Gaming app sector spent $14.5 billion on user acquisition in 2021

gaming apps report

AppsFlyer today released its State of Gaming App Marketing for 2022, which showed the industry spent $14.5 billion on user acquisition amid a shift form iOS to Android.

The report is an in-depth insight on key trends in gaming that helps marketers drive innovation and ultimately navigate their way in the new age of data privacy.

Gaming app marketers are known for their data-driven expertise. However, as consumer privacy continues to evolve and new limitations of data usage will be introduced in other platforms, gaming marketers need to double down on innovative ways to market, measure, and optimise their activities.

Gaming app shifts

When Apple rolled out the App Tracking Transparency (ATT) framework, gaming marketers initially struggled to measure non-organic installs (NOIs) and globally, NOIs were 30% lower between April and September 2021. 

Meanwhile, adoption of Apple’s SKAdNetwork (SKAN) surged more than 5x, while new and improved measurement capabilities paired with SKAN led to the total number of NOIs nearing pre-iOS 14.5+ levels. 

Additionally, gaming apps have adopted SKAN much faster than non-gaming apps, with 67% of iOS non-organic installs coming from SKAN compared to only 30% in other verticals.

“We currently find ourselves in the golden era of mobile gaming,” said Shani Rosenfelder, Head of Content & Mobile Insights, AppsFlyer. 

“The rate of acceleration of mobile adoption paired with the ongoing investment in original gaming content has made mobile gaming a lucrative business. 

“That being said, since Apple’s implementation of the ATT framework in 2021, it’s gotten more challenging, and since marketing plays a major role in mobile gaming, the impact on overall downloads and revenue has been significant. 

“Going into 2022, marketers must find new ways to effectively reach high value users in the new reality of data privacy.”

Key Global Insights:

  • 22% increase in the number of total gaming app installs on Android. This is an impressive feat considering the peaks of the first lockdowns, proving the pandemic played a key role to introduce gaming to the masses. 
  • $14.5 billion spent by gaming apps on User Acquisition (UA) in 2021, with the US commanding a half of global budgets. Privacy changes led to a 13% Year over Year drop on iOS while Android surged 35%, causing overall UA spend to rise 18% in 2021. With measurement challenges post ATT and fewer NOIs, iOS spend dropped despite significant increase in CPI starting in August. Android’s jump was driven mainly by a 22% rise in NOIs as the result of shifting budgets, where in 2020 iOS commanded 38% of gaming UA budgets versus only 28% in 2021. 
  • Limited data post ATT led to a -6% drop in the number of total gaming app installs on iOS. With the shift towards aggregated measurement, install numbers in gaming have dropped, mostly due to a decline in marketing-driven installs. This is best illustrated by the 6% drop in iOS gaming apps, which is in stark contrast to Android’s significant 22% growth. The gaming industry’s reliance on user level data is also demonstrated in the 21% and 25% increase in non-gaming apps for both platforms. 
  • Overall In-app purchase (IAP) revenue in gaming drops 35% since June when iOS 14.5 gained traction. The sharp decline in IAP revenue illustrates the monetization challenge for games in the age of privacy, Android number remained consistent and even saw a 10% increase towards the end of 2021.

Key UK insights:

  • Gaming installs were down 18% between September and November, but surged again in December by 28%. This strong surge at the end of the year is purely an effect of the holiday season, which cannot be understated on games and their devoted gamers.
  • Hyper Casual apps and Hardcore games showed positive YoY growth. Hypercasual Android games saw a 62% increase compared to 29% for iOS games. In the hardcore Android app market, there was a 26% increase while iOS apps saw a modest 6% increase.
  • Hardcore games experienced a 17% surge of In-app Purchase (IAP) revenue in Q4 likely due to the holiday season. Social Casino is quite the lucrative affair in the region, with a 10% share of paying users on iOS.
  • Hyper Casual and Hardcore in-app advertising (IAA) revenue growth in Android doubles throughout 2021. Midcore IAA rose by 90% as developers took advantage of ads integrated seamlessly into the gaming experience.

“Data privacy changes – specifically limitations around access to user-level data – have had a big impact on gaming marketers in the United Kingdom,” said Adam Smart, Director of Product, gaming, AppsFlyer. 

“Current opt-in rates of Apple’s ATT framework sit below the global average at 43%, and as a result, we’re seeing marketers explore new ways of acquiring and engaging users, and measuring campaigns. 

“An increased focus on contextual advertising, diversifying traffic sources, and re-thinking measurement KPIs should be on the agenda for gaming marketers looking to succeed in 2022.”