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Mobile gaming trends 2021

Mobile gaming industry overview

Online mobile gaming industry - analysis, trends, and statistics

Gaming, and mobile gaming in particular, is continuing its meteoric rise in the entertainment industry. More people are playing games than ever before as they look for social interactions and fun ways to spend their free time, and Covid-19 is only accelerating this upward trajectory. 

Newzoo estimates that by the end of 2020, mobile game revenue will hit $76.7B, a 12% increase from 2019. To put that figure into perspective, the global Box Office revenue was $42.5B in 2019, and the global recorded music industry generated $20.2B in wholesale revenues in the same year. In other words, by the end of 2020, mobile gaming alone will generate more annual revenue than the music and film industries combined. Let’s take a look at more statistics and trends to help us understand what to expect from gaming in 2021. 

Mobile game industry statistics 

  • According to GameAnalytics, in Q1 2020, the number of mobile gamers grew from 1.2 billion people to 1.75 billion per month, marking an increase of 46%.
  • Newzoo states that the number of mobile gamers in 2020 will peak at 2.6 billion, of which, 38% will pay for games.
  • Consumers spent over $19 billion on mobile games in Q2 2020, representing the largest quarter yet, according to App Annie
  • 21% of Android and 25% of iOS apps downloaded are games 
  • Google Play revenue continues to increase at a greater level than iOS App Store revenue: 19.6% to 13.2% 
  • By 2022, it is predicted that Android games will be responsible for 56% of all mobile game revenue 

The mobile game market

Covid-19 lockdown measures resulted in a rise in consumer spending in all gaming categories, but mobile saw the sharpest increase compared to PC and console games, and is expected to generate $77.2 billion in 2020 - 12.3% growth year on year. 

Looking at the fastest growing genre within mobile games, App Annie data suggests casual games are leading the global download growth rankings, racking up a 45% year over year increase in H1 2020.

Within the casual genre, the hyper-casual game market alone is worth over $2 billion, and has brought into the ecosystem 100 million new mobile players.

For marketers, 2020 saw the cost to acquire a player drop significantly to $1.47, a 66% decrease from 2019. Despite this, it is more expensive to acquire a paying user than in 2019: the $43.88 cost marks a 24% increase YoY. This suggests that app developers will focus even more on monetizing users through ads. 

Retention rates, from day 1 to day 30, are highest in North America, which beats the global retention benchmark by between 1 to 2 percentage points across the curve. Genre-wise, social casino has the strongest retention curve, with 2x the D30 retention than Hardcore and almost 3x the retention of Midcore and hyper-casual

Trending mobile games in 2021

According to App Annie, here are the top 10 mobile games worldwide from 2020 by downloads: 

  1. Free Fire (Garena Online) 
  2. Subway Surfers (Sybo) 
  3. PUBG Mobile (Tencent)
  4. Gardenscapes - New Acres (Playrix)
  5. Brain Out (Eyewind)
  6. Ludio King (Gametion) 
  7. My Talking Tom Friends (Outfit7)
  8. Homescapes (Playrix) 
  9. Brain Test: Tricky Puzzles (Unico Studio)
  10. Tiles Hop: EDM Rush (Amanotes)

Mobile gaming industry analysis and trends in 2021 

1. Gametech will continue fueling gaming’s growth

In 2020, Newzoo released an infographic mapping out the many layers of the gametech ecosystem, which is both supporting the games industry and fueling its growth.

mobile gaming industry

New technologies and developments in the gametech ecosystem will continue to strengthen the industry: on the development side, game engines like Unity and Unreal will improve their products and empower more game developers to create engaging products; in terms of platforms, leading gaming companies like Epic Games and Roblox will continue to fuse music and film with virtual game worlds, ushering in a new era of innovative experiences; and the ad tech and monetization tools used by developers to make money will become even more advanced, most notably in-app bidding. Learn more about gametech in our podcast episode with Newzoo.

Bidding solutions like ironSource LevelPlay are being embraced by mobile game developers of all genres, enabling them to maximize their ad monetization and automate time consuming processes - and the tech is only going to improve. To learn more about LevelPlay in-app bidding, download our eBook.

2. IAP games will begin adopting ad monetization at higher rates

As pointed out by GameRefinery in ironSource's 2020 gaming trends survey, developers across all genres have widely adopted in-game ads to support IAP-monetization. With fierce competition forcing developers to optimize their ads, in terms of both creativity and placement in the game, ad units such as rewarded videos and offerwalls are actually adding value to the gaming experience, and for many engaged players they are welcome alternatives to real-money payments.

There are multiple reasons that make it likely we’ll see this adoption of ad monetization continue to rise in IAP-focused games. Firstly, as mentioned earlier, in 2020 the cost to acquire a user who goes on to make an in-app purchase jumped 24% year-on-year to $43.88. For many UA managers, this will motivate them to change their goal and instead acquire cost-effective users who can be monetized by ads instead of IAPs. In fact, the savviest growth managers are already realizing the ability of opt-in ads like offerwalls to boost IAPs further down the line, by giving users a “taste” of premium content without spending any money. 

For more information about offerwalls, check out our dedicated eBook here, and read how Square Enix used ironSource offerwall to increase ARPDAU 5x.

3. Apple's ATT framework will force UA managers to adapt

Apple's new privacy guidelines, which aim to prevent unwanted user-level tracking by giving users more control over their data, will force UA managers to change their approach. AppTracking Transparency (ATT) is one way Apple will implement these changes: in effect, it will require all apps to ask permission from users to track their data, and many industry professionals anticipate that the majority of users will not grant permission. This means the existing methods for tracking and optimizing marketing campaigns and ad monetization will not be possible most of the time.

Apple will give developers an alternative way to track campaigns intelligently through its SKAdnetwork, ushering in a new environment for UA and what is required to acquire users effectively in the mobile games industry.

For a deeper dive into this topic, listen to Yevgeny Peres, VP Growth at ironSource, talk on the Deconstructor of Fun podcast.

4. Social features will continue to rise

With the app stores increasingly saturated, finding ways to retain users longer is a top priority for developers: expect to see plenty of games, from casual to hardcore, integrate social mechanics like activity feeds (where users can follow the in-game progress of others), in-game chats, push notifications that alert users of mentions or invites from friends, and guilds (AKA clans or groups). The maturation of the hyper-casual category, which is seeing developers adding more depth and meta features to their games, could also contribute to a spike in social mechanics.

The rise of Bunch, which attracted investment from EA and Ubisoft in a $20M round in September 2020 for its app that enables players to hold a group video chat while playing multiplayer games, is an indicator of where the industry is heading. 

In addition to social mechanics in mobile games, games native to social platforms such as Snapchat will continue to gain popularity and market share. Mobile gaming giant Zynga, for example, partnered with Snapchat in 2020 to release multiple titles exclusively on Snap Games, hoping to tap into their inherently social platform. More partnerships like this are likely to happen in 2021 as social media apps try to grab a piece of the gaming pie.

5. Increasing consolidation

Despite Covid-19, 2020 saw numerous mergers and acquisitions in the mobile gaming space, with consolidation the running theme. Zynga acquired two leading Istanbul-based developers in 2020: Peak Games for $1.8BN and Rollic Games for $180 (for 80% of the company - the remaining 20% will be purchased over the next three years), Stillfront Group acquired Storm8 for $300M, Take Two purchased Playdots (who developed the popular Two Dots title) for $192M, Miniclip acquired Israel's Ilyon Games for $100M, and many more. We expect this trend to continue, with gaming giants swallowing up the middle-tier of gaming companies.

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