Most of mobile gaming’s history has followed a simple growth pattern: investing heavily in marketing and driving more installs brings more revenue.
That dynamic shaped the industry’s expansion. As long as the cost to acquire a player stayed below the value they generated over their lifetime, scaling acquisition was a reliable and sustainable way to grow. Studios refined the loop: expand the funnel, optimize CPI, improve ROAS, reinvest, repeat.
However, the latest Sensor Tower data shows that formula no longer defines growth.
According to the figures, global mobile game revenue has grown 7.3% since 2023, while installs have declined 11.8% over the same period.
Year-over-year, 2025 versus 2024, revenue rose another 1.3% even as installs dropped 7.2%.
This is no short-term wobble. The number of potential users is finite, and attention is only getting more fragmented, including competition from TikTok and many other consumer apps. Mobile gaming can no longer grow the way it has been simply by adding more users, which has become more expensive and complex over time. It’s now growing by monetizing more from the users already inside the ecosystem.
The Great Decoupling
It makes sense that the old growth formula has stuck around for as long as it has. For much of mobile gaming’s early growth phase, installs or revenue climbed or fell together. Now, flat or declining installs and rising revenue suggests other growth levers are doing more of the heavy lifting, specifically focused on increasing ARPU and lifetime value.
This shift is creating pressure across the industry. Scaling through user acquisition was pretty straightforward. Extracting more value from existing users requires deeper product innovation, stronger retention systems, and more sophisticated monetization design.
This has been visible in market dynamics for some time. Deconstructor of Fun highlights that already in 2024 in many genres, a handful of top games dominated revenue, with the top three titles often capturing over half of the market.
Sensor Tower data shows that in 2025, new game launches generated only around 7% of total mobile game revenue, with 63% going to games that are over three years old. Growth depends on how effectively studios retain users and expand their value over time.
This is what a maturing market looks like. The land-grab phase is over. Studios need to shift from scaling reach to maximizing the value of the users they already have.
Growth Is Moving Deeper in the Funnel
Alongside shifting dynamics, the role marketing plays in games growth is also evolving to support deeper-funnel business impact. AppsFlyer reported that $25 billion was spent on user acquisition for mobile games in 2025, representing a modest 3% YoY increase. At the same time, investment in re-engaging existing users is rising, with remarketing growing from 25% to 29% of total marketing budgets.
That makes sense when the underlying player dynamics haven’t changed. Around 85-90% of users churn within the first seven days, meaning a smaller cohort generates the majority of long-term value. Growth depends on how effectively that cohort is retained and monetized over time.
When LTV isn’t expanding however, the return on investment of user acquisition can decline and become less efficient every quarter.
The data continues to confirm that retention drives performance and determines how long users stay and engage. Any studios treating it as a secondary lever leave meaningful revenue on the table.
Retention Becomes the Growth Driver
When installs are dropping, small improvements in retention are key. Extending player lifespan by even a few percentage points changes LTV curves. Increasing session frequency and duration creates more monetization opportunities. Deepening engagement opens up new touchpoints for both IAP and advertising.
Ultimately, it’s cheaper to retain a user than buy a new one. For a studio to succeed today, only buying traffic won’t cut it. They have to design layered systems, from progression loops to live events, battle passes and social mechanics that make users stay longer and engage more deeply.
Games like Monopoly GO! and Royal Match use constant events and progression systems to drive repeat engagement, with Scopely’s game reaching daily engagement rates as high as 70% as of 2024.
Apps like Focus Friend, a gamified productivity app that launched in 2025, uses a progression system similar to free-to-play builder games, where completing actions generates currency used for building and decorating a player’s space, with escalating costs, unlockable areas, and personalization driving long-term engagement. Early reports suggest D30 retention above 30%, well above industry norms.
That expanded LTV increases revenue and improves UA efficiency as well. What you’re doing is creating a system of choice where studios can decide if they want to pocket extra profit or reinvest in marketing. Monetization and growth teams need to work more hand in hand than ever before.
The Role of Growth Levers
As the industry shifts toward efficiency, studios are finding new ways to increase the value of each player.
One of the clearest trends is the rise of direct-to-consumer (D2C) strategies. By moving payments outside traditional app store ecosystems, studios keep a larger share of revenue from their most engaged users. In an environment where growth depends more and more on maximizing lifetime value, those margin improvements can have a meaningful impact.
At the same time, there is a broader move toward a value-for-time model. Users now understand their attention has value, and games compete by making that time feel worthwhile through systems that embed rewards into progression. When progress, rewards, or earnings are tied directly to time spent, the cost of leaving increases. Users stay and engage more.
These systems work because they create a clear value exchange. users get tangible rewards for their time, and studios create more opportunities to monetize that engagement. When implemented well, these mechanics reinforce retention loops instead of just driving a one-off action.
In a market where install growth is slowing, these kinds of embedded growth levers are becoming increasingly important. They help studios extend user lifetimes, deepen engagement, and ultimately increase the value of every player who enters the ecosystem.
Scale to Sustainability
Acquisition still plays a critical role in growth. It brings users into the ecosystem, but value is created through how long they stay and how deeply they engage.
The prior era of mobile gaming was about marketing scale. The next era is about sustainability. Mobile games revenue is still rising but the source of that growth has shifted decisively downstream. Studios cannot rely on acquiring more users anymore. Instead, they need to build loyalty, retain them, deepen engagement and increase their value over time.
At this stage, users are too expensive and too scarce to lose casually. It costs far more to bring someone back than to keep them engaged. Studios can no longer afford to lose users they’ve already paid heavily to acquire.
SVP of BD for ZBD
