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The cost of attracting new users or remarketing sleeping users, on the contrary, is growing.
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We work a lot with gaming companies, so we notice some industry trends from the inside. One of them is that users have started paying less. The peak of payments and profit growth is in the COVID year 2020, but after that, the quantity and frequency as well as the average check within games began to decline. This is true for both mobile and casual games.
According to GamesIndustry.biz, the total video game market in 2022 was $184.4 billion, down 4.3% from a year earlier. The decline continued in the first half of 2023. It would seem that the drop overall isn't catastrophic, but when you consider the performance of the biggest players, it's clear that mid-sized and smaller players have been hit harder by this decline.
With what it is connected, the subject of separate studies. Somewhere the reason is inflation (people have started to save on entertainment), somewhere in the exit of workers from remote work (less time for toys). Let's just note that this trend is global.
At the same time, the cost of attracting new users or remarketing existing/sleeping users, on the contrary, is growing. Google auction prices have increased, Facebook ad prices have increased, iOS has died out, Android has gone up in price.
Advertisers, including game companies, rushed to Influencers, but it turned out that bloggers of all stripes also want to earn, and a lot. And in addition to the high price tag on collaborations with them, Influencers have the factor of unpredictability - God only knows what may come into their heads, whether they will fulfill their obligations, and to what extent, how predictable the quality of their audience is.
There is another aspect that affects the picture. Solvent users in the US are mostly on Facebook. And, firstly, it is quite expensive to find them there through advertising, and secondly, due to their age and established consumption patterns, they are not very willing to play games, especially when it comes to the desire to try something new.
The more active and younger audience hangs out in other places, for example, on TikTok and Reddit. It's easier to "get" them out, but their ability to pay is lower.
It turns out that you either have to pay a lot (sometimes exorbitantly) to attract a solvent, rigid audience. Or to work with those who would willingly pay, but cannot afford it yet.
We note a few options to solve this problem.
Perhaps, having read to this point, marketers are getting discouraged. After all, it is as if we are saying: "Take money out of marketing, spend it on product development. And you can cut the marketing staff in half".
We're not. We are convinced that marketing will only benefit from improvements in the product. Firstly, there will be new topics, formats, and chips for promotion. Secondly, marketing should work in conjunction with the product (the reverse expression is also relevant), influence the changes, and then new killer chips can be invented through joint efforts.