Weekly Gaming Reports Recap: February 26 - March 1 (2024)
My mobile gaming market overview in 2023; data.ai comprehensive look at the mobile gaming market; Circana shared the US market status in January.
Editorials:
Mobile Gaming Market in 2023 - not as bad as you want it to be
Reports of this week:
Circana: The US gaming market in January 2024 grew by 15%
data.ai: Mobile Gaming Market in 2024
game: Only 12% of German gaming companies are confident in the growth of the gaming market in 2024
StreamElements & Rainmaker.gg - State of the streaming market in January 2024
Shorooq Partners: State of the Gaming Market in MENAP and globally in Q4 2023
The Game Hub Senegal: Video Games in Africa
Newzoo: Top-selling PC/Console Games in the USA and UK in 2023
Sensor Tower: IP Collaborations in the Japanese Mobile Market in 2023
[Editorial] Mobile Gaming Market in 2023 - not as bad as you want it to be
In 2023, we heard a lot about the gaming industry experiencing a crisis. In particular, many people talk about there being fewer new games, and those that do come out earn less. It became interesting to verify this with numbers to have a slightly more objective view of the situation.
Downloads
The number of new projects in the top 1000 by downloads has remained roughly consistent since 2021. However, the number of new games by downloads falls short in the years 2021-2023 compared to the figures for 2019 and 2020.
The number of new projects in the top 100 by downloads has indeed decreased over the years. In 2023, there are three times fewer projects in the top 100 compared to 2020 and 2019. It's harder for new games to break into the top ranks.
The number of new projects in the top 10 by downloads has remained relatively unchanged since 2020. Becoming a global hit is very challenging - only three projects in four years can boast such an achievement.
Here are the new entries in the top 100 by downloads for the year 2023:
5th position (151.7 million downloads) - Block Blast! - a block puzzle game, a variation on the theme of Tetris. Hungry Studio developers have never released a game as popular as this before.
14th position (107.5 million downloads) - Monopoly GO! - a game that needs little introduction, a modern interpretation of the classic board game by Hasbro. Scopely, the developer has several world-class hits under its belt.
26th position (90.1 million downloads) - Attack Hole - an arcade game where you control a black hole and consume objects. Developed by Black Hole Games and published by Homa, a global leader in publishing hyper-casual and hybrid-casual games.
39th position (76.5 million downloads) - Burger Please! - a tycoon game about managing a burger restaurant. Released by Supercent, a successful hyper/hybrid-casual publisher.
45th position (72.3 million downloads) - Avatar World: City Life - a children's life simulation game developed by Israeli company Pazu Games, specializing in such games.
50th position (70.1 million downloads) - Real Car Driving: Race City 3D - an open-world racing game with various gameplay modes. Developed by Botanica Global, which has a dozen similar genre games under its belt.
74th position (57.9 million downloads) - Ramp Car Games: GT Car Stunts - a casual racing game about tracks with obstacles. Developed by Fun Drive Games, with 13 other racing genre games.
81st position (54 million downloads) - Build A Queen - a viral runner game by Supersonic Studios.
84th position (52 million downloads) - Snake Run Race・3D Running Game - another runner game, this time about a snake. Developed by Freeplay, a popular developer and publisher of hyper/hybrid-casual projects.
92nd position (49.4 million downloads) - Slow Mo Run - an arcade game where you overcome various obstacles by controlling a character's body parts. Developed by Supersonic.
100th position (47.5 million downloads) - Vehicle Masters - an arcade driving simulator. Developed by SayGames, another popular hyper/hybrid-casual publisher.
A few conclusions:
In 2023, only Hungry Studio, a relatively unknown developer, managed to enter the top 100 with a new game. All other projects were from market leaders.
Racing games and runners gather a large amount of viral traffic. In 2023, people were still interested in games in these genres. However, the value of this traffic is questionable - for example, Real Car Driving: Race City 3D received 35% of downloads from India and 8% from Brazil.
Hyper/hybrid-casual projects continue to dominate the top 100 by downloads.
Revenue
Disclaimer:
Only calendar years are taken into account. For this reason, for example, in 2020, Genshin Impact did not make it into the top 10 by revenue. The game was released on September 28 and simply did not have enough time to earn sufficient money.
Only sales in Google Play and the App Store are considered. Sales in 3rd-party stores in China are not taken into account, nor are payments outside of platforms (top-ups on websites).
For games available only in China, information is only provided for iOS.
Some projects in the top 100 were released at the end of December 2022. I included them in 2023.
The number of new projects by revenue in the top 1000 has been slowly declining since 2019, indicating increasing competition.
However, in 2023, there were 7 projects released that made it into the top 100 by revenue. An interesting point here is that 4 projects from the list in 2023 were not available outside of Asia.
Surprisingly, 2023 was a breakthrough year for the mobile industry in terms of global hits. Two projects made it into the top 10 - Monopoly GO! and Honkai: Star Rail. This hadn't happened in 5 years.
According to AppMagic data, the top 1000 games in the mobile market earned $47.6 billion in 2023. Have a look into how the absolute market volume has changed (from 2021 - based on the top 1000 highest-earning projects - it is decreasing), as well as how the revenue distribution has changed in different segments.
Here are the newcomers of 2023 in the top 100 by revenue:
8th position ($659 million) - Honkai: Star Rail - a new RPG (jRPG?) from miHoYo, which applies the well-known gacha formula to a new core gameplay. All of this with stunning production quality.
9th position ($645 million) - Monopoly GO! - the game launched slightly later than Honkai: Star Rail, so it didn't manage to surpass it in revenue. Officially, Scopely announced that the game broke $1 billion in revenue (please note the disclaimer).
18th position ($358.2 million) - Justice Online (逆水寒) - an MMORPG from NetEase, currently only available in China. One of the project's features is the use of AI - it is used to simulate live players and dialogues with NPCs.
34th position ($260.1 million) - Whiteout Survival - a 4X strategy game from Century Games, launched in combination with Frozen City. One of the most interesting cases in the market recently, where one company releases two products in the same setting with the same assets but in different genres - and for different audiences - with a gap of a couple of months.
67th position ($148.9 million) - Changa Fantasy (长安幻想-送周年宠) - another MMORPG only for the Chinese market, based on the manga series of the same name.
95th position ($102.8 million) - Night Crows (나이트 크로우) - an MMORPG released only in the South Korean market. The game will be launched on the Western market in early 2024, with an unusual feature - integration with Web3.
100th position ($96.5 million) - Crystal of Atlan (晶核) - the third MMORPG in the list for the Chinese market. The game closely resembles Genshin Impact in appearance and is currently undergoing closed beta testing for Western markets.
Based on the dynamics of new products appearing in the top 100, it's evident that 2023 wasn't as bad as initially perceived. However, it would be appropriate to conduct a retrospective comparison, which I'll leave for future issues.
Out of the top 100 by revenue in 2023, 23 projects were earned exclusively in Asia. These projects are either from China (like Justice Online), Japan (Monster Strike), or South Korea (Night Crows).
This graph shows the revenue share of projects from different years. The share of older projects is very large. Projects released since 2020 represent only 29.9% of the market. However, it is noticeable that the share of projects released in 2023 is the highest in the past couple of years. This is attributed to the breakthroughs of Honkai: Star Rail and Monopoly GO!.
Not long ago, Michail Katkoff from Deconstructor of Fun released an essay on the future of the mobile gaming industry. I recommend reading this article, and I also want to publish a graph from data.ai on the number of new mobile games released and the total number of mobile games on iOS.
It's an interesting situation. If we compare the numbers of new games in the top 1000 with the total number of releases, it turns out that in 2023, the Success Rate of mobile games was higher than, for example, in 2022. However, there might be a calculation issue as I accounted for games on Google Play and iOS, while data.ai provides only figures for iOS.
In 2023, projects for Asian markets account for 25.1% of the revenue in the top 100 - $6.87 billion. Many of them, probably, will never reach international markets and will only cater to local audiences. However, out of the 7 top projects released in 2023, 4 launched exclusively in Asia. Some of them, as mentioned earlier, will soon enter international markets. We'll be waiting for their results.
Separately, I was interested in examining how much games based on intellectual property (IP) earn. I wanted to note projects based on non-gaming IP (movies, anime, manga), as well as all of them combined.
There's a subjective feeling that the number of new projects based on intellectual property (IP) in the mobile market is increasing. The trend of major PC/console IPs coming to mobile devices is particularly noticeable. Just in 2024, a mobile game based on Devil May Cry has already been released; several projects from Ubisoft are expected to be released soon; the EA Sports FC franchise is expanding with a new project; Warframe is coming to mobile devices; and Bethesda is preparing The Elder Scrolls: Castles. Just recently, Age of Empires was announced for mobile devices.
Utilizing popular IPs allows developers to reduce traffic costs, attract organic audiences, and engage existing fan bases. In conditions of limited user tracking possibilities, I believe that there will be more and more IP-based projects in the gaming mobile market over time.
Overall, the mobile gaming market has become more competitive. Releasing a popular new game is becoming increasingly difficult. There's a trend of decreasing new games by downloads (perhaps fewer hyper-casual games?), and it's noticeable that the share of new projects in the overall revenue composition isn't that significant.
It would also be fair to note that analytical platforms only allow us to see the revenue part of the equation. It's important to consider that in the post-IDFA era, the problem has become acquiring the right users, and user acquisition itself has become more expensive, which has overall reduced marketing effectiveness. This has impacted profitability. Many companies expanded their teams during market growth, which also led to increased expenses. Furthermore, heightened product quality requirements necessitate more resources for development.
However, speaking about the market as a whole, I disagree that 2023 was the worst year for the mobile market in a long time. Rather, in 2023, many postponed risks materialized. Market correction continued; companies that raised funds in 2020-2021 ran out of money; studios began adjusting their P&L and removing unprofitable divisions; the global recession has compelled users to pay more attention to even cheaper forms of entertainment (videos and short videos).
In terms of volume, the mobile market in 2023 exceeded the figures of 2019. Additionally, we don't consider advertising revenue, and the recent report from data.ai indicates another increase in mobile ad spending. Companies will pay more attention to optimization and smart planning. Both AI and painful experiences from the previous (and current, for that matter) year should help with this. All of this should lead to a healthier overall situation.
There's still a huge problem with launching new projects in the mobile market. Organic reach is almost dead, and mobile platforms are not in a hurry to address the situation. This leads to the situation where it's practically impossible for small developers without big budgets to launch any successful product on mobile devices. The level of hits in 2023 makes one ponder the requirements for successful projects. It seems that marketing departments of large companies have to adapt and learn (or return to?) classical marketing - using not only Performance tools but also less predictable channels.
Creating successful mobile games has always been challenging, and the situation has somewhat worsened recently. However, - and examples prove it - new major projects are being released, finding their audience, and earning their millions. This means that anything is possible.
In short, the main conclusions are:
In 2023, entering the market without an expensive and high-quality product is challenging. All new projects on the list are the result of many years of work by large and already successful teams. However, the situation hasn't changed much over the past few years. Therefore, saying that "it was better before" would be unfair.
In 2024, Asian hits from 2023 will enter the Western market. It will be interesting to see how they perform.
The majority of new games on the revenue list are in the RPG genre. However, the high monetization potential is offset by the high cost of development and increasing competition. It's possible to spend a lot of money and "miss the audience."
Games based on IP licenses and collaborations are something to learn from. This is one way to solve user acquisition problems.
The market crisis everyone talks about is largely the result of the overheated market during the coronavirus pandemic. 2023 turned out to be heterogeneous - there was both a general decline in new revenue-generating projects in the top 1000 and the emergence of global hits in the highest quantity in the last 5 years.
Circana: The US gaming market in January 2024 grew by 15%
Overall market condition
American users spent $5.069 billion on games in January 2024. This is 15% more than the previous year, but there is a nuance - in 2023 there were 4 weeks in the month, and in 2024 there were 5.
Users spent more on games on consoles, PC, and VR in January 2024. Revenue from mobile games grew by 5%.
Console sales in the USA in January 2024 amounted to $378 million. A decrease compared to January 2023 was 4%.
PlayStation 5 was the best-selling console in January 2024; Nintendo Switch came in second. Xbox Series increased its dollar sales but remained in third place.
After 39 weeks of sales, PS5 in the USA sells 7% better than PS4 and 68% better than PS3.
Accessory sales in January amounted to $246 million - 45% more than the previous year. Spending on gamepads grew the most (by 50%), with DualSense Edge being the best-selling accessory.
PlayStation Portal continues to sell actively, but Matt Piscatella notes that production volumes are not very high.
Game sales
5 new projects appeared in the top 20 by sales in January. Tekken 8 ranked second; Suicide Squad: Kill the Justice League ranked third; Persona 3: Reload ranked fourth; Like a Dragon: Infinite Wealth ranked 7th; Prince of Persia: The Lost Crown ranked 13th; Juijutsu Kaiden: Cursed Clash ranked 19th.
On PlayStation, Call of Duty: Modern Warfare III topped the sales chart. Tekken 8 came in second; Suicide Squad: Kill the Justice League came in third.
Gran Turismo 7 became the second best-selling game in the series in the USA. Currently, it is only surpassed by Gran Turismo 3: A-Spec.
In January, the unchanged leaders in MAU on PS5 are Fortnite; games from the Call of Duty series and GTA V.
Evil West, thanks to being added to PlayStation Plus, took the 7th position in MAU.
On Xbox, the picture is similar, with Palworld taking third place.
Interestingly, Palworld is not in the sales charts on Xbox - apparently, a large portion of people took the game in Game Pass. Call of Duty: Modern Warfare III is at the top of the sales chart, Madden NFL 24 is second, Suicide Squad: Kill the Justice League is third.
Sales on Nintendo remain stable. Super Mario Bros. Wonder leads, Hogwarts Legacy is in second place, and Mario Kart 8 is in third.
On Steam, Palworld is in first place in MAU. Lethal Company is in second place, Counter-Strike 2 is third. It's surprising that Baldur’s Gate III - without multiplayer functionality - maintains the fourth position.
Sensor Tower notes that MONOPOLY GO!, Royal Match, and Roblox continue to lead in revenue in the USA. Among the newcomers to the top 10 in January are Township and Whiteout Survival.
data.ai: Mobile Gaming Market in 2024
data.ai presents revenue in Gross.
Revenue
In total, games earned $107.3 billion - 2% less than in 2022. Here, data.ai takes into account third-party Android stores in China.
The United States ($9.2 billion), South Korea ($5 billion), and Japan ($4.4 billion) are the largest countries in terms of revenue on Android. On iOS, the leadership belongs to the United States ($14.8 billion), China ($11.2 billion), and Japan ($8.4 billion).
The North American market saw a decrease in revenue by approximately 1% in 2023. The share of the APAC region decreased from 51% in 2022 to 49% in 2023. South Korea saw a revenue increase of 21% in 2023.
In 2023, there were 924 projects with annual revenue exceeding $10 million. 150 games surpassed the $100 million mark. Finally, 7 projects earned over $1 billion in 2023. 2021 remains the best year in terms of revenue in the market.
Royal Match and Gardenscapes earned over $1 billion annually for the first time.
Mobile companies headquartered in China earned $27.3 billion in 2023. This constitutes a quarter of the entire gaming industry volume.
Player Behavior
User spending on games in Tier 1 countries correlates with real income levels. People are willing to reduce game spending when their income decreases.
Japan leads in monthly spending on iOS games - $10.76. South Korea leads in Google Play figures - people spend $11.38 on games per month. However, data.ai notes that monthly spending across almost all regions has returned to pre-pandemic levels.
In 2024, many people are considering optimizing their budgets.
Younger generations prefer sandboxes, racing, and RPGs. Older players prefer Match 3, solitaire, and slots.
Female are more likely to play Match 3 and word games, while men are more inclined towards Team Battle RPGs, MOBAs, and sports games.
Downloads
The number of game downloads decreased by 2% compared to the previous year, totaling 88 billion. This is the first decline since 2020.
India (9.4 billion), Brazil (4.3 billion), and Indonesia (3.3 billion) lead in downloads on Google Play. On iOS, the leaders are the United States (2.1 billion), China (1.2 billion), and Japan (355 million). However, iOS downloads in the United States have been declining for the third consecutive year.
Advertising Market
Spending on mobile advertising in 2023 amounted to $362 billion. data.ai predicts that in 2024, spending will increase to $402 billion. This indicates that the influence of advertising revenue on mobile devices is growing.
Gaming Market Situation
data.ai notes that the number of new games in the top 1000 by downloads has been decreasing since 2020. In some Asian markets (such as the United States and South Korea), there was a slight increase in 2023. However, in most cases, new projects receive fewer downloads.
Revenue from old projects continues to dominate a large part of the gaming market, and user spending on new projects has not yet exceeded expenses on old ones in any of the data.ai markets listed, except for South Korea and Singapore.
However, positive changes are visible in several markets - Canada, China, Vietnam, and the United Kingdom. The ratio of revenue from new games to old ones has begun to change in favor of the former.
Trends by genre from data.ai have been already covered here.
game: Only 12% of German gaming companies are confident in the growth of the gaming market in 2024
12% of those surveyed believe that the gaming market will grow. 34% are neutral, and 54% are confident that the situation in the gaming market will worsen. In 2023, there were four times as many positively inclined respondents.
At the same time, half of those surveyed are confident that their business will grow in 2024. 19% are skeptical about this prospect, while the rest are neutral. The percentage of negatively inclined respondents doubled since 2023.
In 2024, 41% of respondents plan to hire people. 22% believe they will have to downsize their staff (almost four times more than in 2023). 37% remain neutral for now.
StreamElements & Rainmaker.gg - State of the streaming market in January 2024
Twitch grew by 6% in terms of viewership in January 2024 compared to the previous month, reaching 1.902 billion hours watched. This is a record for the past 3 quarters.
The number of hours watched per day has been increasing since September 2023. In January 2024, people watched 61.4 million hours of content per day.
Palworld - the first hit of 2024 - received 59 million hours of views in January 2024.
Grand Theft Auto V - the most viewed game in January. It had 179 million hours (+11% compared to the previous month); in second place - League of Legends - 101 million hours (+52%); in third place - Escape from Tarkov - 82 million hours (+180%).
fps_shaka from Japan - the top streamer of the month. He specialized in GTA V (209 hours); but also played Palworld (50 hours) and Street Fighter 6 (50 hours).
Shorooq Partners: State of the Gaming Market in MENAP and globally in Q4 2023
Global Market Trends
In Q4 2023, the number of lawsuits increased by 15%. Epic Games continues to battle against tech giants; Nexon was fined $8.9 million for misleading information about item drop rates.
Indie developers thrive on PC. They account for 40% of all copies sold and 30% of total revenue. When considering the entire market with other platforms, indie developers only hold 5%.
Movies based on gaming IP earned over $1.4 billion in 2023. The main success was The Super Mario Movie; Uncharted and Gran Turismo also performed well.
MENAP Market Trends
The UAE aims to become a global gaming hub by 2033. The plan includes creating over 30,000 jobs in Dubai alone, and gaming companies' contribution to the emirate's GDP should exceed $1 billion.
It is expected that the MENAP region will reach $2.8 billion in revenue by 2026. As of 2022, the market size was $1.8 billion.
The user base is forecasted to grow from 67.4 million to 87.3 million by 2026.
The Kingdom of Saudi Arabia is actively investing in the gaming industry. By 2030, the country aims to create over 40,000 jobs; the Savvy Games Fund has over $30 billion of unallocated budget. The country is building the futuristic city of Qiddiya City, where 30 gaming companies and 25 esports teams are expected to be located.
In Q4’23, there was increased activity from venture investors in the MENAP region. The most notable deals were Farcana ($10 million - developing a Web3 shooter); Rize.gg ($430,000 - an e-gaming platform); GAM3S.GG ($2 million - a Web3 platform).
The Game Hub Senegal: Video Games in Africa
The survey was conducted in Senegal, Ivory Coast, and Cameroon. Interviews were conducted with 785 people from July 21, 2023, to August 28, 2023. The majority of respondents (over 80%) were male.
Android is the main platform in Senegal (81%), Ivory Coast (89%), and Cameroon (96%).
Around 80% of residents of the surveyed countries play games at least a couple of times a day. For example, 22% of Senegalese residents play more than 5 times a day.
Only 24-25% of residents of the listed countries play games for more than one hour a day. The majority play for up to 30 minutes a day.
The majority of players play offline (66% in Cameroon; 57% in Ivory Coast; 54% in Senegal).
Almost half of the residents of Cameroon, Ivory Coast, and Senegal download fewer than 5 games per year.
Call of Duty, "soccer," Garena Free Fire, Ludo, and Temple Run are the games mentioned by residents when asked about the last game they downloaded.
More than 60% of the local population have never played games by African developers. The main reason is that they have never heard of them.
52% of Cameroonians, 57% of Ivorians, and 40% of Senegalese residents spend money on games.
Interestingly, only 15% of users paid with a credit card. The most popular payment method is through mobile money (43%). Next is Airtime Money Transfer (22%) and buying a top-up card in a store (21%).
Mobile Airtime Money Transfer is a prepaid phone balance top-up.
Residents of Cameroon, Ivory Coast, and Senegal are united in their preference for F2P (Free-to-Play) games and reluctance to pay for games. However, in Senegal and Ivory Coast, a large percentage of respondents (30% and 28% respectively) said they were willing to pay for games on a subscription basis.
51% of residents of these countries noted that they did not pay for games because they did not have a credit card. The next most popular response (14% of respondents) was "I don't like to buy."
Regarding motivation, the majority of players from these countries play to relax and unwind.
Newzoo: Top-selling PC/Console Games in the USA and UK in 2023
In terms of the number of copies sold, the top three leaders are Hogwarts Legacy, Diablo IV, and Call of Duty: Modern Warfare III. Grand Theft Auto V, an evergreen, is in 9th place.
Newzoo provides interesting statistics on the revenue dynamics of the top five best-selling games. It can be seen that NBA 2K24 started slightly worse than its competitors, but its tale sales are better.
It is important to note that Newzoo aggregates revenue data for Call of Duty: Modern Warfare III together with Call of Duty: Modern Warfare II and Warzone 2.0 due to the consolidation of all games in the series into one distribution.
Sports games sell differently in the USA and the UK. In the USA, the 5th and 6th places in sales belong to NBA 2K24 and Madden NFL 24. In the UK, however, EA Sports FC 24 topped the sales chart.
Only one console exclusive made it into the top 10 in both the USA and the UK. This was achieved by The Legend of Zelda: Tears of the Kingdom.
Fortnite became the largest game in the USA and UK in terms of revenue from microtransactions. Following were Call of Duty: Modern Warfare III, FIFA 23, NBA 2K23, and EA Sports FC 24. Moreover, Fortnite earned 39% more than FIFA 23 in these markets.
The Sims 4 became the leader in revenue from DLC in the mentioned markets.
Sensor Tower: IP Collaborations in the Japanese Mobile Market in 2023
Major games in the Japanese market actively engage in IP collaborations. For example, Monster Strike alone had more than 25 collaborations in 2023.
Since 2014, Monster Strike has celebrated its birthdays together with other brands. The graph shows how such collaborations are reflected in downloads.
Japanese games mainly collaborate with anime. Popular IPs include Chainsaw Man, Attack on Titan, and Evangelion.
The Battle Cats from PONOS Studio has been actively collaborating with IPs since its release in November 2012. This helps the game steadily increase its MAU (Monthly Active Users) - in the fourth quarter of 2023, the game reached 4.8 million MAU in Japan alone.
IP collaborations help foreign games earn more in the Japanese market. In particular, Sensor Tower cites examples like Knives Out and Identity V from NetEase.