How Has COVID-19 Impacted the Mobile Games Industry?
The COVID-19 pandemic has been a watershed to virtually every aspect of society. It has forced us to rethink the way we approach certain industries, and it has brought others to a complete standstill. As a direct result of COVID-19, Q1 2020 saw an enormous spike in download numbers for mobile games. According to a report by App Annie, download numbers jumped 30% in the months of January through March. However, as countries have spent recent months coming out of lockdown, that trend has reversed. What happened? And what is the industry predicting for the long-term?
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How Did COVID-19 Cause the Q1 2020 Spike in Mobile Games?
With some countries completely shut down in the months of January though April due to COVID-19, mobile games quickly became the most versatile and accessible form of entertainment for everybody who was housebound. After all, they don’t require the purchase of games consoles or extra hardware, and everyone in this day and age owns a mobile phone. And a large percentage of mobile games are free to play (F2P), where making in-app payments is optional.
The spike in mobile games downloads followed the global pandemic curve. In China, where lockdown occurred earlier, downloads peaked at 284.3 million in February. That peak had a later onset in Western countries.
As many professionals in the industry pointed out, it was beginning to look like a new era for mobile games. With the unprecedented surge in downloads, games were seeing new users who had never played mobile games before. Mobile games were moving out of the fringes of entertainment and becoming more of a mainstream pastime. What’s more, games came to the forefront as a way for people to stay social and connected while social distancing. Women in particular were a particularly strong demographic for playing mobile games. As speakers at the GamesBeat Digital Summit in April pointed out, with kids being home from school, mobile games were the best, most portable way of getting quick sessions of gaming in while caring for children.
Q3 of COVID-19 and How It Will Affect Mobile Games
Many countries have come out of lockdown in recent months. However, there remain the looming threats of second waves of coronavirus, as well as global recession due to so many economies being shut down. Luckily, games are widely considered to be a recession-proof industry. If people have less disposable income, they priorities small, inexpensive recreations such as free mobile games that you’ll maybe drop a few dollars into for a more premium experience.
However, while downloads are increasing significantly due to COVID-19, consumer spend and in-app purchases are not following suit. And it’s likely that, of this 30+% bump in users, only 3-5% will continue to play mobile games once schools and offices re-open. Dr. Louise Shorthouse, a research analyst from Omdia, predicted in her presentation for GDC Summer 2020 that the mobile games industry expects to see 2-3% annual growth by the end of 2020, which should normalize in 2021. Ultimately, the mobile games industry is projected to dominate the games market in 2021 and beyond.
The Future of Mobile Games in a Post-COVID World
Experts predict the mobile games industry will keep going strong, with $98 billion in revenues by 2024. However, as COVID-19 takes its toll, it’s likely there will be a sustained global recession on the horizon. And while the games industry will likely weather it out, it’s worth keeping in mind how an economic downturn might affect consumer spend – particularly in Japan, China, and the United States, 3 of the top markets for mobile games.
While Chinese publishers are performing strongly in the mobile sector, with names such as Tencent, NetEase, and Lilith Games, there is rising unemployment in China. This will likely affect acquisition of new players, and the market has already seen declining activity. This could be mirrored in Japan, which saw a drop in mobile games revenues in 2011, during their last recession. And with political instability in the United States, this may extend their recession into the long-term and have global repercussions.
Due to their nature, mobile games have the potential to survive lean times better than other industries. Still, it’s crucial to take advantage of the huge boom in players from the first half of 2020, by converting them into paying customers.
How Push Notifications Bring About Conversions in Mobile Games
For customers who are new to mobile games, they may not be accustomed to a “pay-as-you-go” gaming experience. That’s why push notifications are a necessary driver for in-app purchases and other revenue streams. For example, take a casual game where the business model includes a limited amount of free gameplay, where the player can pay to bypass the timing barriers, or they can pay for a more premium gaming experience. A newcomer to F2P games might just assume they downloaded a subpar game, or they might get frustrated with the gaming mechanics. Here, a push notification is the ideal way to direct them to your shop or other means of making a purchase.
Push notifications are also a crucial means of boosting engagement and user retention. Some games’ business model depends more on the gameplay itself. For example, if users view monetized ads, as is usually the case with hyper-casual games. Notifications are a way of directing them back into the game at opportune moments. Notifications sent based on data signals from the user’s device can keep your game fresh on their mind. They ignite the craving for gameplay and drive them to open your app during their coffee break at work, or when they’re home relaxing for the evening.
Push notifications are also a key driver of LiveOps for mobile games. OpenBack’s mobile engagement SDK gives you access to your user’s data metrics. These are prime tools for personalizing and then communicating to them:
- bonus gaming content
- cosmetics and other in-app purchases (IAPs)
- discounts or limited-time sales
- news about events or AMAs
- any other supplement to your core game that would boost UX
For more information on how push notifications can optimize your LiveOps campaign, read our blog post: Push Notifications Can Optimize LiveOps for Your Mobile Game
If you’d like to learn more about OpenBack’s use of device-side data to maximize user retention and engagement with your app, get in touch with one of our experts!
To read more about how to use OpenBack to boost player retention and maximize revenues, download our Case Study: Dreamworks How To Train Your Dragon App, School of Dragons