Mobile game spending drops 5% as inflation causes market to cool

The Candy Crush Saga logo displayed on a phone screen.Jakub Porzycki | NurPhoto via Getty ImagesSpending on mobile games declined last year as consumers got more frugal with their

purchasing decisions in response to rising inflation, according to a report from app analytics firm Data.ai.Mobile game spending fell 5% globally in 2022, to $110 billion, Data.ai,

which was formerly known as App Annie, said in its "State of Mobile" report Wednesday. The report also looks at the broader state of sectors like mobile ads, retail and social

media apps.Nevertheless, first-time installs of mobile titles rose 8% to a record 90 billion, with so-called "hypercasual" titles leading the gains."We are seeing this major theme

emerge of people being more price sensitive and financially more conservative," Lexi Sydow, head of insights at Data.ai, told CNBC, adding that the "biggest hit" to spending on

apps was in gaming.Faced with economic headwinds such as higher prices and borrowing costs, people are cutting back on discretionary purchases. Gaming especially has come under

pressure.Global sales of games and services, including console and PC games, were expected to contract 1.2% year-on-year to $188 billion in 2022, according to a July research note

from market data firm Ampere Analysis.In recent years, growth in mobile gaming has been the dominant story in the games industry, with major publishers making big bets on mobile

game developers.Read more about tech and crypto from CNBC ProEarly last year, Take-Two bought mobile gaming firm Zynga for $12.7 billion. In 2016, the maker of Candy Crush Saga,

King, was purchased by Activision Blizzard for $5.9 billion. U.S. tech giant Microsoft, meanwhile, is banking on continued growth in mobile gaming with its proposed $69 billion

takeover of Activision Blizzard.That growth has been challenged lately by a number of macroeconomic headwinds, however, including a rise in the cost of living and higher interest

rates.In 2020, Microsoft and Sony launched their respective next-generation gaming consoles, giving mobile more competition.Last year also saw a return to in-person activities and

a normalization of travel rules from the height of the Covid-19 pandemic in 2020, when much of the world was hunkering down at home.Non-gaming apps proved more resilient in 2022,

according to Data.ai's research, with the value of purchases in such apps rising 6% year-over-year to $58 billion. The growth was driven mainly by subscriptions and in-app

purchases in streaming platforms, dating apps and short-form video services like TikTok.Downloads of non-gaming apps grew 13% from the previous year, to 165 billion.That did little