The Shocking Truth about the Decline of the Mobile Gaming Market in 2022
The article represents the mobile gaming market analysis prepared by the MGVC team. The findings and conclusions are based on the range of analytical solutions that include data.ai, Newzoo, and others.
Introduction
For quite a while, the gaming market was considered by some to be an evergreen industry that thrives regardless of the worldwide economic situation.
Changing Tides: A Gloomy Outlook for the Mobile Gaming Industry
2022 was the year that shattered this belief. According to data.ai, the mobile gaming industry experienced a significant decline of almost 7%, making it the leader of the fall within the overall gaming industry. This came as a shock to many, considering the industry’s long history of growth even during times of economic crisis.
The Mobile Gaming Market in Numbers
In comparison to other gaming platforms, the decrease in the revenue of console and PC games was much lower, at 3.4% and 1% respectively. These numbers raised questions about what could have caused such a drastic decline in the mobile gaming market, which had been thriving for over a decade.
Factors Behind the Decline
Several factors contributed to the decline of the mobile gaming market in 2022:
- Change in Players’ Payment Behavior: The decrease in disposable income led to a change in players’ payment behavior, resulting in more conservative investment models by mobile publishers.
- Competition for Players’ Attention: Short video services and streaming services emerged as competition for mobile games, with platforms like TikTok gaining massive popularity.
- Apple’s IDFA Depreciation: Apple’s decision to limit tracking resulted in changes to user acquisition strategies and less monetization for publishers.
- Increased Competition within Genres: The growing number of games within genres raised the quality bar and acquisition costs, making it difficult for new games to succeed.
These challenges affected both small and large game studios, making it increasingly difficult for them to launch new games and sustain growth in the changing market environment.
Genre Analysis: Winners and Losers
Despite the overall decline, some genres managed to show positive results. Let’s take a closer look:
The RPG, Strategy, and Match genres, which were previously revenue leaders, experienced declines of over 5%. The poor performance of the Team Battles subgenre contributed significantly to the drop in RPG revenue.
However, the Action genre saw a 21% increase in revenue, boosted by the popularity of MOBAs and games like Honor of Kings. The Party genre also experienced growth, albeit less significant at 8%. Notably, Stumble Guys gained attention within the Party genre.
Regional Analysis: Winners and Losers
Different regions faced varied impacts in the mobile gaming market. Let’s examine them individually:
Western Markets
Western markets, including the USA, Germany, France, and Great Britain, accounted for a significant portion of the global industry revenue. However, they experienced a 12% drop in 2022, contributing to the overall decline. Match, Strategy, and Casino genres were the top revenue drivers but all saw a decline, except for the Party genre, which showed an 8% growth.
Asia (excluding China)
In Asia, the mobile gaming market dropped by 10% to $16.9 billion. Party games revenue decreased by 37%, although the Party genre has a small presence in this region. Only Casino and Action genres saw an increase in revenue.
Emerging Markets
Emerging markets, such as South America and Turkey, experienced positive dynamics with a 5% increase in the mobile gaming industry. Party and Match genres were the growth leaders, but RPG, Sports, and Racing genres declined.
China
China, a major player in the global mobile gaming market, showed a 19% increase in in-app revenue on iOS. However, data on Android performance in China was unavailable for thorough analysis.
2023 Outlook: Is Recovery on the Horizon?
According to Newzoo’s latest report, the mobile gaming market is projected to rise by 0.8% in 2023, indicating a modest recovery. However, based on our model using data.ai data, the first half of 2023 showed a 1% decrease in the market compared to the same period in 2022.
Party games continued their growth, with an impressive increase of over 60% compared to the first half of 2022. Match games also recovered, surpassing the figures of the first half of 2021. However, RPG, Shooting, and Strategy games continued their decline.
Despite the challenges, there are notable releases in 2023 that may help revive the market, such as Honkai: Star Rail and White Out Survival.
The Investment Landscape: Cautious Optimism
Investments in the gaming industry witnessed a surge during the COVID-19 pandemic as investors sought new opportunities. However, the volume of late-stage and M&A transactions declined as the market became more turbulent.
Investors have become more cautious, raising their expectations for the companies and projects they invest in. While Q1 and Q2 of 2023 saw a continuation of the downward trend, Q3 showed potential for recovery with notable acquisitions such as Scopely by Savvy Games Group and Rovio by Sega.
Conclusion
2022 brought unexpected challenges to the mobile gaming industry, causing a decline in revenue and investment activity. However, amidst these difficulties, there are opportunities for growth and innovation.
Developers must prioritize creating fun gameplay and exciting gaming experiences to retain players and drive success. With the lessons learned from the past year, the mobile gaming industry can adapt, evolve, and continue to produce even better games.