A new report by AppsFlyer sheds light on trends transforming the mobile gaming industry
AppsFlyer released the findings of its The State of Gaming App Marketing â€“ 2020 Edition report that explored the growth of mobile gaming over the first three quarters of 2020. The report that analyzed over 9 billion app installs found that the pandemic drove higher app installs over last year, a 45% increase compared to 40% in 2019.
Are Higher App Installs Here To Stay?
In 2020, social distancing and government-imposed lockdowns came crashing into our lives because of the COVID-19 pandemic. But as Albert Einstein said, â€œIn the midst of every crisis, lies great opportunityâ€, and this indeed was the case for mobile games this year.
Seeking to be entertained and distracted while at home, people across the globe â€” both existing players and first-timers â€” took to their mobile devices to play games.
But there’s one question that lingers: is this â€œthe new normalâ€? Is the pandemic-driven growth in mobile gaming here to stay? Or is it likely just a short-term phenomenon that will see a correction as people adapt to a new normal, or even go back to pre-COVID normal when, as we all hope, a vaccine is made widely available?
Certainly, there have been some positive short-term gains in the mobile gaming market, and there are some indicators that this growth may persist into the future. However, with much uncertainty on the horizon â€“ not only in terms of the far-reaching economic effects of the pandemic but also other factors like iOS 14’s changes to the App Tracking Transparency framework â€“ it’s hard to say for certain what’s around the corner.
Key Trends Analysis
Let’s take a look at some of the key findings of the survey:
Install growth attributed to a rise in â€œSoft Gameâ€ players
The pandemic has led scores of new players to try mobile gaming for the first time as they were looking for entertainment and distraction while at home. The report breaks down gaming categories into Hyper Casual, Casual, Midcore games, Hardcore, and Social Casino games.
The study found that Hyper Casual game installs witnessed the sharpest increase YoY (65%), so clearly, beginner players start with the easiest games (Hyper Casual), and only a small percentage of them become hardcore gamers (12% increase).
Gaming apps, especially Hyper Casual, realized the opportunity and greatly accelerated their user acquisition (UA) efforts to meet the heightened demand.
User acquisition in high population developing markets surge
Large developing markets like Brazil, Indonesia, and India, and to some extent, Russia and Vietnam have seen some of the highest increases in the growth of paid user acquisition.
This is not a surprise â€“ the major growth markets in 2020 are largely what we’d expect to see, regardless of COVID-19. Not exactly a new normal, but perhaps an acceleration of old norms instead.
Unlike the tier 1 markets like the U.S. or Japan, fast-growing developing markets are attracting more budgets and are definitely worth exploring.
Despite the low average revenue per user, the media cost is also a fraction of what it is in the tier 1 gaming markets. When it comes to ROI, these markets have a lot to offer.
Interestingly, Hyper Casual follows a different trend than the other categories. Marketers are directing their efforts towards Western markets, as the U.K., France, and the U.S. are growing fastest.
Hyper Casual games need to rapidly drive scale and ad revenue, and although Western markets are more expensive, they are also able to monetize that scale for higher CPMs.
The report revealed game install patterns across some of the largest markets. The trends suggested that Hardcore games were more popular in Brazil, Casual games in Indonesia, and Midcore in India.
Growth opportunities around the world increase
Across all categories, when we look at the fastest-growing markets outside the top 10, we see countries in Latin America, Northern Africa, and parts of the Middle East and Asia starting to show meaningful growth. For instance, Pakistan witnessed a massive 207% growth in app installs while Peru saw game installs soar to 127% higher than the previous year.
For Hyper Casual and Casual, we see similar markets, with the noticeable addition of Australia, Malaysia, and South Africa. Midcore also follows similar patterns, but with more growth in Action in Northern Africa.
Gaming apps maintain strong in-app purchase figures post-lockdown
Although users started installing gaming apps en masse when lockdown began in March, in-app spending followed in April and peaked in May (+25% vs. February), and later again in July.
Gaming apps were able to maintain impressive revenue figures in the months that followed lockdown. It appears that these apps were able to leverage the large number of users who installed during the lockdown and remained engaged.
In yet another indication of just how different 2020 was, its numbers vary drastically from 2019. Last year, most revenues were generated during Q1, and then dropped sharply in Q2 and remained mostly the same in Q3.
This year, the opposite is true (a reminder that the fact that the green line is above or below the blue line does not mean revenue is higher or lower, only that revenue was distributed differently each year in question).
A category breakdown shows that Casual has been the driving force of IAP revenue. Not only did its figures jump 55% from March to May, but the numbers also remained high in recent months.
Remarketing is a missed opportunity for app marketers
When comparing users exposed to remarketing campaigns with users who were not among the same gaming apps, the data is resoundingly clear â€“ remarketing drives paying users to spend more, particularly in Hardcore (witnessed a 161% lift) and Social Casino games (130% lift in 2020).
â€œIt’s not a surprise that we saw a massive increase in new players trying games for the first time; in particular, Hyper Casual installs surged 90%, including a staggering 250% in the number of marketing-driven non-organic installs,â€ said Shani Rosenfelder, head of content & mobile insights, AppsFlyer speaking to Toolbox Marketing. â€œWhat’s significant is that gaming apps realized the opportunity to accelerate their user acquisition efforts and took full advantage of this trend while in the moment. The brands that made the reactive, nimble moves to meet heightened demand dominated the stay at home peaks in gaming app engagement.â€