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Source: Gaming Spotlight 2023 Review from data.ai and International Data Corporation (IDC)
- Sentiment towards in-game mobile ads generally deteriorated in Q3 2022, especially compared to Q3 2021, according to US mobile gamer surveys. To find new users, it’s important to stay informed on top performing ad networks and formats. Rewarded video and playable ads were gamers’ preferred ad types in the US.
- Over saturation maybe a problem for games that primarily monetise through ads. In the US, consumer opinion of in-game ads tended to fall as the prevalence of different types of ads has risen, so diversifying the types/formats of ads shown in-game is recommended.
- Using demographics is recommended to assess the type and format of ad that has the most favourable sentiment among a given game’s user base to help combat “ad fatigue”—a challenge that creates expensive installs, lower retention for new users and has grown tougher since Apple’s ATT Framework was rolled out (and Google’s comparable Privacy Sandbox is expected to arrive in early 2024). Contextual market data is important for advertisers to succeed in this dynamic environment.
- Mobile still stands as the largest opportunity in gaming, but ongoing updates to privacy regulations, macroeconomic instability, and rising competition has made acquisition and growth more challenging. Finding new users and setting expectations for revenue growth has become tougher.
Mobile spending decline Is leveling out, but privacy & macroeconomic concerns still loom
• Consumer spend in mobile games is set to reach US$108 billion in 2023. Such spending has historically been resilient during economic downturns; However, ATT (App Tracking Transparency) and a crackdown on fingerprinting make it more difficult to target spending “whales” and therefore monetise through IAP. As a result of this and—perhaps more importantly—the escalating limitations on adolescent mobile use in China, we expect a slight 2% decline year-over-year.
• Home console spending should rise 3% in 2023 to US$43 billion based on rising PS5 and Xbox Series X/S spending (and falling Switch spending).
• PC/Mac spending should rise 4% this year to US$40 billion, mostly driven by an increase in subscription-based game revenue.
• Handheld spending should drop 20% this year to less than US$3 billion due to waning interest in Nintendo Switch Lite, partly offset by rising interest in Steam Deck and other gaming handhelds.
APAC markets are the main drivers of revenue growth across mobile, PC and Mac
• South Korea recently accounted for the gains in market share for mobile spending in APAC. Brazil, Turkey and Mexico led growth in Rest of World.
• Interest in Switch Lite declined significantly in Japan, largely due to the Nintendo Switch OLED version, which continues to account for a larger share of total Switch spending. Handheld console game revenue fell in all regions.
• PC and Mac gaming gained share YoY, partly because of an increase in subscription-based game spending. This rise also benefited from poor Rest of World results stemming from global conflict and inflation.
• Home console share changes were driven by stepped-up PS5 and Xbox Series X/S spending in North America and sub-par Rest of World results due to the war in Ukraine, inflation-related issues in some key markets, and related concerns.
Key takeaways to drive growth In 2023
• Mobile is still the primary driver of growth for digital games consumption despite a softening in 2022, cementing its role as the world's preferred form of gaming, and central to a robust cross-platform experience, making it more critical and challenging to stand out.
• Mobile has enabled the democratisation of gaming—allowing for every type of gamer to gain access to their own niche, whether it’s a specific subgenre from hyper casual to match-3 to core games like open world adventure titles. Mobile gaming appears to be setting the stage for the “new gamer”, which is the most inclusive cohort yet.
• Games that have performed well in H1 2023 are varied, including the launch of a board game turned on-the-go mobile experience, a highly anticipated RPG release building on the popularity of genre-defining Genshin Impact, a savvy title disrupting a stable Match-3 market in under three years, and a cross-platform IP franchise based on the world’s most popular sport seeing renewed fervor from tentpole live sporting events. Strong IP, capitalising on market momentum and leveraging events are common themes for success.
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