Essential industry roundup
- Mobile represented 49% of total revenue generated by the global games market in 2023, $90.4 billion.
- Consumer spending on mobile games decreased 2% YoY in 2023, to $107 billion, but grew 4% outside of China.
- The top 10 titles for consumer spend globally were Candy Crush Saga, Honor of Kings, ROBLOX, Royal Match, Coin Master, Genshin Impact, Gardenscapes, Monopoly GO, Pokemon GO, and Game for Peace.
- Mobile games ad spend will reach $103 billion in 2024 and $131 billion in 2025.
- Mobile Legends: Bang Bang was the most watched mobile gaming esports title in 2023, with 530.16M hours watched, followed by PUBG with 135.16M hours.
What we’re keeping an eye on in 2024: The in-game NFT space, cloud gaming on CTV and OTT, augmented reality and virtual reality gaming, an uptick in subscription models on mobile, and cross-platform PC and console play.
“Advancements in AI technology, particularly the algorithms that power our UA platform, enable advertisers to achieve their desired campaign goals with greater accuracy and scalability. As AI continues to refine its ability to accurately determine where to spend to deliver optimal performance, the need for manual optimization is eliminated. This significantly increases efficiency for advertisers of all sizes and verticals.”
Adjust, Applovin – Hussein Zayan, Sr. Director
Business Development
Finding and keeping users
2023 didn’t represent the great bounceback for mobile gaming app installs and sessions that the industry was hoping for, but things are starting to look up. While installs decreased by 2% globally and sessions by 7%, installs in Q4 of 2023 grew by 7% YoY. With the ongoing boom of hybrid casual, we’re quietly confident that the needle will keep moving in the right direction overall.
Regionally, LATAM bucked the global trend, with gaming installs bouncing up 7% and sessions by a modest 1%. EMEA saw the highest degrowth in sessions (9%) and North America charted the biggest decrease in installs (6%). Looking at the YoY installs numbers for Q4, however, APAC grew by 3%, EMEA by 12%, LATAM by 19%, and North America by 6%.
“While overall gaming installs had modest growth compared to 2022, a closer look reveals a different story. In the latter half of 2023, a notable uptick in DAV (daily active viewers) and a surge in CPMs led to stronger returns for app developers. This is most evident when looking at sub-categories such as hybrid casual, where we’ve seen a significant rise in revenue compared to last year. These trends highlight healthy growth for the gaming industry.”
Adjust, Applovin – Daniel Tchernahovsky
VP, Global Business
Development
Gaming app installs and sessions by subvertical (Global)
Of all gaming installs, action accounted for the largest share with 18%, followed by hyper casual (14%), puzzle (14%), casual (9%), and sports (8%). Action also accounted for the largest piece of the sessions pie at an even bigger 27%, followed by puzzle (12%), sports (12%), board (7%), and casual (6%).
The overall sessions and installs landscape might look less than optimistic, but at subvertical level, there were a healthy number of growth areas in 2023. Racing and simulation games saw the highest installs spikes at 61% and 53%, respectively, while arcade and adventure charted the biggest sessions increases, 19% and 7%.
Interestingly, the average session lengths for games remained identical YoY from 2022 to 2023 at 32 minutes per session. The longest session lengths took place in APAC, which grew from just under 35 minutes per session to just over. LATAM, the only region with YoY sessions and installs growth overall, dropped from 27 to 26 minutes per session.
In 2023, gaming apps saw a significant (but expected) decline in user engagement from day 0 to day 1. Users started with an average of 1.93 sessions on the first day and dropped to 0.63 by the next day. Hyper casual games showed the most considerable reduction, beginning with 1.86 sessions on day 0 and falling to just 0.51 by day 1. Simulation charted the highest figures, with .77 on day 1 and 2.06 on day 0.
BONUS: Action games had the longest session lengths at 45.65 minutes, followed by RPG at 40.43. Hyper casual sessions were the shortest at 16.36 minutes.
Retention rates were consistent across the gaming vertical when comparing 2022 to 2023, but did tend to a slight overall decrease. Day 1 rates for all games dropped from 29% to 28.3%, day 7 from 14% to 13%, day 14 from 9.7% to 9.3%, and day 30 from 6.4% to 5.3%. Hyper casual, with its very different retention pattern to most gaming subverticals, increased its day 1 rate from 26% to 27%, its day 7 rate from 8% to 8.4%, day 14 from 4.3% to 5% and day 30 from 1.8% to 2%.
Gaming app stickiness was resilient in 2023, maintaining the 2022 rate of 20% globally. Looking at different categories, there was a lot of growth, indicating that although install rates are down overall, for many subverticals (including those where installs are up), an increasing number of DAUs are converting into MAUs. Adventure games charted the highest stickiness (31.6%), followed by puzzle and RPG (both 29.8%), board (24.5%), and word (23.1%).
“The best way for gaming developers to increase long-term retention is to make their game or app feel like it’s designed especially for their players. AI helps by enabling the developer to segment users and customize game progression so it feels as if the game’s level of difficulty has been uniquely calibrated to a user. Segmentation can create custom experiences that feel unique to each user, which leads to more engagement–and that leads to more retention. We’re likely to see more of this application of AI–in gaming and beyond–to personalize app experiences and successfully retain users.”
Adjust, Applovin – Daniel Tchernahovsky
VP, Global Business
Development
The increase seen in cost per install across the board in gaming throughout 2023 is probably the highest driver of the decrease in installs, as high acquisition costs lead, overall, to less acquisition. The cost increase for adventure and simulation (among others) proved to be an exception, with their installs and sessions numbers booming despite the price. Simulation saw the biggest jump ($1.23), and RPG actually decreased by $0.42.
Focusing on LTV, we see that the subverticals with more expensive eCPI do also offer higher payoff over a 30 day period. RPG games represent the highest median LTV, around $3.31 per user by month 0, followed by adventure games users at $2.35. Comparing the eCPI and LTV directly, neither vertical’s users pay for their install cost by month 0, indicating the importance of understanding user expectations to create more monetization opportunities and higher revenue medians.
“App businesses aim to acquire as many users as possible that engage and yield a profit. In the past, a UA manager focused on hitting short-term targets like a D7 ROAS because that number indicated a high likelihood of profitability. Today, the priority is to understand the curve of user behaviors within their app when acquiring players across different channels with their own algorithms and associated campaign types. By segmenting and optimizing toward these behaviors, UA managers can achieve profitable growth more quickly and sustainably.”
Adjust, Applovin – Cyril Cael
VP, EMEA Business
Development
Mobile gaming experienced an overall decrease in the ratio of organic to paid installs, falling from 0.71 to 0.54. This reduction was noticeable in subgenres such as board, puzzle, and word games, the latter of which saw the biggest drop in organic installs. Action and adventure games, however, climbed from 0.42 to 0.82 and 0.3 to 0.72, respectively, suggesting heightened interest in these particular genres, and a decreased emphasis on paid UA.
In 2023, gaming apps saw a significant decrease in reattributions, with the share dropping from 0.04 to 0.02. This trend was most evident across board, hyper casual, puzzle, simulation, and word games. While the first three typically monetize via new users and fast-paced UA, simulation’s figures map to the increase in installs across the board for the vertical.
BONUS: In 2023, APAC had the gaming vertical’s highest paid vs. organic ratio globally at 0.56, followed by MENA at 0.51, LATAM at 0.42, and North America at 0.4.
There was a slight decrease in partnerships within the gaming app industry in 2023, which correlates with the decrease in share of paid installs and drop in installs overall. The median number of partners dropped from 6.5 to 6. The biggest drop was seen for puzzle games, down from 9 to 5. Adventure and word games, on the other hand, expanded their networks. The number of partners for adventure games rose from 7.5 to 8, and for word games, it increased from 6.3 to 7.
Gaming apps experienced a notable 6% rise in in-app revenue YoY, indicating high spend from the smaller number of users overall. The trend was especially noticeable in December, when in-app revenue was 17% higher than the yearly average, which correlates with the YoY installs boost seen in Q4. Looking ahead, we anticipate this growth to extend into 2024, with marketers and developers that embrace AI-driven personalization likely to reap the most rewards as they unlock clever ways of finding and monetizing users.
The full version of the “Mobile App Trends 2024 Edition e-book” can be accessed via the link.
