Transition to IAP monetization in hyper-casual and its impact on gameplay
State.io, the hyper-casual strategy game, has been live for over four years. Despite its simple core loop, it still brings in a solid monthly income, especially for a game with minimal depth. But things are about to change. The team is now focused on overhauling the project: deepening gameplay, adding a real meta, and even introducing PvP. The idea is to gradually shift the game away from pure hyper-casual and toward a hybrid model, where a growing share of revenue comes not from ads, but from in-app purchases.
Over the past six months, we’ve been experimenting with meta features — dailies, weeklies, joint progression mechanics. We’ve also introduced generals: special units with unique abilities and cooldowns, giving the core loop new tactical options.
At the same time, we completely redesigned the old UI, which was looking a bit outdated. The new interface is cleaner, more modern, and cuts down the number of screens between levels. These UX improvements alone gave us a strong +20% boost in LTV.
Even though the game isn’t new, it still performs well — R1 remains stable around 40%. And most importantly, profits are holding steady.
But now, the main challenge is to shift monetization away from ads and toward IAPs.
Right now, only about 5% of revenue comes from IAPs, and most of that is just “no ads” purchases. That’s clearly not enough.
Gameplay changes
Despite hybrids being the latest trend, State.io’s core gameplay — simple and snappy — still hooks players. But that simplicity also limits the game’s potential for IAPs. The problem is this: the core loop doesn’t generate complex enough situations that would justify paid solutions.
One idea we’re exploring is slowing down the gameplay slightly to introduce more tactical variety and break up dominant strategies. That would open the door to new mechanics, new units, and more monetization touchpoints without damaging what players love about the game. And that’s exactly what IAPs thrive on — giving players interesting, optional tools for solving difficult problems.
It’s a tricky balance. When your core loop works well, it can be scary to mess with it. But the reality is, ad-based monetization just isn’t as viable in the long term. IAPs offer more stability and more control over user acquisition. Even if we lose part of the hyper-casual audience and traffic gets pricier, it’s still a smarter, more sustainable path forward.
Besides, games where IAPs drive revenue also tend to have longer lifespans than the ones that survive on ads. They’re less vulnerable to market shocks, like the COVID boom and the drop-off afterward. With IAPs, your main variable becomes acquisition costs, not the volatility of ad CPMs. That’s a much better risk profile.
Of course, you can’t just bolt IAPs onto an old game. The gameplay needs to support it with depth.
Originally, State.io was designed for an extremely broad audience — not just hyper-casual players, but anyone with a phone. The idea was: even someone who’s never played a mobile game should understand what to do right away. That limited how deep we could go with level design and core mechanics. And now, that simplicity is holding us back.
If there’s only one clear way to play, there’s no room to offer alternative, paid paths. No meaningful choices = no meaningful monetization.
In older games, paywalls were the go-to: want to keep playing? Pay up. Today, that’s no longer acceptable. Players want to play how they want, and IAPs are there to enhance the fun with boosters, shortcuts, or new tools. The key challenge is to design core gameplay that supports multiple viable paths to success. That way, in-apps become a meaningful choice, not a requirement. Once that’s in place, you can build out LiveOps, events, calendars, and other systems on top of that flexible foundation.
The goal now is to evolve the game from hyper-casual to casual, with a hybrid-casual phase in between.
Adding depth to the game
It starts with creating new gameplay situations. Generals were a step in that direction, but so far, they haven’t made a huge impact. Why? Because they solve problems that don’t really exist yet. Players weren’t struggling to beat levels, so offering a better way to win didn’t feel meaningful.
What we need to do now is introduce actual challenges that require different strategies to overcome.
Take walls, for example — physical barriers on the map that require special tactics to bypass. Or key control points that must be captured to win a round.
And it’s not just about making the game harder, difficulty can be ramped up in a pretty basic way by simply boosting enemy AI. What we’re aiming for is strategic complexity: new kinds of gameplay situations that naturally create more challenge. Then we can introduce tools (like generals) that give players creative, effective ways to handle those new scenarios.
Let’s go back to walls. Once they’re in the game, players suddenly have more options. Do you brute-force the wall with sheer numbers? Use a special unit to blow it up? Or hang back and wait for the enemy to make the first move? This kind of decision-making adds layers of strategic depth, and with that, the opportunity to introduce “fun” extras. For instance, players might choose to buy a general who trains demolition units. These units could be used not just to breach walls, but also to disrupt the enemy directly. That kind of flexibility adds juice and tactile feedback to the gameplay.
By introducing more strategic complexity, we create room for players to shape their own approach. And if they want to streamline or spice up their experience, they can — by making a purchase that gives them the tools they enjoy most.
We’ve already tested full PvP in the web version of the game, and bringing that to mobile is another potential path for adding long-term depth and increasing the value of in-app purchases. But the first step is building a more complex core, only then can we layer in systems like LiveOps, meta, and deeper monetization.