Gaming app install ad spending reaches $26.7 billion

More Game App Marketers Prioritize Profit Over Growth in 2023 as Economic Uncertainty Impacts Market

AppsFlyer has released its State of Gaming App Marketing 2023 report, an in-depth report on the most important gaming trends for app developers, marketers and game studios to use in a year of challenging macro trends, including a new era of privacy.

As the post-Covid era unfolds, a digital slowdown, i.e. a return to pre-Covid conditions, is taking place. While the effects are becoming more apparent in metrics such as app installs by consumers, the gaming app economy has still shown resilience, with nearly $27 billion in ad spending by gaming marketers and developers in 2022 to attract new users. to get Overall, Android game app installs increased slightly by 8% compared to 2021, while iOS game app installs decreased slightly by 5%. Based on ad spend, the US remains the largest target market for game app marketers by a significant margin, followed by Japan, South Korea, Germany and the UK.

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“As game marketers continue to navigate the changing economic environment, along with privacy changes, particularly on iOS, they face new challenges and opportunities for their app marketing efforts.”

“If 2021 and the first quarter of 2022 were the golden age of gaming, in the second half of 2022, and especially in 2023, marketers, developers and studios will have to overcome the challenges of using highly focused, effective strategies to inspire loyal, valuable players,” he said. Shani Rosenfelder, Director of Market Insights at AppsFlyer. “Evolving marketing budgets and declining consumer spending in some genres means game companies are forced to prioritize profit over growing player numbers. Despite the obstacles, however, mobile gaming remains a profitable powerhouse with close to three billion players worldwide. Marketers will continue to succeed by placing greater emphasis on modern measurement capabilities, using techniques that deliver an engaging experience while respecting user privacy, and further strengthening remarketing and owned media channels to drive cost-per-installation (CPI) growth. in order to counterbalance it. They also need to dive deep into Apple’s complicated yet promising SKAN 4.0 and invest more in campaigns outside the US, as the game is truly a global phenomenon.”

When it comes to gaming app revenue, the State of Gaming report reveals that consumers spent the most on in-app purchases (IAP) in role-playing games and social casino games (not real money games). Purchases in these game categories declined mainly in the second half of 2022, resulting in an overall 7% decline in IAP revenue compared to the first half of the year. The economic downturn appears to have had a greater impact on consumer behavior in high-IAP genres, role-playing games and social casinos, than in other categories such as match or puzzle games, which rely more on micropayments. In-app advertising (IAA) remains the strongest driver of revenue for hypercasual, match and simulation games, although IAA revenue in most genres also declined towards the second half of 2022.

Key insights from the state of gaming app marketing in 2023:

• $26.7 billion in total gaming app install ad spending in 2022 worldwide. Almost half of the US accounts for $12.2 billion thanks to the high-volume and high-cost media environment; Japan is a distant second with nearly $2 billion in spending.
• Globally, Android game app installs rose slightly in 2022, while iOS game app installs showed a slight decline. There was one 8% year-over-year growth in total app installs for Android games. The -5% year-over-year install decline on iOS reflects the continued challenge facing iOS app marketers following Apple’s privacy changes (despite the improvement from the previous -13% year-over-year 2022-2021 compared to data). The United States, still considered the most important market for game app marketers, saw a 19% increase in Android app installs in 2022 and a -1% decrease in iOS game app installs compared to 2021.
• The second half of 2022 in particular was a struggle for in-game purchases with the economic uncertainty of the market. Overall, in-app purchase (IAP) revenue was down -7% in H2 2022 compared to H1 2022, with iOS down -13% and Android down -6%. Overall, in-app purchases for Android game apps fell -14% year-over-year (YoY), while iOS fell -1% year-over-year. This was largely due to a decline in the role-playing and casino game genres, which typically have a high percentage of in-app purchases, and where the economic downturn appears to have impacted consumer spending.
• The categories with the highest growth in 2022 compared to 2021: 48% growth rate for Android casino games, 3x more than second place Hypercasual and 5x higher than puzzle and role-playing game (RPG) growth rate. Casino games led growth on the flagship iOS site, up an impressive 17%.
• The cost per install on iOS continues to rise: iOS CPI increased 88% from Q1 2021 to Q4 2022 at $3.75 per install as iOS marketers continue to accept high prices to acquire valuable Apple users. Annual exchange rates show a 35% jump.
• Marketers are increasingly taking advantage of owned media channels: As marketers strive to get more value out of their budgets, the use of proprietary media strategies such as push notifications, in-app messages, and cross-promotion continues to grow. This resulted in a significant year-over-year increase in owned media conversions of 16% on iOS and 34% on Android.

“As gaming marketers continue to navigate the changing economic environment and privacy changes, particularly on iOS, they face new challenges and opportunities for their app marketing efforts,” said Adam Smart, Chief Product Officer, Gaming. “IOS privacy restrictions limit marketers’ ability to leverage user-level data, which used to be the cornerstone of linking campaign performance to new user acquisition. However, despite significant increases in media costs and measurement challenges, game apps continue to invest heavily in acquiring high-quality players on iOS and will not shift those resources to Android, even if the approach attracts fewer users overall. This places greater emphasis on the use of privacy-enhancing technology and data cleanrooms in 2023 and beyond, and benefits those who can use accurate and comprehensive data to make the most up-to-date decisions about where, when and how to invest. the budget optimally. in a way that attracts and retains the most valuable players.”

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