Weekly Gaming Reports Recap: November 27 - December 1 (2023)
Games are the best present for younger generations in the US; the gaming market in China returned to growth; AppsFlyer released its new index, highlighting the best mobile traffic sources.
Reports of this week:
AppsFlyer: Best sources of advertising traffic on mobile devices (Version 16)
DDM: Gaming Investment Market in Q3 2023
The ESA: Most American children want video games connected gifts for the New Year holidays
Niko Partners: The gaming market in China will grow by 5.2% in 2023
Shorooq Partners: The MENAP market will grow to $2.8 billion by 2026
Niko Partners: The markets of South Korea, Japan, and Chinese Taipei will grow to $30.8B by 2027
Nintendo FY'24 Q1-Q2 Report: Numbers and insights
AppMagic: Top Mobile games of November 2023 by Revenue and Downloads
AppsFlyer: Best sources of advertising traffic on mobile devices (Version 16)
To prepare the index, the company analyzed 11.5 billion organic installations from 75 sources from April to September 2023 in more than 30 thousand applications.
iOS
Apple Search Ads - the #1 traffic source on iOS. This applies to both the volume and quality of traffic.
Liftoff and Moloco - in second and third places, largely due to the quality of traffic.
Meta in fourth position. The channel works especially well for mid-core projects.
AppLovin is in fifth place on the chart, performing well for casual and hyper-casual projects.
Android
Google Ads - the main source of traffic on the platform. It shows the best results in every category except hyper-casual games and casinos - in these categories, Google Ads takes the second position.
Unity Ads took second place in the overall chart but lost positions in the volume of traffic. The channel works well for casual and mid-core projects.
ironSource significantly improved compared to the previous index, taking the third position (previously sixth). The channel works excellently for hyper-casual projects.
Meta took the fourth position. Through this source, it is good to acquire casinos, mid-core games, puzzles, and sports projects.
AppLovin lost 1 position in the overall ranking and took 5th place.
The full version of the index, with a breakdown by genres and regions, is available at the link.
DDM: Gaming Investment Market in Q3 2023
DDM includes blockchain transactions as well as AI startups.
The total volume of closed deals in the third quarter amounted to $7.1 billion. There were a total of 166 transactions in the quarter.
The volume is 769% higher than in the previous quarter, while the number of transactions decreased by 18%. The third quarter saw deals between Savvy Games Group and Scopyle, as well as SEGA and Rovio, generating the majority of the volume.
Private Investments
In the third quarter, 136 deals were made (20% less than the previous quarter) with a total volume of $965.4 million (36% more than the previous quarter). For the first time since the second quarter of 2022, the market has grown.
Most investments by volume were made in mobile studios (29%), PC/console studios (27%), and technology (26%).
According to DDM estimates, undisclosed transactions totaling $1 billion took place in the quarter.
Early-stage investments accounted for approximately 50% of the total volume and 65% of the total number of transactions.
Candivore ($100 million), Futureverse ($54 million), and Inworld AI ($50 million) were the largest private deals of the quarter.
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WeMade, Samsung, Andreessen Horowitz, Polygon, and BITKRAFT Ventures were the most active private investors of the quarter.
M&A
In the third quarter, 30 deals were made (9% less than the previous quarter) with a total volume of $6.1 billion (5569% more than the previous quarter).
Deals with Scopely and Rovio accounted for 92% of the total volume of the quarter.
The ESA: Most American children want video games connected gifts for the New Year holidays
The association surveyed children and teenagers aged 10 to 17 years.
72% of those surveyed would like something related to games as a Christmas and New Year gift. Following games were gift cards (70%), clothing and accessories (66%), and electronics (62%).
59% of girls and 86% of boys said they would ask for video game gifts during these holidays.
39% want a subscription to a gaming service as a gift; 38% - a console; 32% - accessories; 29% - in-game currency; 22% - a physical copy of the game.
32% of adults noted that they plan to buy things related to video games as a gift either for themselves or for acquaintances. Among parents, this percentage increases to 57%.
Americans plan to spend $485 on gifts related to video games this year.
More than 212 million Americans regularly play games.
Niko Partners: The gaming market in China will grow by 5.2% in 2023
Preliminary results for 2023
The market size will reach $47.76 billion. The 5.2% growth follows a 2.5% decline in 2022.
The number of players in the country in 2023 will reach 710.3 million, which is 1.63% more than in 2022.
Monthly ARPU (Average Revenue Per User) in China will reach $5.6.
Key growth factors this year include active government licensing; large user spending on already released games; and continued access of players to unlicensed games on PC and consoles.
As of October 30 this year, the government issued licenses for 844 games. In 2022, 512 licenses were issued, and in 2021 - 755.
Chinese companies reduced investments in foreign companies this year, focusing on the local market.
China is the world's largest esports market. There are over 400 million esports fans in the country, and the industry's volume is $445 million.
Forecast for 2027
It is expected that the Chinese market will grow to $56.7 billion in 2027, with an average annual growth rate of about 4.5%.
In 2027, there will be 734.6 million players in China, with an expected 1% growth per year.
Growth in the next 4 years, according to Niko Partners' forecasts, will be driven by AI content, the launch of new games, increased spending, and the growing popularity of esports.
Shorooq Partners: The MENAP market will grow to $2.8 billion by 2026
Newzoo presents market figures; for mobile projects - data.ai. MENAP stands for the Middle East, Africa, and Pakistan markets.
As of 2022, the MENAP market was valued at $1.8 billion. By 2026, it is forecasted to reach $2.8 billion. The average annual growth rate is 10%.
It is projected that the number of players will also actively increase - from 67.4 million in 2022 to 87.3 million in 2026. This is approximately a 5% annual growth.
Strategies ($374.1 million revenue from IAP), shooters ($270.5 million revenue from IAP), RPGs ($168.6 million revenue from IAP) - are the most popular genres in the MENAP region.
In the incubators of the MENAP region over the past year, there were more than 150 gaming companies. They attracted $10 million and earned around $4 million.
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Out of the 150 startups, 43.2% are gaming studios; 24.8% are developers of Web3 games; 20.8% are creators of gaming software and platforms.
Niko Partners: The markets of South Korea, Japan, and Chinese Taipei will grow to $30.8B by 2027
Current state as of 2023
The revenue of the gaming markets in the three countries, referred to as East Asia by Niko Partners, with PC, consoles, and mobile games in 2023 will amount to $29.8B.
The number of players this year will reach 108.3 million.
Japan is the largest market in the region and the third-largest market in the world after the United States and China. It accounts for 60% of the total revenue and players in the region.
Korea is the leader in the PC gaming segment among the three markets. It represents 55% of the total revenue of the segment and 45% of players.
42.7% of South Korean PC gamers play in internet cafes.
Chinese Taipei has the highest percentage of gamers among the population (compared to Japan and South Korea) - 56%.
Forecasts for 2027
In terms of revenue, the markets are expected to grow to $30.8 billion.
The audience will increase to 110.6 million people.
Both in terms of audience and revenue, growth forecasts are very modest - only 0.6% per year.
It is expected that the home console market in Japan will generate more than $3 billion in 2027.
Nintendo FY'24 Q1-Q2 Report: Numbers and insights
Impact of Intellectual Property (IP)
Sales of Mario series games from April to September 2023 increased by 30% compared to the same period in 2022. Mobile device downloads surged by 40%, attributed to the successful release of The Super Mario Bros. Movie.
Game Sales
Super Mario Bros. Wonder sold 4.3 million copies within two weeks of release, marking the largest launch among all Super Mario games.
Pikmin 4, released in July, sold 2.5 million copies as of October 31, 2023, the biggest launch in the series' history in all regions.
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The Legend of Zelda: Tears of the Kingdom exceeded 19.5 million copies in sales.
The company sold over 1.133 billion copies of games on the Nintendo Switch.
As of September 30, 2023, 132.46 million Nintendo Switch units have been sold.
Sales of Nintendo's first-party game lineup have been growing for the third consecutive year and are approaching 2020 levels.
In the Nintendo Switch generation, almost each key Nintendo franchise has seen significant growth in sales.
Long Tail of Sales
The Legend of Zelda: Breath of the Wild sold 8.49 million copies in the first 2 fiscal years after release. However, total project sales currently stand at 22.66 million, with two-thirds of sales occurring in the third and subsequent years.
Most key Nintendo releases earn less than 50% in the first 12 months after launch. All key titles have a very long tail of sales. The best performance among all Nintendo games is Super Mario Kart 8, where only 17% of all sales occurred in the first 12 months.
This is a unique situation for the industry, especially for single-player games without a Games as a Service (GAAS) approach. It is commonly believed that the majority of sales occur in the first 3 months after release.
Audience
The total number of Nintendo game installations on mobile devices exceeded 860 million.
As of September 30, 2023, over 330 million people had a Nintendo Account.
Over 38 million people are subscribed to Nintendo Switch Online.
The annual audience for Nintendo Switch (from October 2022 to September 2023) is 117 million people.
Nintendo, with examples like Animal Crossing and Kirby, demonstrates how it has achieved success in the U.S. and Europe. Now, the majority of the audience for Animal Crossing and Kirby and the Forgotten Land is in the West, though a decade ago, the main concentration was in Europe. Sales in the home country have also grown 2-2.5 times.
AppMagic: Top Mobile games of November 2023 by Revenue and Downloads
AppMagic provides revenue data net of store commissions and taxes.
Revenue
Honor of Kings continues to dominate. In November, the game earned $100.8 million. However, the lead over competitors is not as significant anymore.
Monopoly GO! came very close to taking the top spot on the global chart. In November, the game earned $99.5 million. The game continues to set revenue records, and perhaps in December, we may finally see a change in leadership for the first time in a long while.
Genshin Impact had an excellent month, climbing 4 positions in the chart, securing the 3rd spot, and earning $96.5 million. The project's revenue has been growing for the fourth consecutive month after a setback in May (related to the release of Honkai: Star Rail).
Justice Online returned to the top 10 again. The NetEase MMORPG earned $44.6 million in November.
Downloads
There are a few changes in the download charts. Roblox is in first place with 15.9 million downloads.
Real Car Driving: Race City 3D (14.4 million downloads) is second, and the evergreen Subway Surfers (14.3 million) is in third place.
The only new game at the top is Spider Fighting: Hero Game. Inspired by Marvel's Spider-Man 2, developers released a mobile game based on it. You can swing on the web and beat villains. The concept was well-received by people - 12.9 million downloads.