to love pimping all aspects of their killing machines, with the most outrageous options including animated skins, novelty attachments, and flashy kill VFX.
Garena’s Free Fire and PUBG Mobile go so far as to give some weapons their own cosmetic progression, allowing players to unlock more and more impressive visual variants as they level it up.
Another way for players to show off the status symbol that is their gun is with flashy custom kill messages that appear as each opponent is eliminated. These are distinct in that every player on the server will see the animated kill message appear, giving them a prestige broadcast quality that publicly celebrates the victor and humiliates the victim.
Gadgets and Toys
These are basically items that serve no purpose other than to be played with, facilitating social interaction and emergent gameplay. They are typically present in social MMO-style games or titles with a zero-combat lobby/hub and are generally consumable.
Free Fire has sporadically incorporated “lobby plants”, which give out currency to a limited number of players who interact with them. While not strictly purposeless, these seasonal props cause a flurry of peaceful, positive social activity in a game that’s otherwise characterized by rampant violence.
Ultra-popular independent Minecraft server Hypixel isn’t a mobile F2P game, yet its monetization of fun-but-useless gadgets is a noteworthy example nonetheless, including trampolines, beach balls, and…poop bombs?!
Pets and Companions
Yet another category of visual augmentation can be found in pets, which is featured in Free Fire.
Although here they can have very modest gameplay impact, it’s arguably the fact that they’re adorable little critters who faithfully follow the player character around that really makes them feel valuable.
Furniture, Objects, and Appliances
Social MMOs like Avakin Life and PK XD have basically built their entire businesses around cosmetics, and — other than the player character’s appearance and available emotes — dollhousing with a vast array of objects is the primary appeal of these games.
Typically, such items exist to do nothing more than look cool and perhaps allow players to interact in a certain way, like a jukebox that enables playing of music. Since “winning” in games like this is arguably about having nice things and signalling your status to other players, you could argue that these cosmetics do have a “pay-to-win” element, but that’s seriously stretching the definition.
Prestige Play
Sure, there are lots of cosmetic options, but why do players even care about them? There are plenty of different motives driving players to purchase skins — let’s explore a few.
Self-expression
The player’s character is an extension of the self in a digital realm. When a game lets the player customize the appearance of their avatar, it gives them an opportunity to recreate themselves inside the game world, allowing them to feel even more at home, more immersed, and more emotionally invested in the game and their character.
Or perhaps players will use the opportunity to project themselves as who they wish they were, tweaking aspects of their appearance, wearing clothes they wish they could afford or feel confident in in real-life, or taking on a completely new persona for role-playing purposes, or just for fun.
If you believe the hype about the metaverse, this kind of virtual self-expression will be a defining characteristic of the digital future. Arguably, the cosmetics monetization methods being utilized in modern games are laying the foundations for decades to come.
Differentiation and Feeling “Special”
Some players buy cosmetics specifically to stand out from the crowd. Anecdotally, it’s not unusual for a player to purchase a new champion in a MOBA and immediately buy a special skin to go with it, just so they don’t look default.
Status, Prestige and Veterancy
This is a big one. From the Fortnite players flexing skins that were only ever available all the way back in Season 1 to the COD Mobile elites rocking gun camos that can only be acquired by 100% completing the battle pass, cosmetics are often about broadcasting to other players just how damn impressive you are.
Whether it’s having spent heavily to acquire something gaudy in an Eastern MMO or topping the leaderboard to snatch a prestigious title, status signalling is very common and highly profitable.
Visual Variety and Aesthetic Appeal
Sometimes people get bored of using the same weapon/character/champion over and over again for months on end, and even the smallest aesthetic change can lead to the experience feeling fresh for a while.
Similarly, sometimes players just love the look of a skin. It doesn’t have to be about peacocking or being “unique”; a player might spend money on a cosmetic simply because they think it’s beautiful.
Social Connection
Peer pressure and running with the pack play a big part in the selling and use of cosmetics, with some skins and guns achieving cult appeal. When all your squadmates gear up as Peely and start dishing out orange justice, you’ll go running to the cosmetics locker to equip them and join in the fun - or you’ll race to the Shop and hope they’re on sale.
Trading in the Marketplace
Some more entrepreneurial players buy and sell cosmetics, with a Newzoo report claiming that — of those who know about skins — 81% want the ability to trade them for real-world money.
Standoff 2, a mobile CS:GO clone, allows players to trade gun skins via the in-game marketplace, while Roblox goes a big step further, facilitating the collection of “limiteds” and enabling players to flog them for actual cash.
Broadly, this bodes well for crypto games incorporating cosmetics, since player trading of assets is basically guaranteed in that context.
Business Bling
It’s all well and good for cosmetics to make players feel warm and fuzzy, but what’s in it for developers? Given the huge development effort required to produce the assets in the first place, why would you adopt skin-selling as a major element of your monetization design? Plenty of reasons, actually. Let’s discuss.
Negligible Balance Impact
As hinted at earlier, one of the greatest benefits of selling cosmetics is it gives you a revenue stream that flows free from the complexity of having to worry about stats and attributes, game balance, orthogonal utility, power creep, and pay-to-win.
Players value what you’re selling not because of how it helps them dominate their opponents, but because it looks cool and makes them feel special. As long as you can keep creating fresh new cosmetics that the audience simply must have in their virtual wardrobe, they’ll keep spending — and at no point will you have to worry about the impact on gameplay.
Note that some hyper-critical analysts argue otherwise, and there have been a handful of instances of cosmetics affording competitive advantage, but the prevailing perspective amongst players is that skins do not equal pay-to-win. Certainly, compared to selling power, the impact is trivial.
Endless Content Options
Assuming you make smart foundational choices about your game’s setting and art style — giving yourself a nice wide aesthetic canvas and a vibrant palette to paint with in the process — the possibilities for creating and selling new cosmetics are effectively limitless.
Obviously, there’s more to it than just adding a few hats — you need to release cosmetics in themed sets, accompanied by meaningful gameplay changes, slick marketing and new narrative beats. But the content treadmill can run more sustainably for much longer when you don’t have to worry about upsetting the balance with each new release.
As mentioned elsewhere, this takes some of the pressure off your game design and product management teams, but you’ll have to work hard to keep the production stars aligning month after month when you factor in live ops roadmapping, art pipelines and outsourcing, licensing efforts, and robust QA.
Marketing Hooks
As mentioned above, every new chunk of cosmetic goodness you add is another excuse to toot the hype train, keeping players glued to your ever-evolving world and giving them another reason to jump back in if they’ve drifted. Tying the visual style of the promotional materials into the aesthetic of the cosmetics themselves is a no-brainer.
IP Tie-ins
It’s hard to find a license that hasn’t popped up in the impossibly expansive Fortniteverse these days, and that points to another strength of monetizing player appearance: who doesn’t want to galavant around the battlefield as their favourite superhero/cartoon character/sports star?
There’s plenty of money to be made from yoinking real-world cultural icons into your video game world, with the added bonus of enabling you to profit from being a marketing vehicle for other media releases while keeping the treadmill turning.
Ideally, you’ve defined the parameters of your digital reality such that the fourth wall doesn’t shatter the moment John Wick arrives and starts firing at Cristiano Ronaldo. This is where the playful setting and stylized aesthetic of Fortnite and Free Fire set them up nicely to have more versatility compared to the “mature” tone of COD Mobile and PUBG Mobile — although it’s safe to say those titles have well and truly jumped the shark, with the latter featuring K-Pop collaborations that are completely at odds with the initial rather vanilla game flavour.
Hyperlocalized Cultural Targeting
With cosmetics as your monetization engine, you’re well-equipped to cater to the cultural preferences of specific regions. By creating content that appeals directly to local tastes, not only will players feel like you “get them,” but you also give yourself another real-world event to hook into as a marketing moment.
Again, this is not at all a cheap or simple development endeavour. Having per-region teams with their ears to the ground, able to contribute to the cosmetics production pipeline, won’t be viable for most studios, and the scale of player base required to make this model profitable is also a major factor. Nonetheless, the staggering success of Free Fire highlights the extreme spoils to be had if your audience and art teams are sufficiently large to make hyperlocalization work.
Game Within The Game
Here, we’re talking about players using cosmetics to come up with their own emergent gameplay within the wider framework of the experience you provide. For example, players might develop a culture of gesturing to one another using a specific emote before doing battle, or perhaps a group of players will get together and have a “party” using the “toys” described earlier.
Players of Fortnite’s Creative Mode have routinely run their own fashion shows, setting themes and providing judges to determine the victor. Without a wide array of cosmetic choices available, this wouldn’t be possible, and the fact that it is possible serves to gratify each player’s investment in their wardrobe.
In short: if you give players tools to make their own fun and you charge for access to the toys, then everyone wins.
All up, there are a multitude of reasons why making cosmetics a part of your business can be a very strong choice - although, as with any product decision, it’s not without its prerequisites and downsides. Do you have the development muscle required to generate the content? Would selling skins even work in your game? How do you support the cosmetics production efforts with smart meta and UX design? What pitfalls lurk on the path to profit…?
Stay tuned for Part 2, where we’ll cover how to nail your cosmetics economy, how to avoid screwing it up, and which game designs fit the model best!
A big thanks to Thomas Baker for writing this essay. If Naavik can be of help as you build or fund games, please reach out.
