Contrary to popular expectations, the mobile gaming industry may not sustain growth for much longer. If anything, analytics indicate overall sales are at a decade-low. Not too surprising, as there aren’t that many great titles out there, and other viable gaming alternatives exist.
Mobile Gaming Sales Hit A Snag
It has been a good decade for mobile gaming globally. The advent of affordable smartphones and the growth of app stores have made games accessible to billions of players. Mobile gaming is a thriving industry, but all good things will come to an end eventually. Today, mobile gaming represents half the global games market, yet the momentum has soured somewhat. Overall sales are down across the board, resulting in a revenue decline of over $90 billion for 2022.
That is a remarkable trend, as 2021 was a year of solid (7.3%) growth. Moreover, 2020 was a stellar year with a 25.6% revenue growth. THat was primarily due to COVID-19 lockdowns and other restrictions. Those forced consumers to look for alternative entertainment solutions, making mobile gaming a solid choice. These games are easy to pick up – although some cost money – and can be played whenever.
There is also a bad reputation among many mobile games, though. Numerous titles maintain a pay-to-win approach. Players can pay money to speed up in-game progress or gain advantages. In addition, they are incentivized to spend money for in-game characters and unlock “extra rewards” along the way. Pop-ups claiming to over “over 800% in value” are very common. Such games are very successful, though, but it seems that momentum has also stalled.
Moreover, research by Ampere Analysis indicates key regions are losing interest in mobile games. More specifically, there is less revenue for developers in the U.S., Japan, and China. Those three countries represent the lion’s share of mobile gaming today. If that momentum continues, it will likely spill over into other regions, driving revenue down further. Ongoing economic concerns and less overall money to spend make mobile titles an afterthought rather than the main focus.
A Brewing Issue For The Gaming Sector
While the primary focus of the research is on mobile gaming, the problems don’t end there. As the most lucrative industry for game developers shows signs of stagnation, traditional gaming will encounter a similar squeeze. Revenue has fallen for most developers active in PC and console gaming. Regardless of which titles might be under the banner, there is less interest in subscriptions and paying up to $70 for a game one can complete in a few days. Game streaming solutions like Xbox Game Pass and Playstation’s service will remain appealing as long as they keep adding more titles.
Moreover, the mobile gaming setback poses significant issues for companies like Netflix. The video streaming giant has increased its mobile games-oriented focus right when industry momentum sours. It will be interesting to see whether that impacts the company’s focus for 2023 and beyond. Ongoing scrutiny by regulators regarding digital ads related to gaming aren’t helping the industry either.
