With the new year ahead of us, members of the AppLovin team gathered to make 2022 predictions for mobile gaming, app development, and the ad-tech industry. Read on for their predictions and insights into cryptocurrency, NFTs, the creator economy, and more –– and what they think the future holds in the year ahead.
Cryptocurrency and play-to-earn will grow.
“Crypto, NFTs, Web3 infrastructure and protocols present exciting opportunities for virtually every industry. At the intersection between crypto and gaming, we see early signs of a new business model of play-2-earn and on-chain virtual asset ownership. It’s still very early for these new business models however, investment into and the community around the space is growing exponentially. Much as we saw in prior business models and platform evolutions we expect crypto to increase audience, transparency, and inclusion. The market can expect several contenders to fight to be the ‘back-bone’ of the play-to-earn ecosystem, making it highly fragmented to start, but likely to consolidate and standardize over time.”
–– Keith Kawahata, Head of Games, AppLovin
NFTs will continue growing in gaming.
“Non-fungible tokens (NFTs) will grow bigger in gaming, becoming a mainstream alternative to centralized and custodial ownership of virtual assets. This is already providing opportunities for players, creators, and developers within gaming the ability to monetize and collaborate in new exciting and decentralized ways. According to nonfungible.com, more than $2 billion was spent on NFTs during the first three months of 2021 alone, marking a 2100% increase from the fourth quarter of 2020. We expect to see this growth continue in 2022, with gaming acting as a first mover to build functional utility and technological advancement across the web3 ecosystem.”
— Keith Kawahata, Head of Games, AppLovin
More studios will lean toward broad market casual to shift from hyper-casual to longer life cycle games with higher monetization potential.
“We expect more studios to lean toward broad market casual – to shift from hyper-casual to longer life cycle games with higher monetization potential. We also expect to see more games doing both ad and IAP monetization. As this happens, ad-monetized casual games are likely to focus more on improving IAP monetization, while mid-core and core games will try harder to cater to a broad market audience. We expect a continued shift to in-app bidding. And, along with this shift, more of the benefits created by bidding, including: 1) operational efficiency for developers, 2) increased competition for ad inventory, which drives up CPMs, 3) improved monetization enabling more UA firepower, and 4) more growth, ultimately, for developers and the mobile app ecosystem.”
— Idil Canal, General Manager of Business Solutions, AppLovin
Mobile developers will invest more into alternative mobile payment methods.
“2022 will see mobile developers investing more into alternative mobile payment methods. Discounts will be provided to incentivize users to create accounts for this separate payment flow. The first users to adopt it will be the top spenders in high LTV games in the MMO, Strategy, and Casino categories. Adoption will become more common and payers will eventually seek out these discounts in every game. The additional margin that developers gain through alternative payment methods will then be invested back into user acquisition budgets.”
— Jerome Turnbull, Vice President of Growth, AppLovin
Creator Economies will be gold mines for marketers.
“Marketers’ toolboxes have been forever changed and expanded as we emerge from the pandemic and live in a vibrant creator economy world. Consumer behaviors, particularly their use of apps on mobile devices to conveniently conduct and enjoy all aspects of life, coupled with the proliferation of content creation platforms, are creating greater opportunities for marketers to more easily monetize and market to defined, engaged audiences.
“Specifically, travel, fitness, medical, and second-language apps will continue to see download growth and significant consumer engagement post-pandemic. Duolingo went public after expanding its own monetization practices that made its 95% freemium model profitable. Ecommerce is another rapidly growing app vertical for marketers to pay attention to as consumers have adopted new habits and are accustomed to pandemic-era conveniences — 92% of consumers who tried online shopping in 2019 became converts, according to McKinsey.”
— Katie Jansen, AppLovin Chief Marketing Officer
Health and fitness apps will continue to rise in popularity.
“We expect to see health and fitness apps continue to rise in popularity and evolve to appeal to different, savvier audiences. App Annie’s State of Mobile 2021 Report estimated that, in 2020, over 71,000 health and fitness apps were launched globally. The pandemic fueled the idea that ‘fitness can be anywhere,’ and more mainstream apps have found ways to reach fitness enthusiasts with broader app selection and class instruction. Gone are the days where you need to book a class and/or head to the gym. With the increased selection of apps, instructors can reach a wider at-home audience and offer shorter, more snackable workouts that can be done in 10 to 15 minutes or less.”
— Katie Jansen, AppLovin Chief Marketing Officer
Businesses will continue growing at healthy rates.
“While the pandemic impacted and slowed down many companies, we have seen some businesses grow very quickly despite the circumstances. Fundamentally, companies now on the other side of the pandemic are doing very well and growing at a very high rate, and valuations reflect that. Of course, you always want to be watching your flanks and figuring out how to manage potential risks if they do come. Debt markets are very inexpensive, equity markets are strong, and access to capital is high. But I think as any investor — public or private — would argue, we need to be careful of what could cause the music to stop.”
— Herald Chen, AppLovin President and Chief Financial Officer
Visit the AppLovin YouTube channel for videos about monetization, user acquisition, and how to drive growth for your apps.
Learn more on How to build a sustainable revenue stream.
