Your predictions for 2023 in mobile games: web3, advertising and hypercasual evolve

 

We asked a load of smart mobilegamer.biz readers for their 2023 predictions to kick off the year.

Elsewhere in this week’s run of 2023 prediction posts, we’ve covered the rise of generative AI, a stormy economy, more M&A, cross-platform development, evolving monetisation models plus what’ll happen in other areas like sexist ads, AR, TikTok, live ops and more.

Next up: more well-known folks talking about 2023 in web3, advertising and hypercasual:

Magic Eden chief gaming officer Chris Akhavan:
I predict we’ll see the first wave of truly fun and sustainable web3 games by late ‘23. A lot of the talented game studios building web3 enabled games started building in late ‘21. Considering typical time-to-market for high quality new games in development, we should see the first of these launch late this year, and hopefully show the world the potential of web3 enabled game economies.

AppLovin demand VP Andrey Kazakov:
Global macroeconomic changes will reshape the way businesses think about growth demands and create opportunities for those who are willing to adopt. As the mobile ecosystem evolves, advertisers will continue to get pushed to experiment with new channels to remain competitive.

Mobile-first businesses will go beyond mobile inventory to new forms of audience reach that are novel for mobile performance, such as Connected TV. Measurement is also evolving as it takes a broader set of tools and methods – from media mix modeling to up-to-date platform support – to have a holistic view of channel portfolio performance.

Chris Akhavan, Andrey Kazakov, Neil McFarland.

First Light Games cofounder Neil McFarland:
More blockchain games are coming that will show the real value of owning your own game assets. We’re helping normalise it, by the end of the year it will just be ‘how it is’. Also AI tools will assist in game making.

FunPlus VP of business development Bob Slinn:
I expect to see continued challenges from the mix of macro-economic and game industry specific issues that made 2022 so difficult for many in the gaming industry and beyond.  That said, the games industry is incredibly innovative and I am optimistic that game developers will start finding more success with new methods of marketing that go beyond ‘traditional’ performance based UA, which will allow them to reach new audiences and grow their games again.

Everything from classic brand marketing through to influencers, we will see innovative approaches as the industry focuses on new marketing strategies and tactics. The other big theme that will gain further traction will be cross-platform gaming. Fortnite and others have shown that the demand from players to be able to access their games on a range of devices is clearly there and that developers who execute well on this will see the benefits in growth in audience, engagement and ultimately revenues.

Sandsoft head of marketing Ratko Bozovic:
Macroeconomic volatility will decrease discretionary income, which will affect the ARPUs, forcing the reduction of CPMs on the gaming channels. On the other hand, traditional (non-gaming) advertisers will push budgets from branding to performance (direct-response) channels, which will neutralise the aforementioned decrease in CPIs. All of this will lead UA ROIs to become even lower, pricing out of the market a lot of small studios that don’t have strong monetisation or high organic traffic.

Bob Slinn, Ratko Bozovic, Ian Masters, Roman Garbar.

Flick Games founder and CEO Ian Masters:
Toxicity around NFTs will diminish. Post-crash my hope is that they will be seen as they always should be: as an additive technology that provides meaningful player ownership and extra developer revenues. Increasing privacy challenges mean that developers need to better monetise more broadly, rather than hunting high-value players, and NFTs are a great way to do that when done in a player-friendly way. Blended revenue models will increasingly become the norm: ads + IAP + subscriptions + NFTs.

Most NFTs will be given away for free and have little to no monetary value. Some will become very collectable and hence valuable. This should not surprise anyone – it’s exactly the same with physical merch. It should never have been different.

Of course, the alternative is that players will simply have to watch a lot more ads due to less well-targeted ads. Surely only the ad networks want that? Widestream acceptance of (blockchain) tokens will take a lot longer.

Finally: PSVR2 will be a lot less popular than Kinect.

Tenjin marketing director Roman Garbar:
Hyper-casual games are going to die and will be reborn again in 2023, just like they do every year. The question is what form will take when they are reborn this time?

The effects of changes to Google Play’s ad policy were overstated. The biggest threat to hypercasual games in 2022 was the Google Play ad policy change. So far, we have not seen any signs that the new policy has significantly affected ad revenue. There was actually a 5% increase in interstitial ads revenue across all app categories one month after the new policy took effect. Of course, the expected reduction may take more time, but there is still no reason for developers who are using in-app ads responsively in their apps to panic.

Borderless innovation is the new normal. The low barrier to entry in the hypercasual market means that developers from all corners of the globe can create successful games. The main publishing hub is no longer in Paris or Istanbul, as it used to be. I expect to see an even greater diversity of developers (check out Black Candy from Mongolia) and fresh new ideas in 2023, as experiments with game mechanics continue to fuel the birth of new sub-genres, such as the wacky and entertaining game Save the Dog.

Mergers and acquisitions will continue. It’s getting harder to acquire new users on mobile due to the new third-party data limitations on iOS. Also, it’s going to be harder to raise money for a new game project in 2023 due to the global economic downturn. However, it’s not that hard to acquire a mobile game developer and their precious first-party data, if you have sufficient resources. A recent example is the acquisition of hypercasual developer Popcore by a Rollic/Zynga/Take-Two.

Android is going to remain a safe haven for advertisers. Even though the competition on Android has increased, publishers will still be able to acquire users on Android over the whole of 2023, like they used to. I expect publishers will take advantage of that. That might change in 2024, once Google has released its privacy sandbox for Android.

Finally, I predict more than one ‘hybrid-casual’ hit this year. It is becoming increasingly clear that more and more studios (and investors) are taking these types of games seriously. In fact, 2022 saw the emergence of another true hybrid casual hit in Survivor.io, and we will likely see more of these types of games in the coming year.

Companies such as Homa Games, which raised $100 million in October 2022, are now starting to specialise in the development of hybrid-casual games, and this trend will likely continue.