The mobile games industry faced a year like no other in 2020, as the global COVID-19 pandemic took hold and reshaped how we live our lives. Digital entertainment has been one of the few sectors to make it through the year with business not just sustaining, but rising. The mobile games industry generated a record $79.6 billion from the App Store and Google Play in 2020, up 26.2 per cent year-over-year, or to put it in clear perspective, an increase of more $16 billion from 2019.
Downloads also surged to 56.3 billion, up 33 per cent year-over-year–an increase of approximately 14 billion installs from 2019. These installs not only drove an increase in player spending, but a rise in ad revenue, too.
Analyzing the top 100 titles in each genre in the U.S. last year, we can see that Simulation saw the largest percentage gains in 2020, with the category seeing player spending rise by 61.8 per cent Y/Y to $2 billion. The second fastest growing genre was Casino, with revenue increasing by approximately 49 per cent Y/Y to $4.5 billion, while Lifestyle rounded out the top three genres with player spending increasing by 47.5 per cent Y/Y to $770.5 million. Across the board, each genre saw double digit gains in revenue, and it’s clear that the mobile games sector has attracted more players than ever, but will they stay?
According to Sensor Tower’s new mobile market forecast, player spending will continue to increase over the next few years, reaching $138 billion in 2025, an increase of 73.4 per cent from 2020, while downloads are projected to rise to 79 billion, up 40.3 per cent from last year. Growth, however, will be slower. App Store games revenue will increase at a compound annual growth rate of 10.3 per cent, reaching $78 billion by 2025. This, however, trails the previous 19.4 per cent CAGR during the last four years. On Google Play, meanwhile, player spending will have a CAGR of 13.3 per cent, climbing to $60 billion, also slower than the 21.2 per cent CAGR over the previous four years.
When it comes to downloads, we anticipate App Store installs of mobile games will see a 5.2 per cent CAGR, reaching 13 billion in 2025. Over on Google Play, downloads have a projected 7.5 per cent CAGR, and are forecast to rise to 66 billion installs by 2025.
In terms of the wider market, while in 2020 mobile games accounted for 66 per cent of global consumer spending on the App Store, this is expected to shrink to 42 per cent in 2025 as non-gaming apps are set for enormous–and faster–growth. On Google Play, gaming’s share of revenue is predicted to drop from 83 per cent in 2020 to 71 per cent by 2025. Overall, games revenue will represent 51 per cent of global app revenue across the two stores combined by 2025, down from 71.8 per cent in 2020.
While mobile gaming is losing market share, the market is still expected to perform strongly. However, the most pressing concern for many publishers in the industry are the imminent changes to App Store privacy, with a new opt-in for the Identifier for Advertisers (IDFA) set to shake up user acquisition, a cornerstone of the market’s success.
Craig Chapple is Mobile Insights Strategist, EMEA at mobile intelligence firm Sensor Tower and was previously Senior Editor at PocketGamer.biz. www.sensortower.com