“Just hang in there, it will get better,” reassured Eric Kress from Deconstructor of Fun as he opened the Think Games Istanbul event today. Despite the current challenges, Kress expressed confidence in the industry’s ability to recover.
He acknowledged that many in the mobile sector may not have experienced a downturn before, but emphasized that such fluctuations are not uncommon in the broader games industry, citing the cyclical nature of boom and bust.
Looking ahead to 2024, Kress and Deconstructor of Fun founder Michail Katkoff offered their predictions for the future:
Key Points for 2024:
- The Digital Market Act will impact Apple
- AI is poised to revolutionize work practices
- User acquisition is expected to bounce back
- Apps are projected to surpass games in in-app purchases
- Investment challenges will persist
- The industry will continue to face lean times
Impact of the Digital Markets Act:
Kress discussed the implications of the Digital Markets Act, highlighting the changes imposed on Apple’s App Store rules. While Apple has made some adjustments, Kress criticized the technology giant’s approach, labeling it as unfair and predicted that most publishers would not adopt the new terms. He expects regulators to intensify scrutiny on Apple’s practices, potentially leading to further negotiations.
Extended Lean Period Ahead:
Katkoff shared his outlook on the industry’s financial challenges, pointing to minimal growth figures in 2023. He cited various factors contributing to the stagnation, such as market saturation, evolving consumer preferences, and economic uncertainties. The need for a strategic shift from growth-focused practices to a more deliberate operational approach was emphasized.
Stabilization in User Acquisition:
Following disruptions caused by app tracking transparency, Kress noted signs of stabilization in the user acquisition market. Adjustments by major platforms like Facebook and Google have mitigated the impact of privacy changes, with certain game genres showing growth potential.
Shift Towards App Spending:
Katkoff predicted a shift in consumer spending towards apps over games. He highlighted the increasing engagement levels on non-gaming platforms like TikTok, suggesting the need for the games industry to adapt to changing user behaviors.
Transformation Through AI:
Concluding the discussion, Katkoff explored the transformative role of AI in game development. He highlighted the potential for compact teams to create larger projects, while emphasizing the need for industry professionals to enhance their skills to stay relevant in a changing landscape.
State of Mergers & Acquisitions:
Reflecting on the M&A landscape, Kress indicated a slowdown in mega mergers, attributing it to a lack of active acquirers. With market uncertainties impacting investment decisions, he suggested a cautious outlook for future deals.
