New report reveals that 83% of mobile games fail in the first three years after launch

Why it matters: A survey among hundreds of developers provides some troublesome insight into the mobile gaming business. The “live service” model doesn’t seem to work very well on smartphones and tablets, with failure being the likely outcome for the majority of development efforts.

Creative market research company Atomik Research interviewed 500 developers in the US and UK, highlighting a less than stellar trend within the mobile gaming industry. The Good Games Don’t Die report states that 83% of games launched on mobile platforms fail within three years, while 43% can’t even survive the development phase and are cancelled before release.

The report says that 76% of mobile games reached their peak revenue within the first year, but only a meager 4% can achieve the same result during the second year. Fickle casual users that game on mobile devices aren’t the only reason for this trend, as only a minority of developers are seemingly willing to adopt a proper “live” gaming service approach.

Atomik Research found that over half of mobile developers provide live services in their games, but 38% don’t release regular content or updates. Less than half developers release monthly updates for their games, and just 5% of games receive extended support seven years after launch.

The failure rate of new gaming ventures is staggering, and yet 78% of developers still prefer to work on new projects. Over a third of the surveyed developers said that the “uncertainty in the industry” is stopping them from creating new mobile game experiences, while 30% of them feel that the current market is too tough to provide a reasonable chance for success.

Two-thirds of mobile studios have recently experienced layoffs, downsizes or budget cuts, the report states, with 29% of developers cutting their budget for user acquisition (UA) as well. SuperScale CEO and founder Ivan Trancik stated that the game industry is living through some extremely volatile times, with increasingly negative outcomes for mobile-focused ventures.

Many mobile developers are unable to remain profitable in these hard times, Trancik said, facing challenges such as Apple’s App Tracking Transparency, heavy competition in a mature market, and macroeconomic conditions like high inflation levels. The Good Games Don’t Die whitepaper should serve as a wake-up call for the industry, Trancik added, a source of inspiration with actionable data for both developers and publishers to maximize their revenue for games “both new and old.”