Gaming apps to spend $48.5 billion on user acquisition by 2022

By Igal Frid
gaming app install ad spend

Gaming is the trailblazer within the mobile industry, and it has followed a remarkable trajectory fueled by savvy marketing teams and a sophisticated, aggressive approach to gathering and interpreting data. It’s an incredibly competitive space, and it shows no signs of slowing down. 

According to AppsFlyer’s analysis, app install ad spend* in gaming totaled $22 billion in 2019. We project that spend will more than double by 2022 when gaming app marketers will allocate $48.5 billion towards user acquisition (UA) worldwide. 

First, the overall context: We recently released a global app install ad spend projection that indicates a robust growth in UA budgets across all verticals, which we expect to hit $118 billion in 2022. That’s almost one third of total mobile ad spend (which includes in-app and mobile web ads across display, video etc).

But within the overall app economy, the gaming vertical is in a league of its own. A deep-dive reveals a projected 30% year-over-year growth through 2022, with gaming UA attracting about 40% of all app install acquisition budgets.

We project that every region will experience healthy growth from 2019 to 2022.


The state of gaming app marketing


Key findings per region


Driven by massive gaming markets like China, Japan, and Korea, APAC’s gaming UA spend is the world’s highest, and is expected to double from $12.8 billion in 2019 to $25.8 billion in 2022.

Although China is the #1 app market in terms of spend, it is particularly challenging to measure because there are hundreds of 3rd party Android stores instead of a single Google Play (which is not available in China).

However, advances in the market’s measurability have enabled us to include the country in our forecast for the first time. As such, we estimate that gaming UA spend in China reached at least $5 billion in 2019.  

Gaming powerhouses Japan and Korea boast the highest user LTV in the world. As a result, the cost of media is the highest globally at $2.8 per gaming install in Japan and $3 in Korea. This pushed total gaming UA spend in Japan to surpass $800 million in 2019, while Korea attracted budgets totaling roughly $700 million. 

Because hardcore games are extremely popular in these markets, 25% of non-organic installs in gaming are in this genre. It is therefore no wonder that total gaming spend in Japan and Korea is so high given that it costs nearly $10 to acquire a hardcore gamer in these countries. 

North America

UA gaming spend in North America is a distant second in total spend but we forecast it will grow faster — specifically, 135% from $5.3 billion in 2019 to $12.4 billion in 2022.

The region’s large user base and its high cost of media (about $2.2 per gaming install thanks to high user LTV) qualify the market as tier 1 for game developers across the globe (unlike China, Japan and Korea where localization is a significant challenge; if it weren’t for this challenge, spend figures would have been much higher in these markets).

Within genres, casual gaming installs dominate the US market with over half of non-organic installs. At more than $1.5, the cost to acquire a casual gamer in the US is the highest in the world.

Although the cost of acquiring hardcore gamers in the US was high at about $5 in 2019, only 7% of non-organic installs in the country belong to this genre. The US is also the world’s largest social casino market, where CPIs surpass $4, thereby attracting significant spend.  


This fragmented market will enjoy a significant 156% growth in gaming app install ad spend from $3.7 billion in 2019 to $9.5 billion in 2022.

In Western Europe, the UK and Germany lead the way with hundreds of millions of non-organic gaming installs and a CPI of about $1.4. Total gaming UA budgets in 2019 hit $560 million in the UK and $530 million in Germany.  

Russia is the largest market in EMEA with almost 500 million non-organic gaming installs in 2019, but the cost of media in the market is low at about $0.45 per installs. As a result, overall spend on gaming UA in 2019 was just $220 million.

Latin America

The region as a whole, and particularly Brazil, has seen significant growth in the last couple of years, reaching massive scale. However, the cost of gaming installs in LATAM is extremely low (around $0.25 per gaming install), making total spend relatively small.

Nonetheless, its anticipated growth will top all other regions — from $300 million in 2019 to $800 million in 2022 or 165% higher.

Rise in app install ad spend in Gaming explained 

Mobile gaming is exploding, but so is the competition

According to App Annie, consumer spend in mobile games (smartphone and tablet) surged to more than $80 billion in 2019, and is expected to surpass $100 billion in 2020. 

Billions of users now have a mobile device to play on within reach. The rise in access and usage has driven gaming apps to grow their user base, putting heavy pressure on marketers to meet demand. 

But with hundreds of thousands of gaming apps to compete with, discovery is a massive challenge, leaving marketers no other choice but to invest in UA to draw attention to their game. As a result, more than 57% of installs among gaming apps with a minimal marketing budget are non-organic. 

Data-driven to the core

Gaming app marketers have to fight for every install while increasing their UA budgets to generate growth. But they must also drive profitability. With better data-driven tools, skilled data analysts, and proven strategies, game marketers — more than in any other vertical — can confidently invest in marketing and drive return on ad spend.  

This confidence also allows marketers to focus more on the ads themselves. They can direct resources toward creative and toward different ad placements and then arrive at the best strategy to acquire quality users, at scale and for the optimal price. 

Organic growth has taken a hit

It’s very difficult to reach new users through generic keywords when they are often overused in app stores and when new games are launched on a daily basis across all genres. With endless options to choose from, the capacity of any game beyond the top charts to find its way to a user’s device is slim to none.

Growth on both ends of the genre spectrum

Hardcore games (e.g. strategy, role playing)  are becoming more popular because of advances in device power and hardware that can support them, leading to deeper and longer sessions. As a result, they attract no less than 76% of consumer spend in Gaming, according to App Annie. 

Because of the high user LTV in hardcore games, the cost of media is high which is why it accounts for the majority of overall gaming app install ad spend (about 37% of global budgets vs. 32% in casual games).

On the other end of the spectrum are Hyper Casual games. These easy-to-develop and easy-to-play games rely on ads to drive revenue, and are attracting millions of users, many of whom did not previously play games. 

Because the margins of these games are low, they rely on scale and must therefore employ aggressive UA strategies. Having said that, the cost to acquire a hyper casual user is relatively low, which means the impact on overall spend in gaming is smaller than with hardcore games.

Rise of in-app ads, especially rewarded video

The smarter use of ads in the game flow and the fact that only about 5% of players monetize via in-app purchases have made ad revenue a significant revenue stream. 

According to a recent IDC report, in-app ad revenue is growing more than four times faster than in-app purchases (26% per year compared to IAP’s and paid mobile games’ 6.2% growth). Improved monetization means more money in the bank which can then be channeled toward increases in UA budgets.

Mobile gaming game-changers?

Technological advances could have their own seismic effects on mobile gaming in the next few years.

5G is coming

Sure, there are significant hiccups along the way and it’s far from ubiquitous, but once the networks are up and users have adopted 5G phones, mobile gaming will be transformed.

Game industry experts can’t predict exactly what effect 5G will have on gaming, but they do anticipate that it will be a disrupter along the lines of Spotify and Netflix and move the gaming vertical past free-to-play into subscription monetization models. 

5G will, of course, deliver richer content and faster delivery, and enable more social (group) gaming. Moreover, hardcore games and others with sophisticated content will be more portable, with a “play anywhere” capacity and a surge in diverse content that will appeal to a broad range of players.

Cloud gaming is also coming

With 5G, cloud gaming on mobile is also expected to herald a new era in gaming. When video games are coupled with the power of the cloud, the data processing that underpins gameplay will occur on remote servers, rather than on the devices (consoles or gaming PCs) themselves.

With cloud gaming, any user with a device that has access to the internet will be able to connect and jump right into a game. 


Note: The predictive modeling applied in this forecast took place prior to the outbreak of the coronavirus. It is still too early to determine the effect it will have on spend in the face of such economic uncertainty. As of March 15, 2020 we did not notice any significant change in mobile gaming ad spend this year compared to previous years.

We will revisit the model later to determine whether an update is in order.

Our model is primarily based on AppsFlyer’s own data, which included over 30 billion non-organic installs, $48 billion in ad spend, and 72k apps in the 2017-2019 sample. 

We also used other parameters, such as 3rd party mobile attribution market share data, cost per install prediction per region, number of apps in the app stores, and the number of installs.

The entire set was divided into the following two categories: the attribution market share of non-organic installs (excluding Firebase and Facebook analytics for apps) and the non-attributed market (marketing-driven installs that were not measured through a mobile attribution provider). Note that this division was not shown in the report above, but was a factor in the overall methodology.

*App install ad spend is the amount of money invested in direct response advertising campaigns that are aimed at driving users to the app stores to download an app. It is a subset of overall mobile ad spend, which comprises mainly of and includes mainly search, brand and video display budgets aimed at driving non-organic app installs.

Sources used include:

Igal Frid

Igal Frid is the Mobile Insights Specialist at AppsFlyer. He brings half a decade of experience with digital advertising leaders ironSource and Universal McCann, focusing on brand advertising, growth strategy, and the mobile gaming ecosystem. Igal is passionate about data, trends, and graphs, but his favorite question (in every subject) is “Why?“ You can follow him on LinkedIn or Twitter.

Follow Igal Frid

Ready to start making good choices?