Global spending on mobile games falls 5% as high inflation causes market to cool

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  • Data.ai said Wednesday in its annual “State of Mobile” report that consumer spending on app stores in 2022 will total $167 billion, down 2% from the previous year.
  • Faced with economic constraints such as higher prices and cost of borrowing, people are cutting back on discretionary purchases. Gaming has come under particular pressure.
  • According to Data.ai, mobile game spending fell 5% last year to $110 billion.

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According to a report by app analytics firm Data.ai, spending on mobile games declined last year as consumers became more frugal with their purchasing decisions in response to rising inflation.

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Mobile game spending is set to drop 5% globally to $110 billion in 2022, Data.ai, formerly known as App Annie, said Wednesday in its “State of Mobile” report. The report also looks at the broader state of sectors such as mobile advertising, retail and social media apps.

Still, installs of mobile titles rose 8% to a record 90 billion for the first time, with so-called “hypercasual” titles taking the lead.

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“We are seeing this major theme that people are becoming more price sensitive and more fiscally conservative,” Lexie Sido, Head of Insights at Data.AI, told CNBC.

Faced with economic constraints such as higher prices and cost of borrowing, people are cutting back on discretionary purchases. Gaming has come under particular pressure.

Global sales of games and services, including console and PC games, were expected to grow 1.2% year-over-year in 2022 to $188 billion, according to a July research note from market data firm Ampere Analysis.

In recent years, the growth of mobile gaming has been the dominant story in the games industry, with major publishers betting big on mobile game developers.

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At the beginning of last year, take two Bought mobile gaming firm Zynga for $12.7 billion. In 2016, King, the creator of Candy Crush Saga, was bought by activism blizzard for $5.9 billion. US tech giant MicrosoftMeanwhile, Activision is banking on continued growth in mobile gaming with its proposed $69 billion acquisition of Blizzard.

That growth has been challenged recently by several macroeconomic headwinds, however, including rising costs of living and higher interest rates.

In 2020, Microsoft And Sony Launched their respective next-gen gaming consoles, giving more competition to mobiles.

Last year also saw a return to face-to-face activities and a normalization of travel rules from the height of the Covid-19 pandemic in 2020 when much of the world was stuck at home.

Non-gaming apps proved more resilient in 2022, with the value of purchases in such apps increasing 6% year-over-year to $58 billion, according to Data.ai research. Growth was primarily driven by subscription and in-app purchases across streaming platforms, dating apps and short-form video services such as TikTok.

Downloads of non-gaming apps grew 13% over the previous year to 165 billion.

This did little to offset the decrease in mobile game spending, however, as spending on the App Store fell 2% to $167 billion. The figures include installs on third-party Android marketplaces in China, where Google’s official Play app store is banned.

With recently introduced privacy measures, the market faces more hurdles in 2023 apple More pressure is expected on app makers.

Apple launched its App Tracking Transparency feature, which prompts users to ask if they want to be targeted by advertisers in 2021.

Data.ai expects global app spending to drop 3% to $107 billion this year, especially on games, as a result of a decrease in disposable income and changes to privacy.

Google Apple plans to adopt similar privacy restrictions that would limit tracking of Android apps.

“With the limitations of your targeting capabilities from an advertiser’s point of view, games make it tough to attract the big whales who spend the most,” Sido explained.

causes trouble for change meta, Facebook and Instagram are the owners of the social media platforms. Meta’s chief financial officer David Weiner previously warned that Apple’s ATT could lose $10 billion in sales in 2022. The company will generate most of its $117.9 billion revenue in 2021 from advertising sales.

Meta is facing stiff competition from rival firm TikTok. According to Data.ai, the Chinese-owned short video app reached $6 billion in total lifetime spend last year and is only the second non-game app after Tinder to achieve that milestone.

Sido said the impact of Apple’s privacy measures had not yet shown up in 2022 numbers — with overall spending on both iOS and Google Play declining — but was likely to have a much bigger impact this year.

Despite the reduction in overall spending in 2022, there was “more demand for mobile service than ever before,” Sido said. Data.ai said for the first time app downloads rose 11% to 255 billion, while hours spent in apps rose 9% to a record 4.1 trillion.

Credit: www.cnbc.com /

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