After 2022 saw a decline in mobile game earnings and marked the first-ever year of revenue fall in mobile gaming history, it may be tempting to ask whether the era of unending industry growth is, in fact, at an end.
After all, 2022 began with the continuation of industry market leader China’s license freeze and saw a subsequent slowdown even after this was lifted. The country's gaming market declined by 19.1 percent quarter-on-quarter up to Q3 2022 and even Tencent couldn’t evade the impact, losing its status as China’s biggest company. As per Google Finance, Tencent’s stock prices on 5 January 2023 are down 19.33 percent at $45.08, meanwhile fellow mobile games giant Take-Two Interactive's stocks are down 38.38 percent to $105.89.
Apple also suffered in 2022, having seen $1 trillion wiped from its market cap and citing issues such as manufacturing.
However, the state of the industry may not be so gloomy after all. On a more optimistic note, Kim Soares of Social First suggests things are more positive than they seem at a first glance, with projected 2022 revenues of $92.2 billion still being up compared to pre-pandemic year 2019’s $68.3 billion – meaning there remains an upward trajectory when ignoring the pandemic blip.
The brighter side
Revenue in the gaming industry did decrease in 2022 compared to 2021, Soares acknowledges, noting estimations of an approximate 4.4 percent YoY drop for the whole sector and 6.4 percent in mobile games specifically. After an impressive climb of 25.6 percent in 2020 and a further 7.3 percent in 2021, the first revenue fall since mobile gaming’s inception may be a bitter pill to swallow.
Although, when considering the context of 2020 and 2021, Soares suggests "changes in customer behaviour" caused an anomalous increase and that the 2022 figures were "actually just a return to a more normal trajectory".
Soares' full post includes a graph of projected industry growth through the rest of the decade.
Adding additional positivity, analysts believe a resurgence is coming for Tencent, predicting that the Chinese megacorp will bounce back in 2023. Furthermore, Marketing maven Matej Lancaric believes the impacts of Apple’s ATT haven’t been as severe as many first expected, with 40 percent of iOS users still sharing their IDFA and making user acquisition possible.
