It’s the start of 2023 and the perfect time to begin looking forward at what's to come in this year.
According to Newzoo, the mobile gaming industry will remain the most lucrative sector of the gaming industry and is expected to hit $200 billion in 2024.
But the actual excitement is over where we're headed. If the reports are to be believed, the mobile gaming industry is set to touch $272 billion by 20301. With its majority market share and an experimental approach driven by lower development costs compared with other platforms, mobile leads the gaming industry where others will ultimately follow. According to Data.ai and IDC, mobile gaming is rapidly outgrowing the gaming industry as a whole and has been said to take up 61%of the entire market share last year2.
While betting a claim in the ever-growing mobile gaming market is more difficult than before, there are still opportunities businesses can dig into for market expansion and avenues for growth.
As we step into 2023, let’s look at 8 emerging trends in the mobile gaming market that will shape the industry beyond 2023 and why they’re critical to know for your mobile engagement strategy.
In-line with the age of digitalization, the mobile games industry has been growing at a fascinating rate.
1. A surge in subscription-based monetization
This model has become so established that the two main mobile stores now offer their own à la carte subscriptions in the form of Apple Arcade and Google Play Pass. Both cost in the range of $5 per month to the customer, providing approximately 130 and 600 games respectively.
According to Grandview Research:
The subscription-based gaming market size is expected to expand at a compound annual growth rate (CAGR) of 12.8% from 2022 to 20303
The total revenue for the subscription-based gaming market will reach a whopping $24.1 billion in 20303
Asia Pacific region is identified as having the largest market share of subscription-based gaming, as well as the one with the highest projected CAGR from 2022 to 20303
2. Monetization becomes harder for publishers
With the recent changes in Identifier for Advertisers (IDFA) and Android Advertising ID (AAID), publishers have been left with more limited and less granular data on their players. The data privacy regulation impacts several areas of mobile gaming such as mobile attribution, creative testing, user acquisition, remarketing, segmentation, and monetization.
According to Consumer Acquisition’s Brian Bowman, Advisor & Investor, 40% of mobile companies reported losses post-IDFA4
Facebook reports that the lack of personalized ads could decrease developer revenues by 50%5
According to Venture Beat, Apple’s IDFA change has triggered 15% to 20% revenue drops for iOS developers6
3. The decline of Hyper-Casual games
The key reasons for such a shift can be increased attention from major publishers and enhanced mobile hardware specifications.
Top 200 grossing mobile titles in the U.S. feature 9 midcore versus just 3 casual games7
CMR reported a 27% surge in hardcore smartphone gaming whereas a 32% decline in hyper-casual gaming8
Despite its decline, hyper-casual gaming remains the most popular sub genre globally with 17.5 billion downloads in 2022 - the most of all genres9
4. New emerging mobile gaming markets
In a year of overall shrinkage for the gaming industry, just two geographies observed year-on-year revenue growth in 2022.
Latin America: +3.4% year-on-year to $8.4 billion10
Africa and the Middle East: +6.6% to $6.8 billion10
Saudi Arabia is set to become more central to the games industry as its government-funded Savvy Gaming Group continues investing its planned $38 billion fund in gaming companies11
In 2023, gaming will become intertwined with the metaverse, creating more innovative in-game experiences. This technology will allow the development of virtual products that mingle social media, marketplaces, VR experiences, gaming, and anything one can imagine. We foresee that Metaverse games would operate as whole entertainment platforms that offer even more value on top of traditional gaming experiences.
According to Fortune Business Insights, by 2029, the global Metaverse market will grow to $1,527 billion12
2023 onwards, Metaverse will become increasingly crucial for new gaming projects aiming to explore transmedia boundaries
Online gaming companies such as Roblox and Epic games are the farthest ahead in building Metaverses where millions of people socialize, play, and take part in the digital economy. Some participants even make a living inside these metaverses by selling their digital wares.
6. Generative AI
As gaming becomes increasingly immersive and realistic, Generative AI enables game developers to build fascinating game universes and complex characters that mimic human behavior. Leveraging big data and machine learning, game developers can analyze player actions in the game, predict market requirements, and reduce the time for routine tasks. As a result, they can thus create more engaging experiences in mobile games.
Over $2B has been invested in Generative AI, up 425% since 2020, according to the Financial Times13
Nvidia announced Magic3D, an AI model that can generate 3D models from text descriptions
7. Evolving gaming demographics
Women gamers are growing in numbers. This offers a massive opportunity for game developers to broaden their in-game mobile strategies to make sure they are versatile and personalized.
Women account for 55% of the US mobile gaming population in 202114
The men/women split of gamers is quickly advancing to 50/50
65% of women in the US play mobile games15
8. Industry consolidation
As the mobile gaming industry matures with its tools, gaming titans in the industry have started acquiring smaller companies with compelling solutions to broaden their offerings and become a unified platform for developers to manage and grow their app businesses.
2022 observed 976 games industry deals worth a total of $123 billion16
85% of all gaming companies acquired under $1 billion FY 21-22 self-published their games17(Pollen VC Report)
In January, Microsoft, agreed to acquire Activision Blizzard, publisher of titles including the “Call of Duty” franchise, for $69 billion18
Take-Two Interactive’s acquisition of Zynga has been the second biggest gaming acquisition of all time, illustrating the desire of game developers to grow their footprint on mobile platforms
The beginning? Or the end? What comes next is up to you.
As the mobile gaming industry continually works to adapt to these trends—both the promising and the challenging—We at Mistplay, expect several of these 2023 mobile gaming trends to come much closer to being fully realized this year and beyond.
With the rising popularity of mobile gaming, it is essential to stay abreast with the latest industry statistics to make informed decisions in the mobile gaming business. With the right insights into the trends, right strategies, and resources mobile gaming can be a profitable experience for everyone involved.