State of Mobile Gaming 2022: U.S. and Japan see double digit revenue decline in Q1 2022

Following 2020’s surge in mobile game revenue and downloads, the longer term impacts of the global pandemic and lockdowns are now coming to the fore. The mobile games market was able to build on the gains it made during this time, but there are now new challenges: sustaining growth while also dealing with IDFA headwinds and inflation. Sensor Tower’s State of Mobile Gaming 2022 report takes a deep dive into the impacts of these challenges on different regions and genres, and which markets continue to grow in the face of them.

U.S. game revenue sees first ever year-over-year decline in Q1 2022

Across the App Store and Google Play, the U.S. remains the largest market for mobile game revenue, having outpaced Japan in Q2 2019. While U.S. player spending consistently hit above $6 billion throughout 2021, the market declined by 10 percent year-over-year in Q1 2022.

Japan, the second largest mobile games market, saw revenue decline Y/Y for the third consecutive quarter in Q1, decreasing by 18 percent to $4.2 billion. Meanwhile, Taiwan, the fifth largest market, is still growing, with revenue increasing by 7 percent Y/Y to almost $700 million during the last quarter. Such was its growth, it overtook Germany, which now ranks as the sixth largest mobile games market in the world.

Alternative Markets are Gaining Traction

Combined, the U.S. and Japan lost a 3 percent market share of global game revenue in Q1 2022, compared to 2021. Countries outside the top five, however, have slowly made gains, suggesting that mobile game publishers have turned to less-tapped markets with higher growth potential.

Download Drivers

India remains the largest market for downloads globally, accumulating 2.2 billion installs in Q1 2022, or 15 percent of total worldwide downloads. Nevertheless, the country lost two percentage points in market share last quarter when compared to 2021.

Brazil consolidated its position as the third largest market for mobile game downloads. During the past few quarters, installs in the country have grown faster than the No. 2 market, the U.S. If this trend continues during 2022, Brazil may overtake it and become the second largest country by downloads.

Genre Trends

RPG was the No. 1 mobile game genre by worldwide revenue in 2021, followed by Strategy at No. 2 and Puzzle at No. 3. Player spending in Strategy games grew by $2 billion Y/Y, while RPG was close behind with growth of $1.2 billion, followed by Puzzle with an increase in revenue of $1.1 billion.

Among the top genres, Action was the fastest-growing genre, with player spending rising by 58 percent Y/Y in 2021, largely due to the strong performance of Genshin Impact from miHoYo. The No. 2 fastest-growing genre was Puzzle with a 14 percent increase, followed by Strategy at 13 percent. Despite growth in 2021, the five largest game genres registered declines during Q1 2022.

For more analysis on how the mobile game industry looked in 2021 and Q1 2022, as well as a deeper dive into mobile game genre and monetization trends, you can download the complete report in PDF form below: