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Well, we f*cked up!
As mobile game developers, if you have not buried your head under lines of code or are not wrapped up in the universe, I’m sure you all agree with me.
The reports show that the mobile games market is set to decrease this year for the first time since the beginning of the market.
According to the Newzoo report, experts forecast revenues will fall by 6.4 percent to $92.2 billion. They also reveal the 7.3 percent growth mobile saw last year and the 25.6 percent rise in 2020 when lockdowns drove an increase in consumers’ appetite for virtual entertainment.
So we can say that the golden age is in the past. With high ad costs, fragile players, and a significant drop in engagement following the coronavirus pandemic, the sector that once experienced rapid growth is now facing challenging times.
On top of that, tool prices are on the rise, and companies like Unity aren’t missing an opportunity to negatively impact the gaming industry.
What Happened in the Unity Drama?
Unity, that beloved game development tool many of us have been using, dropped some major bombshells recently.
They introduced a new Unity Runtime Fee, which translates to $0.20 per install. Things are not hard enough already.
From big studios to small ones and even publishers, the game industry came together and went up in arms. This united everyone, no pun intended, against the company’s decisions. They took drastic actions, from boycotting Unity ads to the European Games Developer Federation getting involved.
The backlash was so intense that Unity had to reconsider. But remember, Unity still hasn’t made a statement saying it’s fully retracting the decision, so I guess this drama will still be going on in the coming months.
But here’s the million-dollar question (or, should we say, the 20 cents per install question): What does this mean for your mobile game studio?
If you’re relying heavily on Unity, now might be the right time to think twice. AppLovin even released a nifty tool to help developers migrate to Godot or Unreal.
The Rough Patch for Mobile Game Devs
The biggest reason for this difficult period is that the gaming industry hasn’t seen any significant innovation over the past decade, especially in user acquisition and monetization strategies.
The global market is slowing; even though more people are playing mobile games, competition is slowing mobile game studios’ growth rates.
One of the biggest effects of the pandemic is that players no longer communicate with each other as often as before.
Players do not share the games they like with their friends as they used to, and this negatively affects the word-of-mouth that is frequently used in mobile game marketing.
Acquiring users is harder than before; IDFA (Identifier for Advertisers) created confusion, and the cost of acquiring users has gone up.
As player quality drops and user retention becomes more difficult, the unstoppable rise in acquisition costs has made things even more difficult for small and medium-sized studios.
The strict rules set by governments to protect consumers have made it even more challenging for game developers to earn money. The ban on Gacha systems and other similar models has forced many games to adopt less effective mechanics or, in some instances, to completely withdraw from certain regions.
All these problems resulted in mobile game studios, once a favorite among investors, deciding not to invest further in the company. Recent challenges have led to fewer people wanting to invest.
Lol, we had a lot of problems!
How Can We Find New Ways?
I know you are worried. I didn’t write all about sunshine. But as developers, we need to find new ways and learn how to adapt. All you need to do is keep calm, have some coffee, and read the rest of the blog.
With the iPhone 15’s switch to USB-C, Apple made a significant change. The European Union’s call for a standard charger by 2024 is just the beginning of this process.
The European Union’s Digital Marketing Act now allows iPhone users, from iOS 17 onwards, to add apps outside the App Store without tricks like jailbreaking.
Also, after the Epic Games vs. Apple case, developers aren’t tied to using only Apple’s payment system, saving them money.
These changes show regulators are encouraging more open platforms, challenging the closed systems big tech companies have built.
How We Fight Back
Now is the time to fight back for innovation and restart growth. The biggest problem is retention. The solution is a portfolio-wide focus.
We’re at the perfect time for cross-promotion; do not miss out. This way, you have a much better chance of making ten times more money from your games.
Use various LiveOps features and set up diverse in-game events to increase revenue and reward your players, encouraging them to return.
Also, look for new monetization opportunities. Like Ratic, it’s a white-label, real-cash tournament to increase engagement and open a way to monetize. Create in-game tournaments where players buy tickets or brands sponsor the prize pool.
Start distributing your own games. This move limits platform control, ushering in more innovation in content, monetization, and marketing.
Wrapping It Up
We’re in a bind, no doubt. The gaming world’s a tough landscape now, with the Unity uproar and other headaches. But let’s not forget who we are—innovators at heart.
Despite the hurdles, openings for growth and innovation are emerging. It’s time to embrace cross-promotion, fresh monetization avenues, and bold distribution paths.
We’re down but not out. Let’s respawn, gear up, and jump back into the game stronger and ready to take on the world.
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