(In the past I've been on teams working on user motivation and behavioral changes, so I hope the below isn't 100% me talking out of my rear!)
The ad rewards have to be sufficient. I personally hate watching ads, unless the benefit is great enough.
The key is motivation, like for example in the rogue-like card games that are super popular right now, there is a clear path of exp or coins get you something that lets you do better next run, and the grind isn't *bad*, and at first the ads aren't even worth it.
For example, if in a game I need 1000 coins to unlock, and for beating level 1 I get 20 coins, and I am offered to watch an ad to double, I am going to decline. But if after beating level 10, and it may take me a couple days of game play to get that far, and I get 200 coins, and I get an offer to double that if I watch an add well now the ad becomes worth watching.
(I've even seen one game that doesn't even bother to show you an ad offer to respawn after death if you haven't gotten that far in the game relative to your previous best!)
But I am only going to watch those ads if the benefit I get is going to clearly help me see more game content next time.
The card games with unlockables are great at this. Get XP, unlock new cards. The first few levels of XP and card unlocks are easy, But at some point those ad boosts to XP become super valuable to keep up the pace.
FWIW I've only done work on behavioral changes for health and fitness, but the same general ideas apply. If the user is motivated to accomplish something, they will voluntarily take some action they normally wouldn't do (e.g. watch an ad) if it gets them closer to their goal!
And of course if the game is good enough, people will at some point pay to ditch the ads. I have a fair # of games I've paid the $5 to in order to unlock permanent 2x bonuses and ad removals, but it is typically only after a week or more of game play that I bother spending the $.
Void Tyrant, Night of the Full Moon, and Dungeon Tales are all great examples of what I've described above with offering ads for bonuses. Leap On is another game that, besides being remarkably good for a one button game, only has 1 ad offer, to respawn, and an IAP to remove the ad for respawning. Despite being such a simple game, it is addictive, and after ~3 weeks I spent the $2 on IAP.
> Some people i have talked to, liked the possibility to get es much cheaty items as they want,
The items are not cheaty, they are the opposite of cheaty! They are the only way a player to manipulate odds just a little bit in their favor. Making them limited each game means choosing to use them becomes a serious bit of strategy!
(Check out Void Tyrant, it uses an RNG heavy deck of cards draw mechanic. As the player levels up one of the primary things they gain is the ability to nudge that RNG in their favor just a TINY little bit. The game starts off super frustrating, but after gaining a few card value modifiers, it becomes quite nice.)
As an example of why the items are nice, it is likely that during a run an opportunity to use a single value change item to get a 4 of a kind will pop up, but getting to a straight flush requires just the right set of circumstances, and will probably require using more than 1 skill, though I am way too lazy to run the numbers on it. (might be a fun simulation to write though!)
So, if I am given 1 of each modifier, how do I want to use them? If I can watch an ad and get 2 of each modifier, well now all of a sudden getting a really good tower becomes *much* more likely. I can wait out that straight flush, or go for full house pretty early on. If the items are limited, that adds a lot of tension and decision making to the game!
Under the current scheme, if I want to beat my previous best, I need to watch some random # of ads to get modifiers at least equal to what I had last time and I am relying on RNG for the card draws.
That is fun at first, but the strategy is lessened, and all of a sudden starting a new game can mean watching ads for 5 minutes, which will quickly burn through the user's motivation to play, increasing churn.
(I mean right now the game doesn't have enough unlockables to keep up long term gameplay, but you'll be adding those soon enough :) )