Mobile game makers evaluate the uncertainties of iOS gaming

Mobile game makers came into 2021 in the midst of the pandemic with a lot of uncertainties around how the mobile ecosystem was changing. While we have some clarity on big uncertainties — such as Apple’s privacy push and the antitrust litigation over the App Store between Epic Games and Apple — there’s still a lot of debate about how things will turn out for both iOS gaming and the broader mobile markets.

I’ll be discussing those uncertainties and changes at events coming this week and soon after. On September 29 at 10 a.m. Pacific time, I’ll moderate a panel on what’s next with mobile app ad monetization. The panelists include MoPub’s global commercial head Robin Wheeler, Facebook Audience Network’s global lead Steve Webb, and Vungle’s senior vice president of global revenue Scott Silverman.

And I’m moderating a panel on mobile game monetization trends for 2021 at the Mobile Growth Association’s MGS Games 21 event at 10:20 am Pacific on September 30 with Chris Akhavan, vice president at EA Mobile; Jarkko Rajamaki, vice president of ads at Rovio; and Carissa Gonzalez of Pixelberry Studios. (The MGS Games 21 event will be hybrid, both online and in-person at the SF Jazz Center in San Francisco). We’ll also be discussing these topics at our upcoming GamesBeat Summit Next event on November 9-10 and our upcoming GamesBeat event on January 25 to 27, 2022.

I’ve also done some interviews this summer with other mobile gaming voices such as Offer Yehudai, president of Fyber, and Brian Bowman of Consumer Acquisition others about this subject. The different experts across the mobile gaming ecosystem are coming around to stronger opinions about what the future holds, and we’ll see a lot of that advice coming through the events in the coming days.

Growth predictions

Newzoo predicted last week that mobile gaming revenues would grow 4.4% to $90.7 billion in 2021, coming off of 27% revenue growth in 2020. The 2021 growth is slower than the overall 11% compound annual growth rate expected from 2019 to 2024 because it is so hard to beat last year’s extraordinary revenue as people played more mobile games at the onset of the pandemic.

Because of Apple’s focus on privacy over targeted ads and the accompanying regulatory policies around the world, it has become more challenging to target mobile gamers with performance-based advertising, where advertisers get paid if users take action based on ads. It’s no longer easy to measure if particular ads are effective in that respect.

Dave Westin, chair of the advisory board and strategic speaker outreach for MGS Games, said in an interview with GamesBeat that these headwinds will combine with tailwinds such as the expansion of gaming into new territories like the Middle East, Africa, Latin America, India, and emerging parts of Asia.

“You’re going to see some consolidation among the vendors, and from a publisher perspective, we’re seeing a lot of growth in international markets,” Westin said.

Newzoo expects the number of smartphone users to reach 3.9 billion in 2021, up 6.1%, with much of the growth in emerging territories.

But a lot of these predictions are based on assumptions about how both iOS and Android will change in coming months. Facebook released a report in July that discussed various qualitative factors that could affect mobile gaming and the wider ad ecosystem. While the IDFA change put pressure on revenues, eMarketer noted a positive — time spent on mobile games increased by 9 minutes per day per U.S. adult in 2021, and most of those games will hold onto that growth going into 2022.

Market researcher IDC estimates that mobile game revenue is $156 billion, and about $26.8 billion of that — or 17.2% — is ad revenue. This imbalance suggests an opportunity to increase ad revenue, Facebook said. Omdia predicts in-app ad revenue will rise 21.3% in 2021.

This will change as the industry makes a transition from the older, historical-based waterfall format for advertising to a new format dubbed real-time app bidding. With app bidding, there are open, real-time auctions between ad networks and other demand sources — enabling more competition among ad buyers, where the highest bidder wins. This results in more revenue going to publishers and developers for each ad impression served to players in their mobile games.(…)

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