2025 Mobile Games Marketing Predictions

As we enter 2025, the digital advertising and mobile gaming industries are transforming remarkably. Despite initial concerns in the post-IDFA era, there are encouraging signs of growth and opportunity, albeit on a smaller scale than many of us anticipated just a few years ago.

As always, there are winners and losers, and within mobile gaming, certain genres stand out as clear frontrunners. Casino, Puzzle (Casual), and Strategy games are flourishing, with blockbuster titles like Monopoly Go and Royal Match driving incredible success. Even when factoring out these standout performers, these categories continue to experience levels of growth, propelled by a broader shift in player preferences.

Post-hyper-casual, today’s gamers are seeking more engaging and robust experiences, which is evident in the shift toward casual gaming and the surging popularity of live ops in leading titles. One game I’ll be keeping a close eye on this year is King’s up-and-coming Candy Crush Solitaire. Could card games emerge as the next big growth genre in 2025?

Looking ahead, the biggest opportunities I see for growth and innovation in 2025 will center around advancements in AI-driven content creation, new monetization opportunities utilizing e-commerce, loyalty programs, and hybrid casual. These trends are reshaping how businesses approach user acquisition, product development, and retention. From AI-powered tools that are driving down ad-creative costs to loyalty programs reinventing rewarded traffic, and the continued rise of hybrid-casual games evolving into broader casual markets, these shifts present both exciting possibilities and unique challenges.

In this article, we’ll dive into four key predictions and innovations that marketers should closely watch in 2025. Each trend offers actionable insights for marketers, developers, and advertisers navigating the ever-changing landscape of mobile gaming and digital advertising.

Prediction #1 AI Tools: The Return of Single-Digit Dollar Ad Creatives

Over the past year, we’ve witnessed an explosive rise in the adoption of AI tools by marketing teams. 

Creative AI technologies enable marketers to produce video and static content ready for deployment, significantly reducing the time designers need for re-edits, a major pain point for many teams. One prominent trend is the rise of AI-generated user-generated content (UGC) and AI-driven actor-based material, fundamentally reshaping the content creation landscape. 

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As demonstrated above, content can be created in a fraction of the time using a wide array of tools. Some of the leading platforms include:

• Midjourney: For high-quality visual content.
• Poolday.ai and Creatify: For video-based ads featuring AI-generated actors.
• Blkbox.ai: For quick ad variations and personalization.

In recent years, the cost per creative has returned to pre-hyper-casual levels, with some agencies charging thousands of dollars per video asset. However, I predict that the widespread adoption of AI tools will enable studios of all sizes to significantly lower their production costs. In some cases, the cost of creating an ad could drop to under $10! The next evolution that we will see is the creation of the first AI-generated playable ad which I am confident will happen before the end of 2025.

The integration of AI into marketing workflows has democratized content creation. Teams can now:

• Produce high-quality ads in minutes.
• Test and iterate quickly to find winning creatives.
• Significantly reduce production costs.

As we move deeper into 2025, the creative marketing landscape will continue to evolve. Studios and marketers that embrace AI tools will have the agility to outperform their competitors, benefiting from the immense speed, variety, and cost-efficiency that AI-generated content provides. Over time, this could also create a race to the bottom, where speed prevails and quality drops, in that world the developers with established brands and IPs start to prevail as the difference in production value shines through and captivates an audience looking for the anti-AI ad.

Prediction #2 AppLovin: E-commerce Advertisers Increase AdRevenues

LinkedIn is on fire with e-commerce marketers praising AppLovin’s recent surge in performance, with many claiming it exceeded holiday expectations and outperformed their previous favorite, Meta, in terms of user quality and ROAS. For the first time, users were not only seeing ads for other games, but seeing creatives for a wide range of products, including clothing, makeup, and electronics.

However, for those of us in mobile gaming, this evolution is no surprise. AppLovin has steadily increased its profitability (EBITDA) and gross revenue through some of the most strategic and impactful acquisitions the industry has ever seen. Products like AXON and MAX have made the company into a powerhouse.

For those not familiar, AXON is AppLovin’s AI-driven ad-matching technology. It delivers exceptional results by pairing ads with users in highly effective ways, enabling developers to achieve unprecedented ROAS performance and scale. 

Now with gaming conquered AppLovin is moving on to a new frontier, E-commerce. Capturing the coveted “brand dollars” from advertisers has been challenging. For years, industry experts speculated that if gaming could attract substantial e-commerce spend, the revenue potential would be immense.

What does the influx of e-commerce ad dollars mean for gaming? Simply put, brand budgets and eCPMs tend to be larger and that has a direct positive impact on LTV, increasing ARPDAU across the board.

AppLovin’s e-commerce offering is currently limited to select advertisers who meet certain criteria, including a minimum spend level on Meta. Additionally, the service is only available in the U.S. When AppLovin expands access globally, the industry will likely see a significant positive impact. 

The increase in e-commerce advertisers buying gaming inventory should lead to a general uplift in eCPM and, consequently, ARPDAU and ARPU. If the demand and supply continue to be well-matched by AXON, I would estimate an overall performance increase of 10-20% in LTV per user, which could be a game-changer for developers balancing the classic CAC vs LTV equation in this extremely difficult climate.

One potential challenge to monitor is the impact of increased competition for users. If advertisers from outside the gaming ecosystem begin targeting gaming audiences, this could very easily drive up costs for UA, increasing CPI’s dramatically, which in turn reduces DAU, and as we all know, this is very bad for studios. 

While the monetization benefits are clear, the potential downsides for UA efforts warrant careful observation. Balancing these positives and negatives will be crucial as the ecosystem continues to evolve.

Prediction #3 Loyalty Programs: Growing To 10%+ Of Your Marketing Mix

Loyalty programs are hardly a new concept; they can be viewed as a modern iteration of one of mobile’s longest-standing ad units, the OfferWall. Many of us in mobile gaming recall OfferWalls in two distinct ways:

1. A means to earn in-game currency in mid-core games, often accepted begrudgingly.
2. Annoying surveys and spamming offers we wished would disappear from our experience.

However, loyalty programs have evolved significantly. Today, companies are developing high-quality ecosystems with their own loyal user bases who prefer earning real-world rewards instead of in-game currency. These companies are even running their own UA campaigns to grow and scale their networks further. More users = more earning potential for them.

Rewarded traffic presents both challenges and opportunities for marketers, as these users follow different LTV curves compared to typical players. Unlike traditional users, rewarded users are incentivized to reach specific milestones to claim rewards and often disengage afterward. Setting optimization events too far from the break-even point can result in overspending. To avoid this, marketers should align optimization events close to the break-even milestone, balancing risk and scale since longer milestones see fewer completions.

UA strategies have shifted from prioritizing volume to focusing on high-quality users due to rising CPIs, reduced budgets, and increased user value. For example, while AppLovin’s rewarded video traffic may target a D7 ROAS goal of 30%, Mistplay may require deeper milestone optimizations, such as reaching level 150, to break even. Loyalty programs are also expanding, reporting double-digit CAGR in many cases. 

To date, loyalty programs have made up on average <5% of your average marketing mix but now with the right balance of scale and quality, and by selecting appropriate optimization events, loyalty programs will grow to 10%+ of the UA mix in 2025. This diversification becomes even more crucial as UA spending generally decreased post-IDFA depreciation and after the COVID-19 bubble, reinforcing the need for varied acquisition channels.

Prediction #4 Hybrid Casual: The Future of Casual Gaming

Hybrid-casual has become the mobile gaming buzzword of 2024, though it remains hard to define. Is it a true genre or simply a monetization model blending IAP and ads? Evolving from hyper-casual gaming, it is dominated by familiar names like Voodoo, Lion Studios, and SayGames, which were forced to adapt to survive after IDFA deprecation.

The era of acquiring millions of low-cost users with CPIs under $0.30 and maintaining high margins is over. This shift has thinned the ranks of successful developers. While top companies remain competitive, fewer developers thrive in this space. To balance CPIs (now $1.20 to $2.50) with LTVs of $2 to $4, hybrid-casual games have grown more complex, borrowing features from casual games. Marketing has also evolved, focusing on acquiring high-value users rather than volume. UA strategies now fully rely on understanding more complex LTV curves and longer payback periods, which can now range from weeks to 6 months. Ad networks like AppLovin and Unity have shifted from predominately CPI-based models to ROAS-targeted campaigns, increasing dependence on algorithmic optimization rather than your average growth manager leading the charge.

A standout example is Hexa Sort by Lion Studios, where players place tiles to create matches. Unlike traditional match-3 games, players must stack 10 tiles before they clear the board, adding strategic depth and enhancing the player experience. The game’s core-loop isn’t the interesting thing here though, it’s the abundance of meta and features, most of which have come directly from the market-leading casual games equivalents.

Given its mechanics, some might argue Hexa Sort is simply a casual game. This illustrates a broader trend: hybrid-casual developers are evolving into the casual, which on paper has a TAM 20 times larger. Pursuing this audience aligns with sustained growth strategies, supporting predictions that hybrid-casual and casual will eventually evolve into one.

I expect this convergence to drive a 10% CAGR for the genre overall, accompanied by a significant reduction (20%+) in revenue from interstitial ads as monetization strategies continue to evolve to be more IAP-driven. I believe we could see parity (50/50 split) by the end of 2025 for the first time for many of these winning “Hybrid” developers.

Closing Remarks

I’m cautiously optimistic about 2025. While 2024 turned out to be far more challenging than anticipated, with numerous studio closures and waves of redundancies impacting all of us in one way or another. It also underscored the importance of adaptability, with those who evolve effectively being the big winners.

The convergence of AI tools, innovative loyalty programs, and hybrid monetization models signals an exciting yet competitive landscape for mobile marketers and game developers. Success in 2025 will depend on embracing smarter automation, diversifying acquisition channels, and balancing short-term wins with long-term growth. With AI-generated creatives driving down costs and increasing agility, and AppLovin’s e-commerce expansion alongside hybrid-casual’s pursuit of broader audiences, new revenue streams are emerging. However, finding the right balance between monetization and user acquisition will be vital as strategies grow more complex and user expectations continue to rise.

By remaining open to change and driven, teams that master these trends will secure a decisive edge in our ever-evolving industry. Good luck!