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The Xsolla Report: State of Play Q2 2025

Mobile gaming has become the dominant engine of the global video‑game market, now accounting for more than half of total industry revenue and projected to exceed $126 billion in 2025, with an overall forecast of $150 billion for the segment. The surge is driven by unprecedented user engagement—4.2 trillion hours of app usage in 2024—and a rapid shift toward direct‑to‑consumer (D2C) commerce following the April 2025 court order in Epic Games v. Apple, which obliges iOS platforms to permit external web‑shops and allows developers to retain up to 95 % of transaction value. Early adopters report revenue recoveries measured in millions and a 60 % increase in user engagement for high‑volume titles. Regulatory reforms across the EU, United States, Japan, South Korea and China are dismantling traditional app‑store monopolies, mandating alternative storefronts, transparent odds disclosure and the elimination of hidden fees. Despite tighter oversight, the mobile ecosystem remains robust, with the United States generating roughly $52 billion in in‑app‑purchase sales, while emerging markets in Latin America, Southeast Asia and Saudi Arabia expand the geographic footprint. Hybrid monetisation—combining in‑app purchases, advertising and subscriptions—is employed by 72 % of developers and now represents about three‑quarters of mobile revenue; live‑ops‑driven hybrid‑casual titles are delivering a 30 % year‑over

market-analysis monetization market-forecast+2

XsollaJun 2025

Report

What Does the Monetization Landscape Look Like for Video Games in MENA?

The video game industry in the MENA-3 region—comprising Saudi Arabia (KSA), the United Arab Emirates (UAE), and Egypt—is experiencing rapid expansion driven by a young, tech-savvy population and significant government investment. In 2024, player spending in these markets reached $2 billion, a 4% year-over-year increase, and is projected to exceed $2.7 billion by 2028. While the region is home to 70.3 million gamers, it remains economically diverse: the UAE boasts the highest annual average revenue per user (ARPU) at $84.60, whereas Egypt represents a high-volume market with over five times the player base of the UAE but a much lower ARPU of $3.50. The monetization landscape is defined by a shift toward multi-platform engagement and a high percentage of unbanked or underbanked consumers. Approximately 67% of the MENA population lacks access to traditional credit or debit cards, creating a significant barrier for standard app store transactions. In Egypt, credit card penetration is as low as 2.8%, leading to the dominance of local digital wallets like Vodafone Cash. Conversely, KSA and the UAE feature high internet penetration and 5G coverage, with players increasingly favoring hybrid free-to-play models, premium titles, and subscription services. Direct-to-consumer (D2C) payment platforms and web shops are identified as critical tools for navigating these market complexities. By bypassing the traditional 30% commission fees of major app stores, developers can offer localized pricing, regional payment methods, and enhanced loyalty rewards. Findings indicate that 53% of paying mobile and PC gamers in the region have already made purchases through official game websites. Successful market entry requires a tailored approach that includes high-quality Arabic localization, culturalization of content, and the integration of local payment networks such as Mada in Saudi Arabia and Fawry in Egypt. The analysis is based on a survey of 1,200 gamers, expert interviews, and proprietary market data. It concludes that the MENA-3 region offers a strategic bridge between Eastern and Western markets, providing a gateway to nearly 400 million Arabic speakers worldwide for companies that adopt flexible, region-specific monetization strategies.

monetization market-analysis player-demographics+1

Xsolla & Niko PartnersJan 2025

Report

State of Play: Spring Edition

Mobile gaming has solidified its position as the industry’s primary driver, currently engaging 1.9 billion players and tracking toward $118 billion in annual revenue by 2027. This growth is occurring alongside a fundamental restructuring of digital commerce. Regulatory shifts, such as the European Union’s Digital Markets Act and recent judicial rulings, are dismantling the traditional walled gardens of major app stores. By forcing the adoption of alternative billing systems and out-of-app commerce, these changes allow developers to bypass standard commission fees and engage in direct-to-consumer marketing, fundamentally altering the economics of mobile distribution. The industry is simultaneously transitioning toward a cross-platform ecosystem where seamless play and unified payment systems across mobile, PC, and console are becoming standard. Consumer behavior supports this shift, as 87% of multiplayer gamers now engage in cross-platform play. Younger demographics, specifically Gen Alpha and Gen Z, exhibit a 52% payer conversion rate, significantly outperforming older cohorts. To capture this value, developers are increasingly forming strategic alliances with telecommunications providers to integrate 5G infrastructure and mobile wallets, ensuring frictionless transactions in a "cross-pay" environment. Despite a significant cooling in investment during 2023—characterized by a 75% drop in Web3 funding and a 43% decline in merger and acquisition activity—the sector is recalibrating toward a sustainable "new normal." The workforce is becoming more formalized, with nearly three-quarters of designers holding university degrees. Market analysts anticipate a recovery throughout 2024, marked by a 20% increase in deal flow and the entry of major media entities like Netflix and Disney. This stabilization is supported by a shift in venture capital toward alternative models that prioritize marketing and operational support over traditional equity-only investments.

market-analysis investment mobile+1

XsollaMar 2024

Report

The State of Play: Summer 2024 Edition

The summer 2024 Xsolla analysis argues that the game‑development ecosystem has entered a phase of unprecedented democratization, driven by low‑cost engines, open‑source tools and third‑party services that lower technical and financial barriers for creators. Unity now powers 38 % of developers, up eight percent year‑over‑year, while Unreal enjoys a ten‑percent growth and Godot records a 69 % surge. More than 40 % of indie studios rely on five or more premade asset packages, and cross‑platform toolchains enable a quarter of developers to launch on PC, console and mobile, reaching the 60 % of players who game across multiple devices. Indie titles generate 29 % of Steam revenue in 2023, up from 25 % in 2018, and the average in‑house backend spend of $21 million is reduced through services such as Xsolla. Emerging studios continue to view market entry as challenging, emphasizing the need for health‑focused initiatives and localized support networks, exemplified by growing ecosystems in regions such as Wisconsin. Gender‑specific preferences reveal that women developers prioritize completion, fantasy and design elements, underscoring the importance of inclusive design considerations. The edutainment segment is projected to expand at a 65‑75 % compound annual growth rate through 2034, with the global MOOC market expected to reach $279.3 billion and 1.12 billion participants by 2029; the United States alone accounts for $87.5 billion in 2024. Concurrently, influencer

market-analysis game-development global+1

XsollaMar 2024

Report

The Xsolla Report: State of Play (Autumn 2024 Edition)

Mobile gaming is now the dominant segment of the global video‑games market, generating $98.7 billion in 2024, of which roughly two‑thirds ($65 billion) originates from Asian economies. The rapid expansion of smartphones, high‑speed connectivity, and localized content have driven this growth, positioning mobile titles as the primary source of interactive entertainment worldwide. A pivotal shift is the emergence of direct‑to‑consumer (D2C) web shops as essential revenue channels for mobile developers. Awareness of these storefronts is extremely high, with 81 % of players recognizing them and 77 % having completed at least one purchase. Although only a small “whale” cohort—between two and six percent of the player base—accounts for 95 % of in‑app spending, this segment also delivers superior retention and lifetime value, underscoring its strategic importance for monetisation strategies. Empirical case studies illustrate the financial upside of integrating D2C web shops. Titles such as Tilting Point’s *Warhammer: Chaos and Conquest* and *Star Trek Timelines* achieved revenue lifts of up to 50 % after adding web‑shop functionality, leveraging exclusive content, personalised offers and frictionless payment methods to stimulate repeat purchases. These findings suggest that developers who adopt low‑friction, web‑based commerce can capture a larger share of the whale segment while also expanding overall player spend. Overall, the data indicate that the mobile gaming ecosystem is maturing into a highly concentrated market where a minority of high‑spending users drive the majority of revenue. Strategic investment in D2C web‑shop infrastructure and targeted offers for whales presents a clear pathway for developers to enhance monetisation, improve player retention, and sustain growth in an increasingly competitive global landscape.

market-analysis player-behavior mobile+1

XsollaJan 2024

Report

State of Play: Winter 2024

The analysis projects global gaming revenue to reach approximately $205.7 billion by 2026, up from $106.8 billion in 2023, reflecting an average annual growth rate of 3.9 percent. Mobile and cloud gaming are identified as the primary engines of this expansion, with the mobile sector alone expected to generate $111.4 billion in spend and to be bolstered by record app‑download volumes—76.8 billion downloads across iOS and Google Play in the first half of 2023. Consumer spending surged by as much as 60 percent in early 2023 before stabilising within a –10 percent to +20 percent range for the remainder of the year, underscoring the volatility of post‑pandemic demand. In the United States, women now comprise roughly half of the gaming audience and represent a significant portion of spending power, yet only 26 percent of studios report inclusive hiring practices and 18 percent provide diversity training. This disparity highlights a persistent gap between audience demographics and industry representation, even as iOS‑based role‑playing games alone generated about $1.33 billion in revenue during Q3 2023. Growth is further driven by financial realignments, the emergence of metaverse, AR/VR, and cloud‑based experiences, and evolving consumer habits that favour direct‑to‑consumer commerce. A mobile‑gaming platform that enables web‑store sales has become a major revenue source, positioning service providers as essential partners for developers seeking funding, marketing, launch, and monetisation across multiple regions. Concurrently, a cultural shift toward greater gender diversity in executive, design, and development roles is expanding the industry’s creative talent pool, reinforcing the sector’s long‑term resilience and innovation potential.

market-analysis market-forecast monetization+2

XsollaJan 2024

Report

Xsolla Report: State of Play – Winter 2024 Edition

The global gaming industry is currently navigating a period of stabilization following a massive 26% growth surge between 2019 and 2021. While the rapid pandemic-era expansion has moderated, the sector reached $106.8 billion in 2023 and is on a trajectory to hit $205.7 billion by 2026. This growth is underpinned by a global player base expanding to 3.79 billion people, with mobile gaming remaining the dominant force, accounting for nearly half of all consumer spending. Despite a downward revision in year-over-year growth forecasts to 0.6%, mobile spending is expected to reach $111.4 billion in 2024, led by strong performance in the United States and Japan. The industry is undergoing a significant structural transformation driven by technological shifts and regulatory changes. The transition toward digital-only monetization, cloud-based services, and the metaverse—projected to reach $996 billion by 2030—reflects a broader convergence with the entertainment landscape. Furthermore, the implementation of the Digital Markets Act is opening doors for alternative billing systems and direct-to-consumer web stores. These shifts occur alongside a demographic evolution where women now represent nearly 50% of the player base, though they remain underrepresented in executive and professional roles. Financial dynamics within the sector show a complex landscape of consolidation and rising costs. While AAA development budgets have tripled over the last five years, the investment market has faced volatility, characterized by a cooling M&A environment and significant layoffs. Despite a drop in deal volume, strategic investment value surged by 577% in mid-2023, reaching $7 billion in a single quarter. To counter high user acquisition costs and stricter privacy regulations, developers are increasingly adopting generative AI for efficiency and pivoting toward community-focused organic reach, early access models, and influencer partnerships to ensure long-term sustainability.

market-analysis diversity-inclusion player-demographics+1

XsollaJan 2024

Report

The Xsolla Report: The State of Play

The global gaming market is undergoing a structural transformation driven by multiplatform integration and the rapid evolution of financial technologies, with total revenues projected to reach $211.2 billion by 2025. A significant catalyst for this growth is the rise of real-time payments, which are expected to account for 28% of global electronic transactions by 2027. This shift is particularly pronounced in emerging markets across the MEA and LATAM regions, where systems like India’s UPI and Brazil’s PIX are facilitating new revenue streams. To bypass traditional platform commissions and rising acquisition costs, developers are increasingly adopting mobile web shops and hybrid monetization models, including Buy Now, Pay Later services, which are forecasted to reach a $309 billion market value by 2030. Technological advancements in cloud gaming and artificial intelligence are further reshaping the industry landscape. Cloud gaming is anticipated to reach 2.5 billion users by 2024, though it continues to face technical challenges regarding latency and infrastructure. Simultaneously, generative AI is becoming a fundamental development pillar, with over 50% of top studios expected to utilize the technology by 2024 to improve efficiency by up to 30%. Within the next decade, AI is projected to support more than half of the entire game creation process, significantly reducing production timelines and costs. The industry is also pivoting toward a more interconnected ecosystem where cross-platform capabilities are a primary consumer demand, supported by 87% of multiplayer gamers. This integration, combined with advancements in virtual reality and blockchain, is fueling the expansion of the metaverse, which is forecasted to reach a $710 billion valuation by 2027. As privacy regulations and shifting ad efficiencies challenge traditional growth strategies, the sector is prioritizing flexible payment solutions and immersive, cross-play environments to maintain global momentum.

market-analysis monetization cloud-gaming+1

XsollaJan 2023

Report

State of Play: The Future of Mobile Games

The mobile gaming landscape is undergoing a significant transformation driven by shifting monetization models, evolving regulatory environments, and the rapid integration of artificial intelligence. Current industry data indicates that while the global mobile market remains a dominant force in interactive entertainment, developers are increasingly moving away from traditional app store reliance in favor of direct-to-consumer strategies. This shift is largely motivated by the desire to bypass high platform fees and establish more robust, long-term relationships with player bases through independent web shops and cross-platform ecosystems. Technological advancements, particularly in generative AI, are fundamentally altering development pipelines and live operations. These tools are enabling smaller studios to scale production and personalize player experiences at a level previously reserved for major publishers. Furthermore, the industry is seeing a marked rise in the importance of emerging markets across Southeast Asia and Latin America, where mobile-first populations are driving user acquisition growth. As hardware capabilities improve, the distinction between mobile and high-end console experiences continues to blur, leading to a surge in sophisticated mid-core and hard-core titles that demand deeper engagement and more complex monetization loops. Strategic success in the current climate requires a multifaceted approach that balances innovative gameplay with diversified revenue streams. The integration of cloud gaming and social features is becoming essential for maintaining high retention rates in a saturated market. Analysts conclude that the future of the sector will be defined by the ability of developers to navigate privacy regulations and platform changes while leveraging data-driven insights to optimize the player lifecycle. This evolution marks a transition from a purely transactional mobile economy to a more holistic, service-oriented model that prioritizes community and cross-device accessibility.

market-analysis monetization ai+2

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