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Is the Western mobile games industry losing to China?
The mobile gaming industry in Western markets—defined as North America, Europe, and Australia—is experiencing a significant shift in market share, with Chinese, Hong Kong, and Singaporean publishers now controlling 30% of total revenue, up from 16% in 2019.
- Chinese, Hong Kong, and Singaporean publishers have nearly doubled their Western mobile market share from 16% in 2019 to 30% in 2026.
- Chinese publishers now control 60% of the strategy genre revenue, a massive increase from 11% in 2015, driven by integrating hyper-casual mechanics into 4X strategy frameworks.
- While the overall mobile market grew by 3% in Q1 2026, total downloads dropped by 13%, signaling that revenue is increasingly consolidated among established titles at the expense of new entrants.
Premium: Driving Back Catalogue, DLC, and the Long Tail
Super Evil Megacorp has successfully pivoted from a high-cost, free-to-play competitive PvP model to a sustainable, premium, cross-platform strategy centered on PvE experiences.
- Super Evil Megacorp (SEMC) achieved a 'reverse curve' in user engagement for TMNT: Splintered Fate, with daily active users (DAU) growing year-over-year for three years post-launch rather than experiencing the typical post-launch decline.
- The studio successfully transitioned from a free-to-play mobile-first model (Vainglory, Catalyst Black) to a premium, cross-platform strategy by leveraging their proprietary 'Evil Engine' to ensure high-quality, native experiences across mobile, PC, and console.
- SEMC manages a portfolio of five active titles—four live and one in production—using a fully remote workforce spread across 11 countries, maintaining profitability by avoiding over-scaling and relying on internal cash flows rather than further venture capital.
🚨📢 BREAKING NEWS: Royal Kingdom Adds Ads, Playtika Exits Social Casino, Mistplay Buys Mychips
The mobile gaming industry is currently undergoing a significant shift in monetization and user acquisition strategies, characterized by a move toward casual gaming, the consolidation of rewarded ad platforms, and the abandonment of "no-ads" policies by major studios.
- Dream Games has abandoned its 'no-ads' policy for Royal Kingdom, integrating interstitial and rewarded ads as of February 2026 to drive daily downloads from 100,000–300,000 up to 600,000.
- The addition of ads to Royal Kingdom generates an estimated $170,000–$190,000 in daily revenue without cannibalizing in-app purchases, with markets like Brazil showing simultaneous growth in both revenue streams.
- Playtika has pivoted away from social casino games, which are now in managed decline, to focus on casual titles that currently represent 76% of its business.
TWIG #383: Turkey Dominates Puzzle Games, Royal Kingdom’s Struggles, and Playtika’s Big Shift
Turkey has solidified its position as a global powerhouse in the puzzle and hybrid-casual game sectors, driven by a sophisticated ecosystem of repeat founders and aggressive government subsidies.
- The Turkish government is fueling the local puzzle and hybrid-casual game sector by reimbursing up to 70% of overseas user acquisition costs.
- Turkish game studios are shifting away from traditional probabilistic casual game models toward skill-based mechanics to gain a competitive edge in saturated markets.
- Major mobile publishers like Playtika are pivoting away from legacy social casino models in favor of casual titles to combat stagnant growth in established genres.
The Mistplay Audience Network: Smartest UA Expansion of 2026! 3X reach, same quality
Rewarded user acquisition has transitioned from a niche tactical experiment into a foundational pillar of the mobile advertising stack, currently representing 20 to 30 percent of typical studio budgets.
- Rewarded user acquisition has become a foundational mobile advertising pillar, now accounting for 20% to 30% of typical studio budgets.
- Industry reliance on rewarded traffic has grown significantly, rising from negligible levels to nearly 10% of total advertising spend.
- The Mistplay Audience Network has consolidated inventory streams like MyAppFree and Connected Rewards into a single, unified buying engine.
Sega-Rovio woes, Playtika goes casual, Unity's turnaround, pitching investors, data nuggets, more
The mobile games industry is currently defined by a shift toward pragmatism, consolidation, and a strategic pivot away from traditional free-to-play models.
- Sega is pivoting away from free-to-play mobile initiatives following a $200 million write-down related to the underperformance of its Rovio acquisition.
- Unity’s financial turnaround is anchored by its Vector adtech product, which achieved an 80% year-over-year revenue increase.
- Playtika has officially shifted its corporate strategy to prioritize casual gaming titles, such as Disney Solitaire, while treating its legacy social casino business as a non-growth asset.
🧠 MVP UA template AXON: How to set up your Applovin for Success by Matej Lancaric
AppLovin’s Axon platform functions as a high-performance, automated user acquisition engine that requires a distinct strategic approach compared to Facebook or Google.
- Creative assets are the primary performance driver on AppLovin, with playables accounting for 80% to 90% of total ad spend.
- Top-performing games maintain high creative velocity by producing and shipping over 60 new playable assets per month.
- Abandon traditional geo-bucket campaign structures in favor of a worldwide approach, using geo-level ROAS targets instead of geo-level budgets to manage traffic.
I Videogiochi in Italia nel 2025
The Italian video game market in 2025 demonstrates significant stability, generating a total turnover of 2.4 billion euros.
- The Italian video game market generated 2.4 billion euros in 2025, with software sales accounting for 77 percent of total market value.
- Mobile gaming is the primary revenue driver at 929 million euros, with the freemium model generating 97 percent of that segment's income.
- Digital distribution is the industry standard, representing 65 percent of new title sales across console and PC platforms.
State of Gaming: China & Strategy Domination
Chinese game publishers are currently achieving significant global dominance in the mobile sector, particularly within the strategy, shooter, and casual game genres.
- Chinese publishers are dominating Western mobile markets by prioritizing proven mechanics and rapid iteration over creative experimentation, as seen in titles like Whiteout Survival, Last War, and Gossip Harbor.
- These studios utilize 'creative factories' and centralized publishing teams to manage live operations across entire portfolios, enabling the immediate transfer of successful engagement strategies between games.
- Chinese firms maintain a competitive advantage over Western developers through superior operational velocity, high-intensity work cultures, and lower development costs optimized by proprietary AI models.
🚨📢 BREAKING NEWS: Applovin Record Revenue, More Layoffs, EvE online sold back
The gaming industry is currently experiencing a period of significant corporate restructuring, marked by record financial performances for some entities and aggressive downsizing for others.
- AppLovin reported record Q1 revenue of $1.84 billion, a 25% year-over-year increase, while Unity posted a $347 million loss despite a 17% revenue increase to $508 million.
- CCP Games is being sold back to its CEO by Pearl Abyss for $120 million, a significant drop from its $425 million valuation in 2018.
- Supercell acquired Metacore, resulting in a 30% workforce reduction at the studio as part of a strategic shift in the merge-game genre.
‘GTA 6 players are in for a console price shock’
The gaming industry is currently navigating a precarious economic landscape defined by rising hardware production costs, shifting consumer behaviors, and significant legal challenges to established platform business models.
- A £2.6 billion class-action lawsuit against Sony in the UK is challenging digital storefront commission fees, with a resolution expected within 18 months that could fundamentally restructure PlayStation software pricing.
- Rising hardware production costs are forcing a shift in market positioning, moving consoles away from mass-market accessibility toward luxury goods for high-income households.
- The gaming industry is facing a supply-side crisis where development and hardware expenses are outpacing consumer purchasing power, potentially leading to delayed future console generations.
S07, E15: The modern mobile gaming economy (with Phil Black)
The mobile gaming industry is undergoing a structural transformation characterized by market consolidation and a pivot away from the unsustainable hyper-casual model.
- Direct-to-consumer (DDC) web shops are becoming a standard strategy for midcore games, particularly in the 4X genre, to bypass platform fees and increase LTV, with some third-party providers now offering fees as low as 5%.
- The competitive advantage in user acquisition (UA) has shifted away from creative output—which is easily cloned—toward sophisticated predictive infrastructure, such as cohort-level modeling and signal engineering.
- The mobile gaming market is experiencing a consolidation of revenue into puzzle and 4X genres, with hyper-casual games serving as a 'minor league' farm for testing mechanics that are later integrated into more complex, high-revenue core loops.