Author: Joel Julkunen - Head of Analytics at GameRefinery, A Liftoff Company
The mobile games market experienced its first year-over-year, sequential dip for the
first time in over a decade last year, with
revenue falling by 6.4% to $92.2 billion from 2021 to 2022. This is very different from how the market looked just a few years ago during the pandemic’s mobile games boom
when spending rose by over 20%. Still, there’s plenty to be positive about, as sequential growth is expected to resume from 2022 to 2023. Mobile marketers and game developers have risen to the challenge with innovative game design and advertising to attract new players.
So what’s changed? The end of the pandemic meant that many mobile gamers turned their attention back to the real world, and the impact of inflation is making them less likely to spend money when they do pick up and play their favorite mobile games.
There’s also the matter of Apple’s ATT (App Tracking Transparency), which since April 2021 has mandated iOS apps to ask users’ permission to track their activity across other apps and websites. This has impacted the quality of user data available to mobile advertisers,
with as many as 68% stating that marketing has become more difficult due to being unable to tailor ads to the personal interests of individual users.
With all the new changes, it’s never been more important for mobile game marketers to get the best value from their ad spend. The problem is that mobile gamers each have their own individual player motivations and genre preferences. Knowing where to focus your ad spend isn’t easy without detailed tracking information.
Thankfully, the insights available in Liftoff’s
2023 Casual Gaming Apps Report—based on our programmatic data spanning over 390 billion ad impressions and 16.7 billion clicks across 100 million installs—can provide some answers for casual game marketers.
Breaking down the casual market
Let’s start by discussing genre. Most mobile gamers play casual games, and our report also found ads placed in casual gaming apps to be the biggest driver of all gaming installs—regardless of genre—at 86.9%. We can see where we need to focus if we break the casual market down into the three most popular subgenres.
First up is puzzle, which includes many match-3 titles alongside trivia, solitaire, coloring, wordplay, and other games. Then we have lifestyle, which includes interactive story games such as Lovelink, those concentrating on home customization or dress-up, and several music and rhythm games. Last is simulation—these games put the player in control of almost anything, such as a theme park in RollerCoaster Tycoon, and include virtual pet sims.
Simulation, lifestyle, and puzzle games are popular and tend to perform well financially. They are competitive in terms of their CPI (cost per install) and ROAS (return on ad spend). However, the findings in our report indicate that the biggest opportunities are in simulation games, which offer the best user acquisition deal at $0.59 per install while providing an 8.5% return after seven days.
Mobile game developers should take note. By emphasizing simulation gameplay mechanics in their ad playables, they can improve their chances of conversion.
The subgenres driving the most installs
Equally important when it comes to subgenres, especially given today’s difficulties in acquiring users against deterministic data, is the different impact each has on user acquisition. That begs the question, which gaming subgenres drive the most users for other subgenres?
Our report traced installs of gaming apps to the apps where their ads are displayed and found that puzzle games are one of the biggest install drivers at 31.3%, which is to be expected given their popularity. Ads in hyper casual games also remain a significant driver of installs at 32.3%, although it remains to be seen how long this will last given the category’s
steady decline.
Comparatively, ads in simulation and lifestyle games make up a smaller proportion of the mobile market, meaning they drive fewer installs at around 9% each. As you move away from casual and look at mid-core—which includes shooters, strategy games, and RPGs—the impact drops significantly to 3.3%.
Despite this, there are some gains to be had, as these smaller genres generally offer much better CPI and ROAS due to less competition from other titles on the market. Mobile marketers should also pay close attention to player motivations. If a lot of users come from ads in a specific type of game, playables should be tailored to appeal more to that audience. Mid-core games, with their smaller audiences, stand to benefit significantly.
Many mobile marketers simply focus on similar games to theirs to find users, but one of the best ways to take advantage of these install rates would be to diversify their strategies. In our report, we took a closer look at match-3 games and found a lot of crossover with other genres, such as word games (11.2%) and lifestyle (13.1%).
Similar games would benefit from targeting multiple genres and subgenres with their ads to maximize their reach.
Key trends for casual game marketers on mobile
As the mobile gaming market grows more challenging and competitive, developers have responded with notable innovations. Here are a few new trends driving revenue for the casual gaming market.
One trend is the rising popularity of merge games, where players drag and combine different items. Developers have found they can easily combine the straightforward gaming mechanics of merge games with other meta layers to bring new experiences to their players. For example, the story-driven merge game Gossip Harbor combines its merge-2 mechanics with a strong narrative focus to keep players coming back. Mid-core titles like Top War have also introduced merge gameplay to attract casual gaming audiences.
Another genre that is making waves is hybrid casual. We already briefly mentioned how hyper casual is dwindling in popularity, so much so that it's fallen from around 50% market share in Q1 2021 to just over 30% in Q1 2023. This has been mainly caused by market oversaturation, as well as the pandemic and IDFA. Many hyper casual developers are integrating more complex mechanics from mid-core genres into their titles to offer players something new.
Genre crossover has also become popular across the casual games market, with around 23% of the top 200 grossing casual games now featuring minigames. These engage users by offering them new experiences that differ from core gameplay loops, both as part of events and as permanent additions. For example, the tycoon-exploration game Family Farm Adventure primarily revolves around building a farm and fulfilling orders but has steadily introduced minigames incorporating features such as archery and platforming.
Marketers often feature minigames in ad campaigns to acquire new users. For example, a 4X strategy title could introduce a minigame with merge mechanics and create a version for playable ads. This will likely widen their audience.
Summary
If mobile game marketers and developers hope to succeed in this challenging climate, they need to use everything at their disposal to get the best value out of their ad spend. That means knowing where the best opportunities lie in terms of player motivations, demographics, and genre, as well as being aware of the latest trends proving to be a big hit with casual gamers.
Our
2023 Casual Gaming Apps Report is a great place to start, but here are the main takeaways:
- Simulation games have the lowest CPI (cost per install) at $0.59. By comparison, lifestyle players cost over twice as much to acquire at $1.32 but offer a similar return after seven days at 8.3% (compared to 8.5% for simulation).
- Despite their dip in popularity, hyper casual games are still the most significant driver of installs across all genres at 32.3%, closely followed by puzzle games at 31.3%.
- When comparing CPI, Android costs an average of $0.63 compared to $2.23 for iOS. Despite the cost margin, D7 (day seven) ROAS (return on ad spend) rates are similar between the two platforms, with iOS offering a slightly better return on D7 at 7.8% compared to 7% on Android.
- North America has the highest CPI worldwide by far at $3.59, which is over three times as much as the CPI for Europe, the Middle East, and Africa, but it also has the highest D7 ROAS at 8.1%. Comparatively, Latin America has the lowest CPI at $0.55 per install, although it also has the lowest D7 ROAS at 4.8%.
- Non-merge and mid-core games are integrating merge mechanics, while hyper casual games are becoming hybrid casual. Marketers should keep a close eye on the hybrid casual genre and which gameplay mechanics are trending to consider how these can be incorporated into ad playables.
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