No one can deny that while the world was experiencing the second wave of the COVİD-19 during the first half of 2021, mobile games had become our saviors while were spending most of our time at our home. According to Sensor Tower’s latest report, mobile game revenue spiked during the start of the COVID-19 pandemic. The mobile games market was larger than ever in 2020 and shows no signs of slowing down.
The State of Mobile Gaming 2021 says revenue growth only accelerated during the COVID-19 pandemic and users spent more than $22 billion in mobile games in Q1 2021. The report also stated that games earned more than $20 billion globally for the first time that quarter. Let’s deep dive into this report which includes a market overview by region, market forecast, game genre trends, monetization trends, and advertising trends.
Global Game Revenue Surged During the Pandemic
Mobile game revenue spiked during the start of the COVID-19 pandemic, seeing its largest year-over-year growth in Q2 2020 at 33%. Games earned more than $20 billion globally for the first time that quarter. Strong revenue growth continued in the following quarters. The 25% Y/Y growth in Q1 2021 easily outpaced the growth during the prior two years.
The U.S. Continues to Dominate Mobile Game Spending
According to Sensor Tower, the U.S. remains the top market for mobile games having outpaced Japan in Q2 2019, and surpassing $6 billion in revenue during Q1 2021. COVID-19 boosted player spending by 35% Q/Q in Q2 2020. Although revenue fell slightly over the next two quarters, growth picked back up again in Q1 2021. Japan and China were the next largest markets, well ahead of any other countries. Japan’s revenue climbed 35% Y/Y in Q1 2021, while China’s total is particularly impressive considering Google Play is not available in the country. Consumer spending in mobile games in the U.S. grew by more than $1.5 billion Y/Y in Q1 2021. This growth was more than all but Japan and China earned in total during the quarter. The top countries by growth included four of the top five countries by overall revenue. The one exception was Germany, the top country in Europe, with 33% Y/Y growth to nearly $600 million.
Pandemic Skyrocketed Mobile Gaming Adoption by 39%
Sensor Tower’s data showed a surge in mobile game downloads with big gains starting in Q1 2020 right at the beginning of the pandemic. Consumers turned to mobile games for entertainment during office and school closures. Although mobile game adoption has slowed since the peak in Q2 2020, it remained well above pre-pandemic levels. This suggests that some of the gains may persist even as countries begin to re-open in 2021.
As smartphone penetration in India increased in recent years, it has become the largest market for mobile game downloads. COVID-19 boosted game adoption in the market by 64% from $1.7 billion in Q1 2020 to $2.9 billion in Q3 2020. Emerging markets such as India, Brazil, and Russia achieved double-digit year-over-year download growth in Q1 2021. Meanwhile, relatively mature mobile markets like the U.S. had slower growth.
U.S. Game Revenue Growth Outpaced the Global Rate
The U.S. was already the largest market for mobile games revenue and looks to likely hold this position for the foreseeable future. U.S. game revenue growth has exceeded the worldwide rate for each of the past three years, reaching 34% Y/Y growth in Q1 2021. While game revenue continues to climb, expect more modest growth for U.S. mobile game adoption. U.S. game installs have mostly fallen off from the spike seen early in the pandemic. However, steady growth in 2019 plus a strong Q1 2021 suggests that the market may still see steady growth in the coming quarters. The COVID-19 pandemic revealed how games can benefit from having a strong social component. Many multiplayer games like Roblox and Among Us had a breakthrough year in 2020. Sensor Tower analyzed the mobile game revenue in Europe in 2020, reaching a record $2.7 billion in Q1 2021 with 27% year-over-year growth. While this Y/Y growth was lower than in the U.S. (which saw a particularly pronounced boost from COVID-19), it was still slightly higher than the global growth rate. Russia was the top European market in Q1 2021 with 758 million downloads, followed by Turkey at 537 million installs. This was more than double the No. 3 market, the U.K., which had 248 million downloads in the quarter.
When Sensor Tower looked into the Asian market, India rose to the top as the largest mobile games market by downloads in the world. It has seen rapid growth since the start of 2019, climbing from 1.2 billion in Q1 2019 to nearly 2.9 billion in Q3 2020. Indonesia had also experienced strong growth of 26% year-over-year in Q1 2021. China’s installs have declined since 2017, with a surge at the start of COVID-19 in Q1 2020 as an exception. However, China’s mobile game user spending has continued to climb despite its decline in adoption.
RPG Was the Top Game Genre by Revenue in 2020
RPG led all genres in mobile game revenue in 2020, followed by Strategy and Puzzle. RPG revenue grew by $3.6B year-over-year, while Strategy was close behind with a growth of $3.4B. Among top genres, Simulation led the way by Y/Y growth at 53%, followed by Shooter with 50% and Casino at 46%. Each of these genres had one of the top five games by revenue in 2020, with PUBG Mobile (Shooter), Coin Master (Casino), and Roblox (Simulation).
When we look at the subgenres, five of the top ten fastest growing sub-genres by Y/Y growth in Q1 2021 were in the Hypercasual genre, including the top two. Simulation and Arcade each had two sub-genres represented. The top game in Q1 2021 was Join Clash 3D from Supersonic Studios with more than 81 million downloads, representing the Hypercasual - Traversal sub-genre. Among Us drove nearly all of the growth for the Arcade - Social Party sub-genre.
Hypercasual and Puzzle Genres Rely on Ads the Most
Puzzle games were the top genre by ad publishing share of voice on five of the eight ad networks studies, and Hypercasual had the highest share of voice on the remaining three. Hypercasual games, in particular, monetize through showing ads, so it is not surprising that this genre publishes a high percentage of ads in mobile games while AdColony takes the lead on hypercasual.
Tabletop was the No. 2 genre by ad publishing share of voice on MoPub, and it ranked third on AdMob, Facebook, ironSource, and Vungle. Arcade also ranked among the top five on six of the eight networks.
