More gaming app marketers to prioritize profits over growth in 2023 as economic uncertainty impacts the market.
AppsFlyer released its State of Gaming App Marketing for 2023, an in-depth report on key gaming trends for app developers, marketers, and game studios to utilize as they navigate through a year of challenging macro trends, including the new age of data privacy.
As the post-Covid era unfolds, a digital slowdown, or return to pre-Covid conditions, is taking place. While the effects are becoming increasingly apparent in metrics like overall app installs by consumers, the gaming app economy still showed resilience with nearly $27 billion invested in ad spend by gaming marketers and developers worldwide in 2022 in order to acquire new users. Overall, Android game app installs rose slightly, by 8% compared to 2021, whereas iOS game app installs showed a small decline, with a 5% drop. Based on advertising investment, the United States remains the largest target market for gaming app marketers by a significant margin, followed by Japan, South Korea, Germany, and the United Kingdom.
“If 2021 and the first quarter of 2022 were the golden age of gaming, the second half of 2022 and especially 2023 will be a time that marketers, developers, and studios will need to overcome challenges to adopt highly-focused, efficient strategies for attracting and inspiring loyal, valuable players,” said Shani Rosenfelder, Director of Market Insights at AppsFlyer. “Evolving marketing budgets coupled with drops in consumer spending across some genres mean game businesses are compelled to prioritize profits over growing the sheer size of their numbers of players. Despite the hurdles, however, mobile gaming remains a lucrative powerhouse nearing three billion players globally. Marketers will continue to succeed by putting more focus on modern measurement capabilities, utilizing techniques that deliver an engaging experience while respecting user privacy, and leveraging remarketing and owned media channels further in order to offset increases in their cost-per-installs (CPI). Additionally, they will need to dive deep into the complex yet promising SKAN 4.0 from Apple, and invest more in campaigns outside of the United States, as gaming is truly a global phenomenon.”
As for gaming app revenues, the State of Gaming report reveals that consumers spent the most on in-app purchases (IAP) in role-playing and social casino (not real money) games. Purchases in these game categories declined mostly in the second half of 2022, leading to an overall drop in IAP revenues by 7% compared to the first half of the year. The economic downturn appears to have impacted consumer behavior in high IAP genres of role-playing and social casino more than other categories like match or puzzle games, which rely more on micropayments. In-app advertising (IAA) remained the strongest driver of revenues for hypercasual, match and simulation games, though IAA revenues also declined across most genres towards the second half of 2022.
“As gaming marketers continue to navigate their way through a shifting economic landscape along with privacy changes, particularly on iOS, they face fresh challenges and opportunities in regards to their app marketing efforts,” said Adam Smart, Director of Product, Gaming. “Privacy restrictions on iOS limit the ability of marketers to leverage user-level data, which was previously the cornerstone of their ability to connect campaign performance to attracting new users. Yet, despite a significant rise in media costs and measurement challenges, gaming apps are still investing heavily in capturing high-quality players on iOS and are not shifting those resources to Android, even if the approach results in attracting fewer users overall. This gives greater importance to the use of privacy-enhancing tech and data clean rooms in 2023 and beyond, and will also provide advantages to those able to leverage accurate and comprehensive data for making the timeliest decisions on where, when, and how to optimally invest budgets in ways that attract and retain the most valuable players.”
Read the full report here.