Last week, in How to manage marketing spend during a recession, I wrote about how advertisers might think about diminishing monetization in their products during the onset and over the course of a recession — how a reduced level of overall consumer spending could violate the LTV models that drive advertising spend across the app economy.
It’s fairly easy to imagine which app verticals might be impacted the most adversely by the Coronavirus pandemic: dating, travel, and ridesharing being chief among them as people quarantine themselves at home and avoid interpersonal contact. And this has largely proved true: Tinder, Uber, Bumble, Lyft, Airbnb, and Booking.com have all experienced chart ranking declines (iOS, US) since the beginning of the year, with some declines (Airbnb, Lyft) being quite dramatic:
But what about categories that one might expect to do well during a quarantine — fitness, health and wellness, food delivery, etc.? Interestingly, the performance of dominant apps in those categories has been muddy since the start of the year:
The presumption behind these rankings declines being that they are the result of marketing spend decreases, which may actually run counter to increased engagement over the past few weeks during widespread quarantine.
The reason for this is that the Coronavirus pandemic was always going to manifest in two stages: 1) an initial period of quarantine, during which many people experience an increase in free time while their disposable income levels remain unchanged, and 2) a protracted recession, during which many people experience a sharp decrease in levels of disposable income. Perhaps many of these app publishers are preparing for the latter by reducing marketing spend while enjoying the benefits of the former.
And thus an analysis of app verticals during this period turns to gaming. Video gaming is generally thought to be a recession-resistant consumer category: during recessions, as consumers exhibit a reduction in discretionary spending, expenditure on entertainment is directed to the lowest-cost options, meaning that game sales might actually increase (since the per-hour cost of entertainment for games is lower than eg. movie tickets, theme park tickets, etc.). This hypothesis didn’t completely hold true during the 2008-2010 global financial crisis: while video games sales increased in 2008, they dramatically decreased in 2009 as the recession wore on.
But free-to-play mobile games didn’t appreciably exist during the global financial crisis — the App Store only launched in 2008. Free-to-play gaming represents the lowest possible price point for entertainment — $0 — and it stands to reason that free-to-play games would see a surge in engagement not only during a quarantine but also during a drawn-out recession. I have heard anecdotal evidence that this is the case over the past week — gaming companies describing increases in their daily advertising spend as retail, travel, dating, etc. advertisers stop competing for impressions.
But the reality is that these boosts in engagement are not evenly distributed across the entire category but rather are concentrated in a handful of games. Many mobile games publishers are seeing decreased engagement in the same way that other app verticals are.
One publisher for which this is evident is Zynga. Zynga had three games in the Top 500 downloaded as of March 20th, 2020, two of which — Words with Friends 2 and Game of Thrones Casino — saw a surge in downloads from early-to-mid March, and the third of which, Solitaire, saw its download position decline over time from the beginning of the year.
King had three games in the Top 500 downloaded as of March 20th, 2020, and all three of them — including its new release, Knighthood — saw declining downloaded positions over the course of 2020:
Scopely’s new Scrabble game (launched in early March) saw upward movement in the downloaded chart, but its other major games have mostly declined in position over the course of 2020:
Supercell saw generally upward movement but precipitous declines over the past week in all four of its major titles:
Playrix’s Fishdom has consistently climbed the top downloaded chart rankings since the beginning of the year, whereas its other major titles have mostly remained flat (with Wildscapes, its latest release, intermittently appearing in the top 500):
Hypercasual titan Voodoo launched a number of titles into Top 10-50 downloaded positions since the beginning of the year, although its older titles have mostly been flat or declined (eg. aquapark.io, Hole.io):
And the same is true of Good Job Games, another hypercasual mainstay within the Top 100 downloaded:
All of this raises the question: if the largest gaming publishers aren’t seeing engagement increases, which publishers are? Sorting the rankings data by 1) steepest positive downloaded chart regression line from January 1st through March 20th and 2) apps being at least in the Top 100 by March 20th, the following apps seemed to have benefited the most from the quarantine stage of the Coronavirus pandemic:
There are only two games in this list: Fishdom, from Playrix, and ABCmouse.com, from Age of Learning. Every other app fits into the use case of a pandemic, from communications (Skype, Zoom, Houseparty, Messenger Kids, Marco Polo), to virtual work and education tools (Google Slides, Remind), to home delivery (Sam’s Club, Instacart), to local news (Smartnews). Games seemingly haven’t actually found growth opportunities during this time — at least not to the same extent that these other categories have.
It remains to be seen which verticals see the most growth as the quarantine phase of the Coronavirus pandemic gives way to the recession phase. But as it stands now, gaming hasn’t been the primary beneficiary of this moment.