Mobile Gaming in APAC: Opportunities and Challenges
By Mariam Ahmad 21 June 2024
The Asia-Pacific region stands at the forefront of the global mobile gaming revolution, a vibrant hub where digital entertainment meets exponential growth. Home to some of the world’s largest gaming markets, including China, Japan, and South Korea, APAC continues to dominate the mobile gaming landscape, setting trends that resonate worldwide. In fact, domination takes a new level in this region - the APAC region scores the highest shares of organic gaming app installs at 48%. This surge is propelled by an expansive young demographic, rapid smartphone adoption, and innovative technologies that redefine gaming experiences.
Advertising plays a pivotal role in this dynamic sector, serving as the lifeblood for free-to-play games - a model that dominates the market. Rather than relying solely on in-app purchases, developers and publishers harness sophisticated advertising strategies to monetize their creations effectively. This symbiosis between gaming and advertising not only fuels the industry's economic engine but also crafts a playground for creativity and technological advancement.
As we delve deeper into the realm of mobile gaming in APAC, we uncover a series of trends and challenges that shape the industry. From key trends, including popular game genres, to the hurdles posed by certain types of ad that cause a drop off of players in APAC, the mobile gaming arena in this diverse region is both a land of opportunity and a battlefield of competition.
Key trends shaping the region
The surge in mobile gaming within APAC is nothing short of spectacular. The number of mobile gamers continues to climb steeply, with estimates suggesting there are now over 1.5 billion active mobile gamers across the region - a figure spurred by the pandemic's push towards digital entertainment. Further to this, app stores in APAC countries have seen record-breaking downloads, surpassing 80 billion game downloads in the last year alone. What does this mean for advertisers? A vast, ever-expanding audience ripe for engagement.
The Asia-Pacific region dominates the global mobile gaming industry, contributing to 64% of the worldwide revenue in 2023. This leadership is underscored by its vast base of 5.2 billion mobile subscribers, which represents more than half of the global total, according to a report by GlobalData.
In their latest thematic report, GlobalData reveals that the mobile gaming sector generated $124 billion in revenue in 2023, with projections suggesting growth to $195 billion by 2030. Among the countries, China emerges as the top player, responsible for approximately 31% of the global revenue. The United States holds a distant second position with a 17% share, followed by Japan, South Korea, and Germany.
How are gamers gaming?
According to regional research by Marketing Interactive, action games take the crown. In 2023, they grabbed the biggest share of new app installs in APAC (18%), followed by hyper casual and puzzle (both 14%). But that's just the beginning. When it comes to playtime, action games go into overdrive, accounting for a whopping 27% of all sessions.
Diving into regional trends, Singapore saw the most significant YoY growth in app installs (9%), with the Philippines (6%) and Mexico (5%) close behind. However, session growth wasn't as rosy. South Korea saw a modest 2% bump, while other markets, like Singapore (-37%), experienced a decline.
Gaming subgenres are booming. Racing games surged by 61%, followed by simulation (53%) and arcade games (38%).
APAC gamers also reign supreme in playtime. When it comes to session lengths, Indonesia takes the gold medal with a staggering 48 minutes, followed closely by the Philippines (46 minutes) and Singapore (35 minutes).
Singapore takes the cake again for marketing, with a whopping 88% of marketers utilizing in-app advertising – the highest rate in the region. This isn't surprising – with 70% of APAC marketers incorporating in-app ads into their strategies, the results speak for themselves. 79% of marketers report improved brand awareness, and 66% see a higher return on investment.
The takeaway? Mobile gaming in APAC is a powerhouse, with action games leading the charge. But don't underestimate the rise of specific subgenres and the effectiveness of in-app advertising for reaching this highly engaged audience.
Indonesia on top
Indonesia emerges as a considerably dominant force among the APAC mobile gaming scene. Mobile phones, both accessible and affordable, have transformed the gaming landscape in the country. The latest study by Omnicom Media Group Asia Pacific reveals a surprising fact: Indonesia now leads the Asia Pacific region in gaming. How did this diverse nation achieve such prominence? The answer is found in the widespread use of smartphones and the enthusiastic embrace of mobile gaming.
The study highlights Indonesia's fervent embrace of mobile gaming, surpassing prominent APAC countries like Malaysia, China, Thailand, and South Korea. According to the research, 96% of the 1,021 Indonesian respondents prefer mobile devices, with 61% gaming daily. This dominance is driven by the affordability and accessibility of smartphones. Brands can gain significant traction by capitalizing on mobile platforms for top-of-funnel activations.
So, what are some of the challenges?
While there is fertile ground for opportunities, APAC presents its own set of challenges. Cultural preferences, diverse demographics, and even mobile device limitations create a set of specific challenges that are unique to this region. A study by Omnicom Media Group sounds the alarm for mobile game developers in Asia Pacific when it comes to advertisements specifically. Their research with over 12,000 gamers reveals a growing frustration: in-game ads are pushing players to abandon ship.
The report highlights a potential exodus of gamers, with many citing disruptive ads as the main culprit. Forget static promotions and annoying pop-ups – APAC gamers are demanding a more seamless and engaging advertising experience. Interestingly, the study suggests that strategic ad placement (seasonal or rotating) and memorable brand experiences could hold the key to winning over – or at least not scaring off – this crucial market.
Will developers heed the call and adapt their monetization strategies? Only time will tell, but one thing's for sure: the future of mobile gaming in Asia Pacific hinges on finding a balance between profit and player enjoyment.
Consider cultural nuances or lose out
Cracking the APAC mobile gaming market requires more than just a catchy title. This region boasts a rich tapestry of cultures and preferences. To truly flourish here, developers need to weave in cultural nuances. This means tailoring content, design, and even monetization strategies to resonate with local tastes.
Understanding APAC's unique mobile gaming nuances is crucial for Western developers
There are subtle changes in how content is currently consumed by gamers, at least in China, that make it more difficult for game companies to flourish when they export their titles to APAC. Western developers are often unprepared for how much resources APAC markets demand. There is a big need for technical support and live ops that is more pressing than other regions. For example, in China, there is a big culture of coupons to encourage in-app purchases. Home-grown companies are used to sharing deals with consumers, and users expect to spend through offers within the first day, even the first hour, of install.
In the US and Europe, game companies don't see purchases happen so fast, and think in terms of a week window from install to purchase. But, as above, APAC users want to make purchases much more rapidly, and want to be enticed by coupons.Anyone entering the market needs to tailor their strategies to communities and regular, rapid updates.
Furthermore, marketers need to view advertising not only with a goal of user acquisition optimizing towards ROAS, but also driving attention to participate in the promotional events, either in-app or in the community on a different social platform.
APAC is not a one-size-fits-all monetization model
It’s the world’s biggest mobile gaming market, but I’m not sure it makes a lot of sense to look at APAC as one region. Many countries with massive amounts of mobile users, like Indonesia and the Philippines, are very hard to monetize in the way mobile games predominantly monetize right now. This in turn makes these audiences unattractive to game advertisers, as users might be cheap, but they also bring very little revenue. Web3 saw massive growth there as the monetization relied on tokenomics rather than in-app spend or advertising revenue. But I don’t think that’s a sustainable model. It’s basically using these audiences to drive activity, which drives revenue from other sources, not the spending power and attention of these users directly. Now, if someone can do that in a sustainable way, it’s a massive opportunity. I just haven’t seen it yet.
On the other hand, you have the “tier 1” APAC countries like Japan and South Korea, where the “western” model of UA and monetization can work just fine and the barrier to entry for western publishers is probably more cultural than anything else, since they face high-quality “local” competition.
All-in-all, this is a region seeing massive growth and opportunity, especially since those of us in the Western world are often overly focused on targeting US users, oversaturating that market.
Forget jockeying for positions – APAC's mobile gaming market is a full-blown battle royale composed of ever-shifting regulatory landscape and diverse needs. From in-app purchases to AI ethics, these rules will be the ultimate test of adaptability. Remember China's $80 billion tech wipeout in 2023? That's just a preview of the regulatory rollercoaster ahead. But here's the wild card: each APAC sub-region has its own cultural preferences and trends. Those who can tailor experiences to resonate with these nuances will be the ones laughing last. One thing is for sure, APAC's mobile gaming future is a wild ride of regulatory hurdles and cultural leaps.
APAC growth driven by Esports, cross-platform play, and regulatory changes
The mobile gaming scene in the APAC region is likely to see major growth and transformation in the coming years. There are three main areas to pay attention to:
Mobile esports This category will continue to gain traction with more tournaments, professional leagues, and sponsorships. Games like PUBG Mobile, Free Fire, and Mobile Legends will be important drivers, supported by better mobile hardware and faster internet speeds.
Cross-platform play Gamers want to play with their friends, regardless of where they play (mobile, PC, console). We will see this trend expand, growing player bases, and continually improving the gameplay experience.
Regulatory changes Governments in the region will continue to put pressure on mobile gaming, particularly around data privacy, content censorship, and gambling. Developers will need to navigate these regulations carefully to succeed.
The future of storytelling in China leans towards narrative-based
The stories people want to consume are changing. For example, in China, people don't like to view passive stories as much as before. By passive, I mean where the protagonist is just at the center of events without making anything happen. In particular, romance stories where a woman just receives interest from a man (to simplify it a bit).
In fact, most stories are catering to revenge plots, which is perhaps telling!
This trend indicates an overall feeling that people want more control in their lives. As such, I think we'll see more games based on narrative storytelling, with increasing degrees of choice the players have control over.
