About ten years ago, the rise of smartphones automatically led to an explosion in the income of mobile game developers. And so far, mobile gaming is still considered a very thriving industry, with impressive growth every year.
But everything has an end. And in 2022, revenues generated by mobile video games would drop for the first time.
A decline after excellent performances in 2020 and 2021
This is at least what is revealed by an article published this week by the Financial Times, which relays information from Newzoo, a company specializing in the collection of data on video games. After crossing the $100 billion mark, mobile game revenues in 2022 would be down 6.4%.
This year, mobile video game revenues are estimated at $92.2 billion. This sharp drop contrasts with the growth of 7.3% and 25.6% observed respectively in 2021 and 2020.
The lockdowns had dramatically boosted developer revenue. Today, the context is different. Players are suffering from the crisis and are not necessarily inclined to spend money on extra lives, skins, etc. on mobile video games.
According to the FT, some developers would see their income from these in-game purchases drop by 15 to 20%. Moreover, this decline would not only concern mobile games, but the entire gaming industry. For consoles, shortages add to the equation.
Multiple causes?
The Financial Times conducted a survey of industry players. And while some point to macroeconomic conditions, others believe there are deeper reasons for this decline in mobile gaming revenue.
First of all, there is the presence of free-to-play titles. In essence, in times of crisis, some gamers will turn to these free games, instead of buying titles. Other parameters, such as variations in exchange rates, or the exclusion of the Russian market, can also affect developers.
Alternatively, it’s also possible that by cracking down on ad tracking on iOS, Apple has unwittingly affected game developers. Indeed, as advertising tracking is more limited on iOS today, some developers would have difficulty showing their advertisements to the types of players targeted. But it is also possible that the mobile games industry has reached “saturation”.
A serious situation?
In any case, whatever the case, like many other sectors, mobile video games are not immune to the crisis. And that has an impact on other companies, like ad platforms. This is because declining mobile gaming revenue may lead to lower advertising spend by developers on Facebook, Google, etc.
Quoted by the Financial Time, Ampere, another data analysis company, even sounds “the alarm bell for the industry”.
