2024 has been a remarkable year for video games — and we aren't even technically halfway through the calendar yet. As of this writing, we have only had four whole months of game releases, and while it's not abnormal to have one or two game of the year contenders debut in that span, there have arguably been a half dozen or more. ,,,,, and all have some credibility as awards recipients, and there's plenty more on the docket for 2024 that might make it the best year of video games ever.
Why it's become harder to raise investments in mobile game development in 2024
16.04.2024 - 16:21 / gamesindustry.biz
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During the pandemic, the margins in the mobile games market continued to grow, surpassing expectations. Even after the initial surge, the market remained attractive despite a slight decline in growth, enabling high margins or significant returns when selling a share.
However, the current situation is more nuanced. Game development professionals often regarded other business niches with disdain, citing superior financial metrics as the reason.
And now, everything has changed.
Without resorting to the usual doomsaying about the hypercasual market, it still represents a massive portion of global installs, accounting for 26% of all mobile games in 2023. A few years ago, almost every project had the potential to soar. But currently, out of a thousand new games, there might not be a single hit.
The majority of installs continue to cluster around older projects, which publishers have developed and supported for years using a model akin to games-as-a-service. Yes, working in this market is both possible and necessary (our corporate group alone garnered more than two billion installs last year), but it's also essential to realistically assess the profitability of this sector.
The casual market has witnessed a similar shift. Previously, it was feasible to secure funding for a prototype without any metrics, primarily because the success rate among such projects was about one in 10-15. Nowadays, it's rare for companies to invest in projects without preliminary metrics. Exceptions exist for teams with an impressive background, but this doesn't mitigate the extremely high competition in the market. This all implies that it's nearly impossible for a small, young team to launch a successful project. There are success stories in the market, but focusing on them would be to fall for the classic survivor bias. Market growth has slowed, advertising effectiveness has decreased, and margins have normalized.
To develop a successful casual project now, it's crucial to invest in a team of several dozen people, acknowledging that several attempts might be necessary before releasing a project ready for scaling.
Let's take a closer look at how the business has changed over the past few years in terms of costs and profitability, examining both the hypercasual direction and the business models for casual and midcore, which have now become one of our priorities for further development.
Three to five years ago, hypercasual games were at their zenith, often developed by just one or two individuals. A single core mechanic, coupled with relatively straightforward visuals, was sufficient to catapult a game to the top, achieving margins exceeding 50% after considering
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