This article was written by Nikola Mitic, the chief operating officer of SuperScale.
The mobile gaming industry has experienced exponential growth throughout most of its history. We witnessed the early ‘anything goes’ era, followed by the hypercasual dominance driven by cheap and hyper-targeted UA strategies.
However, the current landscape feels more challenging, akin to turning up the difficulty setting from ‘Intermediate’ to ‘Expert’ or even ‘Hellish’.
This isn’t just melodrama; the prevailing sentiment at the recent Pocket Gamer Connects in London seemed to be “survive to 25”. The golden age of mobile games, especially from a business perspective, seems to have come to an end. We’ve entered a phase that I like to refer to as the ‘grind’ or ‘squeeze’ where winning is much more difficult, but still possible.
While the effects of privacy-first marketing have significantly disrupted previously successful business models, the broader discussion often encompasses vague references to the “macroeconomy”. What does this term really mean for mobile game makers in 2024?
Understanding the Macro Economy
The macroeconomy refers to the entirety of the economy, including all industries, consumers, businesses, and decision-makers. Over the past few years, several ‘black swan’ events—unpredictable and severe economic threats—have severely disrupted the wider economy.
Factors like the Covid-19 pandemic and the war in Ukraine have real-time impacts on the world’s economy. Why does this matter for mobile games? Because our industry is not shielded from these broader economic shifts. As part of the entertainment industry, we are acutely vulnerable to such shifts.
While we naturally focus on the mobile games industry as a self-contained ecosystem, the broader economy influences consumers’ livelihoods, spending power, and leisure time, which are critical to the success of mobile gaming, especially for casual games that heavily rely on in-app purchases.
The significant increase in user acquisition costs, lower profit margins, and reduced investment from VCs and strategic investors has made our situation more challenging. We can certainly attribute some of these factors to external influences, but it’s important to acknowledge that overhiring during the pandemic and overpriced acquisitions have also contributed to the predicament.
Navigating 2024 and Beyond
Although significant layoffs and cost-saving measures may provide short-term relief, they also represent a substantial loss of talent and could impede the development of larger, innovative games. The economic outlook for the year remains uncertain, creating fierce competition for shrinking consumer wallets and declining revenue.
To address these challenges, developers can seek new opportunities by launching sister titles based on successful mobile gaming IPs in less saturated markets. Additionally, there’s a growing need to focus on maximizing revenue from existing and legacy titles through smarter marketing and live operations.
Ultimately, while our industry’s fate is influenced by macroeconomic factors, we must concentrate on making small, meaningful changes to the aspects we can control as we maneuver through the expert-level challenges ahead.
