Mobile gaming industry overview
Online mobile gaming industry - analysis, trends, and statistics
Gaming, and mobile gaming in particular, continued to rule the entertainment industry in 2022. Newzoo reports the global gaming market generated $184.4B in revenue, half ($92.2B) coming from mobile gaming alone in 2022. To put that into perspective, it’s more than triple the combined annual revenue of the global box office and all music subscription streaming services, which generated $26bn and an expected $27.24bn in 2022 respectively.
Mobile game industry statistics
- data.ai reports consumers spent an average of 5 hours per day on their mobile devices - one-third of all waking hours and a YoY increase of 3%
- data.ai reports consumers spent $110B on mobile games
- data.ai reports mobile app downloads reached nearly 255B, with 90B being mobile game downloads
- Statista reports that in Q3 2022 Android users had 3.55 million apps to choose from in the Google Play Store and iOS users had access to 1.6 million apps in the App Store
- Statista predicts that by the year 2025 ad spend in the mobile game market will reach $130.8B
The mobile game market
Data.ai shows that hyper-casual continues to be the number one downloaded game genre worldwide with 17.5B downloads in 2022 - despite its end being predicted for as long as the genre has existed. The simulation and puzzle genres took the second and third top slots respectively, with simulation breaking the 10B downloads mark.
China continues to be the world’s largest market for games. According to Adjust, APAC experienced the largest growth globally in consumer spending between Q1 2021 to Q2 2022 - but it was developers headquartered in China that were able to enjoy it most, driving 33% of total consumer game spend for the region. However, with almost no new game licenses issued until the end of 2022, only domestic developers were able to take advantage of China’s appetite. The embargo on foreign games was finally lifted in December 2022, ending the effective 18-month-long ban on new imported titles and now giving developers based outside of China a chance to enter the market.
Trending mobile games in 2022
According to data.ai, these were the top mobile games in the US by downloads in 2022:
- ROBLOX (Roblox Corporation)
- Subway Surfers (Kiloo, Sybo)
- Stumble Guys (Kitka Games)
- Wordle by Goldfinch (Goldfinch Studios)
- Count Masters (Free Play LLC)
- Among Us! (InnerSloth LLC, PlayEveryWare)
- Parking Jam 3D (Popcore Games)
- Fishdom: Deep Dive (Playrix)
- Survivor.io (HABBY PTE. LTD.)
- Call of Duty: Mobile (Activision, TiMi Studio Group, Tencent Games)
Mobile gaming industry analysis and trends in 2023
All indications point to 2023 being another eventful and demanding year for mobile gaming businesses. Opportunities are there for savvy app marketers who can take advantage of the trends in the new year - short-form video continues to be a way for marketers to reach massive audiences, AI is making game design faster and more polished, and player ownership offers developers more ways to monetize their games. Let’s dive deeper into the trends that should be a part of your strategy in 2023.
1. Short-form video is here to stay
There’s no doubt that 2022 was the year of short-form video. Behind this trend were social media platforms, namely TikTok, Instagram, and YouTube, focusing firmly on making media shorter, snappier, and increasingly snackable.
This trend had a major influence on the ad creative space, with ads being pushed to condense their messaging into even smaller and tighter windows. 2023 will likely see this trend continue to dominate how users consume both content and creatives.
For game marketers, this means it'll be more important than ever to grab the attention of users as quickly as possible. So far, we’ve seen creative teams use humor, gross-out, sound, and real actors to get even a few seconds of user attention. In 2023 we’ll only see attention spans shrink further and with them, the chance creative teams have to convert. The best teams will find ways to use these constraints to their advantage, leveraging even more innovative means to get and keep users’ attention.
2. AI is coming, but not for your job
AI has been on the brink of mainstream adoption for a while now, and with the launch of ChatGPT, we may have finally reached the tipping point.
Up until now in the mobile gaming industry, the effects of AI have been mostly felt in creatives, where the use of AI image generators like Midjourney, DALL-E, and Stable Diffusion have become more common. That being said, there’s still a long way to go before AI can replace the creative team, or even get close.
Where AI is making its biggest splash is in the ideation and design of mobile games. It’s early days yet, but the potential is undeniable as developers now have an endless spring of new ideas only a prompt away.
For 2023, this means even more polished titles - with less time needed for ideation and design, more time can be spent on prototyping. Small studios will be able to stay lean, even as they scale, and larger studios can make themselves even more efficient as resources that would be spent on dialogue, decision trees, interfaces, and calculating physics can be outsourced to AI. But, this doesn’t mean the end of the human team, only that their time will be more impactful as their workload is reduced.
3. The latest evolution of F2P: Play & Own
Free-to-Play has gone through many evolutions since the early days of Flappy Bird, with the latest being the rise of Play & Own (P&O) on the horizon for 2023. P&O allows players to not only play the games they want for free but also own the assets that they purchase or are awarded within the game.
All this is made possible through player ownership - an innovation that enables players to manage, sell, rent, and trade their game assets on secondary markets. For developers and users alike this represents a significant boost in value: users will be able to use their assets across titles and trade them to other users once they’re done, transforming their IAPs from expenses to assets. Developers will get new ways to monetize their games through royalties, stronger communities, longer playing users, and more room to scale.
What this translates to in 2023 is an exciting new way to play, make, and monetize games.
4. More IAP-first games will leverage ad monetization from the start
With players’ budgets getting tighter, 2023 will be harder for developers to monetize through in-app purchases. For many developers, this requires a shift from relying on IAPs as the primary method for monetization.
This means seeking out new ways to monetize, like player ownership and in-app advertising. Looking back at 2022, ad engagement rose according to ironSource data - especially in games that typically used IAP as their primary monetization method. In 2023, there will very likely be a sharp uptick in the use of ads.
The most popular method will likely be a mixed monetization model, where developers can leverage rewarded video together with offerwalls. This allows them to reward users with in-game benefits in return for completing tasks - both are essentially transactional, but instead of users paying with money they may not have, they can pay with their time. For users, this means a chance to get premium content even when there’s little to spare in their budgets. For developers, it means being able to monetize and grow despite tough economic conditions.
5. IPs will be a bigger part of developers’ UA strategy
Developers will increasingly depend on IPs for their marketing and UA in 2023. The ultra-competitive and mature market will mean studios and the games they create have to set themselves apart to survive. With established fanbases and widespread name recognition, IPs are one of the most effective ways for developers to differentiate their games - drawing interest and helping to acquire the users developers want using franchise power.
On top of that, the effects of ATT and IDFA have meant reaching target audiences is harder than ever before, but, by leveraging the fandoms of well-known and liked IPs, developers can still reach the audiences their games were made for. Those doing it best will match their genre to appropriate IPs and through association bring in the audiences they want.
6. The year of ad refinement
If 2022 was the year of experimentation for creatives, 2023 is the year of refinement. As user acquisition teams pushed the boundaries of what is and isn’t acceptable in the last year, users became increasingly sensitive to creatives that were in bad taste.
Fun is not the only priority for users, many want to ensure that the games they play and the ads they consume meet their ethical standards. Regardless of how effective a creative may be if it uses harmful messaging, it’ll turn users away.
In 2023, developers need to be even more careful that the creatives they use and the ads they show aren’t offensive or deceptive. While experimentation and boundary-pushing are good for finding what works, refinement and ad quality will be increasingly necessary for the success of your title, whether you’re on the developer or advertiser side.