Dive Brief:

• In-app purchase revenue for mobile games dropped 35% globally since Apple's App Tracking Transparency update in June 2021, AppsFlyer reported on Feb. 23. Following the iOS 14.5 update, which bars mobile apps from gathering tracking data without user permission, gaming app installs on iOS declined 6% while Android saw 22% growth.
• Gaming apps spent $14.5 billion on user acquisition globally in 2021, with the U.S. commanding half of budgets. Apple's privacy changes led to a 13% year-over-year dip for iOS, contrasting with Android's 35% surge that put overall spending on user acquisition at an 18% increase from 2020, per AppsFlyer's "State of Gaming App Marketing" report.
• The sharp decline in in-app purchase revenue illustrates a monetization challenge in the gaming sector as marketers and consumers adjust to a heightened focus on privacy.

Dive Insight:

Data privacy has evolved into a massive conversation in the marketing industry in recent years. Chatter picked up again in June 2021 when Apple announced its App Tracking Transparency update that restricts what mobile user data can be gathered. The move significantly limits insights for mobile gaming marketers, forcing them to get creative in how they market and measure their efforts.

"Data privacy in the United States has become one of the biggest growing concerns around technology, and this is reflected in the 39% consumer opt-in rates of Apple's ATT framework — which is much lower than the global average," AppsFlyer head of gaming Brian Murphy said in the report.

Mobile gaming has skyrocketed since the pandemic's onset, pushing marketers to invest heavily in gaming app content and ads. Apple's ATT framework moves last year made this more challenging and impacted overall downloads and revenue. In response to the tech giant's privacy changes, marketers appear to be shifting focus to Android.

AppsFlyer reported that in-app ad revenue increased 55% on U.S. Android devices, driven by hyper-causal and hardcore games. Total gaming app installs for Android increased 22% last year, per the report. In-app purchase revenue remained mostly constant in 2021 for Android but ticked upward 10% toward the end of 2021, suggesting marketers are starting to shift budgets away from iOS apps as they adjust to ATT changes.

"Consumer privacy will continue to improve as limitations of data usage will be introduced in other platforms. Gaming marketers in 2022 must focus on engagement and measuring," Murphy said in the report.