This article is part of a Gaming Insights series paid for by Facebook.
The pandemic triggered a boom for games and gamers, a bright spot in a darker world. In their homes, avid gamers were able to play more, and discover more titles. New gamers came into the fold, playing casual and mobile games and first-person shooters alike; all gamers were able to connect with each other. And overall, the market surged to unprecedented heights.
But as the world returns to something closer to the old normal in many parts of the world, the forecast is changing. The total gaming market is expected to hit $175.8 billion in 2021, which is actually down, for the first time in a few years, by 1.1% from $177.8 billion in 2020.
“The global pandemic resulted in more people playing than ever before, but one thing to be aware of as we forecast ahead, we will see a shift in consumer behavior as we get slightly less time for leisure and gaming,” says Brian Colbert, Director of Gaming Sales for the Americas, at Facebook. “That’s going to be an effect we all have to navigate around in the coming months.”
However, the biggest single development this year has been Apple’s new requirements around mobile advertising, and the move toward ad tracking transparency (ATT). Since April, the iOS14.5 changes have been impacting game businesses that advertise their mobile apps, as well as those that monetize using in-app ads. The gaming industry has historically relied for many years on IDFA (Identifier For Advertisers), providing the ability to monitor and track consumer behavior — and companies are finding ways to adapt and evolve to the new advertising landscape.
“Rightfully so, consumers have pushed back and said, we deserve to have our privacy around what we browse and consume protected,” Colbert says. “Advertisers and advertising platforms need to evolve as we all work together to drive business value with personalized ads that are privacy-centric.”
Advertising ecosystem changes are impacting businesses’ ability to reach people with relevant, timely ads. These changes are particularly disruptive for gaming companies that relied on third-party data used to reach people and optimize campaigns. The cost of achieving business outcomes may have increased — but brighter times are ahead.
The Q4 2021 holiday boom
The holiday season is historically a key period for gaming sales, with mobile downloads and in app-revenue from games peaking at this time of year. This holiday sales season will be more important than ever, especially for game companies looking to close the gap. A number of macro trends are pointing to the strong likelihood that this season will be big, Colbert says.
As we head into the end-of-year holiday sales period, consumers are ready to spend. In fact, the NPD Group reports that 29% of consumers plan to spend more on holiday shopping than they did last year. Consumer sentiment is at historic levels, financial optimism is up — and with consumer spending intentions on the upswing, people are clearly ready to treat themselves and others.
The biggest boon of all: the pie is larger, with close to 3 billion people who are gaming in some way, shape, or form. Growth might be slowing down overall, but there was still an impressive increase of 5.4% from 2020 to 2021, and the market is still set to reach $218.7 billion in 2024 without breaking a sweat. Mobile gaming alone should bring in about $120 billion in 2021, or a 20% increase vs year’s average.
This will also be the first full year for the new consoles, with an audience of consumers eager to buy — or be gifted one — this holiday season. And across the board, for both console and mobile gaming, there will be more titles available than there were after last year’s somewhat thin offering, due to COVID-related delays for some game launches.
Now is the time for companies to leverage the Q4 holiday marketing window to take advantage of this confluence of forces.
Capitalizing on the 2021 holiday season
There are a number of ways that game companies can ensure they’re staying on top of holiday shopping trends this year, beyond relying on the traditional bump in sales.
Auction pricing drops
In years past, pre-COVID, consumers were able to get goods shipped at the last minute, right before the holidays. This year, given ongoing supply chain issues, Colbert predicts that some major retailers will shift that window up a bit. As retailers close up their marketing for the year in that earlier mid-December time frame, it opens up less competition in any auction-based platform for gaming advertisers.
“We think there will be opportunities for gaming companies to take advantage of this extended window of marketing, by taking advantage of better auction pricing,” Colbert says. “What hurts the retailers might actually help the gaming companies attract some consumers.”
But this year it’s also important to that gaming companies not just rely on the tried-and-true methods of attracting or targeting their hardcore users.
“As the audience of gamers has increased, developers can take advantage of this opportunity by broadening their audiences — finding the newer or more casual gamers and converting them into loyal customers,” he says.
It’s also time to start looking at the full holiday calendar. Across the world, there are a number of key holidays from early November through New Year’s. Even in places where Christmas is celebrated, the window for gift giving can vary significantly. Consider timing your advertising buys carefully to the calendar.
Navigating the new normal
The holiday season will be a huge boon to game companies, but in this new world, where the audience is bigger and advertising is more difficult and more expensive, it’s time to start thinking in the longer term.
Embrace AI-powered auctions
With the ATT enforcement by Apple, advertisers needed a way to continue hitting KPIs (or business objectives) with limited campaigns and optimization levers. Facebook’s Automated App Ads product allows advertisers to rely on machine learning to still find high-quality users despite these challenges.
“There’s a tendency for gaming companies to try to pull levers and dials and manipulate their targeting on their own,” Colbert says “The Automated App Ads product uses a proprietary algorithm to find the best and most valuable users across our various platforms and do it in an automated fashion.”
Evolve user acquisition
User acquisition is essential, but it can’t be the end-all, be-all. It’s only a part of a much larger equation for successful growth.
“The biggest piece of advice I can offer is to take a full funnel approach,” Colbert says. “That’s something we’re trying to hammer home. Brand plus performance is where you have to go.”
While ATT has impacted user acquisition, that’s not the only reason to widen your strategy — that’s just the proper marketing mix, he adds.
Rethink the relationship
The question needs to go beyond, how do we find customers, and become, how do we keep them?
“User acquisition has been the barometer of success in the gaming world, but I would challenge both ourselves and our gaming partners to think about the customer relationship,” Colbert says. “It’s not just how you acquire that customer, but how you keep them, how you communicate with them, how you engage with them and delight them over the long term.”
To gain additional insights into the best times to advertise your games on Facebook during the holiday season, visit here.
 NPD,”29% of Consumers Plan to Spend More on Holiday Shopping Than They Did Last Year, Reports NPD,” September 2021; Source: NPD survey.
 App Annie,”State of Mobile Gaming 2021,” 2021. Source: App Annie Intelligence; Downloads and Consumer Spend are across iOS, Google Play, Third-Party Android in China combined; Spend is gross — inclusive of any percent taken by the app stores
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