While the economic effects of the Covid pandemic and the war in Ukraine are taking a toll on ad budgets worldwide, the gaming app economy has been remarkably resistant. Developers and game marketers invested nearly $27 billion in ad spending in 2022, according to the latest State of Gaming App Marketing for 2023 report from AppsFlyer.
Android up, iOS down
During Covid, game developers and marketers were on a high. During the second half of 2022, interest in gaming waned somewhat as users returned to their normal lives.
But despite economic slumps, Android game app installs rose 8% compared to 2021 while iOS declined 5% in 2022.
The drop in iOS installs reflects the challenges associated with Apple’s privacy changes.
Year-over-year % change in overall gaming app installs: 2019-2022
Source: AppsFlyer
The US is still the most important market for gaming app marketers and saw a 19% growth in Android app installs in 2022, compared to a 1% drop in iOS app installs.
Shani Rosenfelder, Director of Market Insights at AppsFlyer reveals that “Evolving marketing budgets coupled with drops in consumer spending across some genres mean game businesses are compelled to prioritize profits over growing the sheer size of their numbers of players.”
Consumers are spending less in-app
In light of the economic challenges, consumers are spending less and that has an effect on app spending. There was a 7% drop in overall in-app purchases during H2 2022 compared to H1. Spending on iOS was down 9% compared to 4% on Android.
In-app purchases on Android were down 14% while iOS was down 1%. The decline was driven by Role Playing and Casino genres which tend to have higher rates of in-app purchases.
Year-over-year % change in overall gaming app installs by genre
Source: AppsFlyer
Casino grew 48% on Android, which is 3x more than hyper-casual and 5x higher than puzzle and role-playing games.
What game marketers can do
There was a notable 88% increase in CPI from iOS between 2021 to 2022, reaching $3.75 per install. Marketers are shifting to owned media channels such as push
notifications, in-app messages and cross-promotion to get more out of their budgets.
What’s interesting though is that despite these hurdles mobile gaming is a lucrative venture.
Gaming in-app advertising revenue by platform
Source: AppsFlyer
“Marketers will continue to succeed by putting more focus on modern measurement capabilities, utilizing techniques that deliver an engaging experience while respecting user privacy, and leveraging remarketing and owned media channels further in order to offset increases in their cost-per-installs (CPI),” adds Rosenfelder.
“Additionally, they will need to dive deep into the complex yet promising SKAN 4.0 from Apple, and invest more in campaigns outside of the United States, as gaming is truly a global phenomenon.”
Key takeaways
- Developers and game marketers invested nearly $27 billion in ad spending in 2022
- Android game apps installs rose 8% compared to 2021 while iOS declined 5% in 2022
- 7% drop in overall in-app purchases during H2 2022 compared to H1
