Apple’s Privacy Changes and Post-Pandemic Declines Impact Mobile Game Developers
Many mobile game developers are facing challenges as they adapt to Apple’s privacy changes and navigate the post-pandemic declines in the gaming industry. Scaling a game has become increasingly difficult due to these factors.
The MENA Region Offers Promising Opportunities for Game Developers
In the midst of these market changes, the Middle East and North Africa (MENA) region stands out as a thriving market. Sandsoft Games’ VP of Marketing, Ratko Bozovic, shares valuable insights into the MENA region and explains why its approach to user acquisition presents promising opportunities for developers who embrace the market early on.
Apple’s Privacy Manifests and its Effect on the Gaming Ecosystem
Apple’s changes to the identifier for advertisers have caused significant disruption in the mobile games market. The app tracking transparency has made it challenging for publishers to find engaged players and monetize their games. Furthermore, Apple’s Privacy Manifests aims to eliminate fingerprinting, causing further disruption in the ecosystem.
The latest data.ai and IDC reports indicate that global player spending in mobile games dropped by 5% in 2022, the first yearly decline on record. An additional 2% decline is forecasted for 2023. However, despite this decline, the mobile gaming sector is expected to generate an estimated $108 billion, representing 56% of the overall gaming revenue and remaining the most significant market potential for the gaming industry.
The Resilience and Growth of the MENA Region as an Emerging Market
While the gaming market experienced declines worldwide, the MENA region managed to grow in the post-pandemic era. Newzoo reports that the Asia-Pacific region, which represents 46% of global consumer spending on games, suffered the largest decline of 8.9% in 2022. On the other hand, MENA saw a revenue growth of 5.8% to reach $6.8 billion. Latin America also experienced growth with a 3.3% increase in consumer spending.
In MENA, Saudi Arabia, the United Arab Emirates, and Egypt played a major role in generating revenue, amounting to $1.79 billion in 2022. Niko Partners forecasts that these countries will generate an additional $1 billion by 2026, reaching a total of $2.79 billion. The region’s growth can be attributed to new players entering the mobile games ecosystem and improved access to payment methods.
User Acquisition and Cultural Differences in the MENA Market
Overcoming Apple’s privacy changes and various upcoming privacy policies is a significant challenge for user acquisition in the MENA region. However, compared to major markets in the U.S. and Western Europe, the cost per install (CPI) in MENA countries is relatively modest. For example, Saudi Arabia offers access to a high-spending audience at a lower CPI compared to other regions.
Facebook and Google remain the primary marketing channels, but Snapchat has gained popularity in the MENA region, thanks to its privacy-focused messaging. Snapchat has a significant reach among young users in countries like the United Arab Emirates and Saudi Arabia.
Interestingly, despite a preference for privacy, data from mobile marketing analytics platform Appsflyer reveals that the MENA market has a high opt-in rate for app tracking transparency. In Q2 2023, the Middle East ranked third globally with a 49.6% opt-in rate, indicating a willingness to share data with favorite games.
Opportunities in the MENA Market
Despite the challenges brought on by Apple’s privacy changes, emerging markets like MENA present an opportunity for game developers to grow at a reasonable cost. As more consumers in the region gain access to mobile devices, payment systems, and games, the market is expanding rapidly.
Countries in MENA, such as Saudi Arabia, already have a significant number of high-spending players. By entering the market early, game developers can capitalize on the region’s growth potential. While mature global markets face headwinds, MENA offers room to grow.
Conclusion:
The mobile gaming industry is undergoing significant changes due to Apple’s privacy changes and post-pandemic declines. However, the MENA region stands out as a thriving market that has managed to grow despite these challenges. Game developers who embrace the MENA market early on can benefit from its expansion and the willingness of users to share their data. It is an opportune time to enter this emerging market and create successful and profitable games.