Meta x Kwalee: Leveling Up Mobile Gaming with Hybrid Monetization and AI
We might think that trends change fast, and while that’s partly true, some shifts take years to really hit their stride. Take hybridization in gaming: while hybrid casual games were the buzz back in 2019, it’s only now—in 2023 and 2024—that they’re fully coming into their own. Publishers like Kwalee are evolving past hyper-casual to titles that pack in deeper gameplay and longer retention, unlocking new monetization opportunities and signaling an industry-wide push to combine diverse revenue models for optimized engagement and profitability.
To break down these shifts and what’s driving them, Mishka sat down with Manish Gajria, Director of Product Management at Meta, and Ryan Davies, Head of Performance Marketing at Kwalee. Together, they explored what’s fueling the industry’s evolution—from ad spend optimization and AI-driven user acquisition to the rise of hybrid casual games and today’s game-changing creative strategies.
Catch our podcast for an in-depth breakdown of these trends and insights into the future of mobile game marketing, and get your hands on the freshly released Hybridcasual Playbook by Deconstructor of Fun in partnership with Meta.
Value Over Volume
With its vantage point across various app ecosystems—from gaming to e-commerce—Meta has witnessed an industry-wide shift from sheer volume to value-focused user acquisition.
As Manish puts it, today’s app marketers aren’t just hunting for installs—they’re after users who actually drive the app’s growth in a measurable way. These marketers are laser-focused on high-value users, prioritizing quality over quantity and putting every dollar to work. It’s not about budget limitations – it’s about leveraging data and performance metrics to find the right audience and make each acquisition count.
Ryan from Kwalee sees this same trend taking off in gaming. With measurement tools becoming sharper over the years, game marketers are doubling down on value-optimization strategies, often by working closely with networks like Meta to share data and refine their targeting. High-value users are the name of the game now, and campaigns are planned with precision, with long-term payback windows (D30, D60, D180) becoming a standard part of the playbook.
Why Hybrid Monetization Works So Well?
As gaming studios look for resilient revenue streams, hybrid monetization—blending in-app purchases (IAP) with in-app ads (IAA)—has taken center stage.
Manish breaks it down: with hybridization, studios can start monetizing right out of the gate, capturing ad revenue early on and building toward IAP conversions down the line. This setup doesn’t just broaden revenue—it rewrites gameplay flow, encouraging players to engage with ads initially and opening the door for in-game purchases as they progress, creating a smoother, more organic monetization path.
Ryan agrees, but he emphasizes that implementing hybrid monetization is no easy plug-and-play solution. Integrating IAP into traditionally ad-driven games requires rethinking game design and player experience, proving that hybrid monetization demands more than simply adding IAP options. Done right, though, this approach does more than diversify revenue streams—it allows studios to meet a wide range of player preferences, ultimately boosting both engagement and retention.
Hybrid monetization has rapidly become essential in the competitive gaming market, driven by four primary advantages:
Increased Ad Revenue Through Valuable Players
Games with active IAP users bring higher-value ad placements. Advertisers are keen to reach players who spend, which drives up CPMs and ad revenue. Developers can leverage this increased revenue to bid more aggressively on user acquisition, creating a growth loop where new users may either spend directly or engage with ads.Adaptability to Diverse Player Preferences
By blending IAPs with IAAs, studios can cater to a broader range of player preferences. While some players are willing to pay for exclusive content, others prefer progressing through rewarded ads. This adaptability boosts player satisfaction and engagement by allowing users to choose how they want to interact with the game, which in turn enhances retention and lifetime value (LTV).Resilience Against Market Shifts
Hybrid monetization diversifies revenue streams, making games more resilient to market changes like rising user acquisition costs and shifts in privacy policies. With two distinct revenue avenues, studios are less vulnerable to fluctuations in a single source of revenue, creating a more stable financial foundation for the long term.Positive Revenue Cycle
Having both ad-engaged users and spenders creates a feedback loop that increases the quality of engagement. The revenue generated from ads and purchases can be reinvested into acquisition campaigns that bring in even more high-value players, setting up a self-sustaining, scalable revenue model.
The Role of AI in Modern UA and Creative Development
AI is now making its mark across the entire game marketing stack, from user acquisition to creative development, and both Ryan and Manish agree—AI’s role in advertising is just getting started.
Ryan mentions that AI tools like MidJourney and Runway are transforming creative production. Companies are experimenting with AI-driven artists, unlocking a new level of speed and adaptability for campaign output. With these tools, they can pivot faster and produce more relevant, dynamic content.
Automation driven by AI is also reshaping user acquisition. Manish explains that predictive AI is helping marketers strike the right balance between machine-driven efficiency and human insight, optimizing campaigns with fewer guesses and more data-backed moves.
Another big trend Mishka mentions is AI-generated user-generated content (UGC), which makes it easier to personalize and localize ads in a way that feels authentic to each market. Tools like Polday AI give brands an extra edge in engaging audiences on a personal level without requiring endless resources.
Conclusion
Looking toward 2025, it’s clear that hybrid monetization, value-first UA, and AI-driven creative development aren’t just trends—they’re the backbone of mobile gaming’s next evolution. With a mix of IAP and IAA strategies, studios are embracing models that keep players engaged and revenue diversified. As Meta and Kwalee demonstrate, today’s data-sharing partnerships and predictive AI tools make it easier than ever to stay nimble, create relevant campaigns, and target the users that matter.
But beyond the tools and tactics, this industry is still a “weird family,” as Manish puts it. The gaming sector thrives on a unique blend of competition and camaraderie, where studios share insights and challenge each other to innovate. This spirit of collaboration not only fuels sustainable growth but also sets gaming apart as an industry ready to take on whatever comes next.
