Mobile still dominates the in-game ad landscape, but big changes are afoot
Based on our estimates, the average US adult spends slightly over an hour playing video games each day, presenting a significant opportunity for brand advertising within games. Traditional barriers to brand advertising have been lowered, creating new possibilities across platforms.
While mobile games dominate in terms of total users, the time spent playing them is relatively close to other platforms. US adults spend around 24.4 minutes per day playing mobile games, accounting for 40.2% of their total gaming time.
Mobile games have shifted away from heavy reliance on advertising. Previously, many mobile games focused on hyper-casual games that were monetized through ads for other games. However, developers are now incorporating AAA games with higher production values and introducing additional in-app purchasing options such as subscriptions, game currency, and premium content. 2023 in-app purchases in US mobile games will exceed $20 billion. Globally, mobile games generate half of all game revenues, according to Newzoo estimates.
Despite this shift, mobile games still significantly influence advertising revenue. Approximately 70% of ad revenues in mobile ad networks, excluding social media walled gardens, come from mobile games, according to Data.ai estimates. Mobile games remain the leading platform for in-game advertising.
Consoles and PCs are also seeing an increase in free games. While console games traditionally relied on AAA games sold to consumers, cloud gaming and downloads have brought free-to-play games to these platforms. Microsoft and Sony are developing ad platforms for Xbox and PlayStation 5, respectively, although in-console ads are primarily integrated into games.
The gaming landscape is becoming more multiplatform, allowing players to choose where they want to enjoy their favorite games. Players are increasingly fluid, with 72% of console or PC gamers playing on multiple platforms, as reported by Newzoo. Moreover, the number of platforms offering games continues to grow, with connected TVs (CTVs), VR headsets, and even cars incorporating gaming experiences.
Source: Article by Yoram Wurmser at eMarketer