As players return to real-world pursuits post-pandemic, gaming firms are feeling the pinch. In 2022, mobile gaming spend fell for the first time since 2019: data.ai’s State of Mobile 2023 report estimates the industry’s revenues contracted by 5%.
The US was responsible for much of this decline, despite it having secured the second-largest share of the $81.2bn global market. In 2022, US mobile gaming spend was down 12%, having increased 22.9% in 2021 and 34.2% in 2020.
Japan claimed a 13% share of the global market, the third-largest of any country, but its mobile gaming spend similarly declined for the second year in a row. Despite rising 15% in 2020, in 2022 spend was 7.7% lower than 2019 levels.
Gaming publishers based in China, such as Tencent [0700.HK], had a more positive year. Together, they raked in over a third of total gaming market share, and the country saw mobile gaming spend increase by 4.9%. Again, this was significantly less than the 18.8% growth seen a year earlier.
Earnings take a hit
Tencent shares are up 9% in the year to 2 May. China’s government has been easing pressure on tech companies, and approved licences for a batch of Tencent’s games last December, but cooling interest from US gamers may be worrying to some.
Various factors have contributed to this dip in global gaming spend. The cost-of-living crisis is making consumers more conscious about how they spend their money while gaming firms are also facing a generational shift, with younger people proving more aware of how much time they spend on their phones.
Gen Alpha (those born since 2010) have access to more devices than any previous generation. However, according to research by consumer insights agency GWI, they are spending markedly less time on screens than their predecessors. For investors, this raises the key question of how companies will maintain revenues