Revenues have declined in other high-performing mobile markets around the world as publishers begin to expand into alternative markets.
U.S. year-over-year mobile game revenue fell for the first time, analyst firm says Detection tower signaled in its balance sheet for the first quarter of the year, even as it installs reached 14.4 billion worldwide. The market was down 10% in the quarter, and the Japanese mobile market, the world’s second largest, fell 18%.
Although this may seem serious, the amounts are far from small. Spending by US gamers totaled $5.8 billion and consumers spent $4.2 billion on mobile games in Japan.
The overall downward trend is in line with the wider games industry, which has seen a steady decline in revenue each month in 2022. NPD Group Executive Director Mat Piscatella previously told GameDaily that the changes in the post-lockdown industry landscape explain some of these declines.
Craig Chapple, Sensor Tower’s mobile information strategist, agrees, but tells GameDaily the industry is also considering the implications of Apple’s changes to the advertiser ID policy that allows users to opt out of targeted ads, among other issues.
“A variety of factors seem to be at play: perhaps the industry is on the decline from rising revenues caused by the pandemic and lockdowns, while also facing headwinds from the IDFA , inflation and recent increases in the cost of living in many countries,” Chapple said. “The Chinese mobile games market has also had to deal with its own issues, including a new license freeze that lasted until the first quarter of 2022.”
Regardless of fluctuations, Chapple said revenue was still much higher than it was in 2019 and agrees with Piscatalla that the pandemic has lifted the industry’s baseline and how analysts will assess earnings. in the future.
While markets in the US, China and Japan will likely continue to thrive, albeit to a slightly lesser degree, mobile developers and publishers are also beginning to expand into what Sensor Tower calls “alternative markets” , regions such as India and Brazil that are generally not considered lucrative for mobile games. A greater presence in these regions is not just a matter of increased income, at least not initially.
Emerging markets offer potential growth opportunities, and as macroeconomic factors change in different regions, such as increasing disposable income and increased smartphone proliferation, these markets become more attractive,” Chapple said. “[However]it should be noted that while some markets, such as India and Brazil, generate relatively low revenue from gamer spending, the large population size and huge Android markets mean they are able to amass a large number of downloads.
Chapple said that in the first quarter of 2021, 15% of global game installs on Google Play and the App Store occurred in India. The long-term strategy is finally paying off, it seems, as he said revenue grew 73% in the previous quarter.
In all markets, RPGs and strategy games were among the top performing genres, and Genshin Impact from miHoYo (renamed Hoyoverse outside of China) contributed to the 58% increase in player spending in the Action RPG category. The open world recently hit reached $3 billion in revenue after being on the market for just 18 months, GenshinChapple’s continued success came as no surprise.
“There are few games that do what Genshin Impact does,” he said. “It offers a ‘triple-A’ open-world role-playing experience available across different platforms. Developer miHoYo has extensive experience in the genre and has created an incredible live ops pipeline, delivering a series of huge updates adding a slew of new content to the game that is sure to keep players engaged and coming back.
He also cited the game’s relatively lax gacha system as another influencing factor and said it supplements the game instead of posing a barrier.
While other mobile RPGs might take a more aggressive approach to monetization, it’s the consistent delivery of updates and dedicated audiences that consistently make it one of the most successful genres.
“Inherently, these titles have a highly engaged audience, with the most successful titles delivering a steady stream of content to keep users playing,” Chapple said. “It should also be noted that a large part of this kind of revenue comes from the very lucrative Asian markets: Japan, China and South Korea. Here, the gacha monetization system, for example, is much more widely accepted, while RPGs are immensely popular.
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