February 13, 2023 • 3 min read | By Alexander Lee

For the third year in a row, the mobile gaming industry experienced a significant bump in installs and in-app purchases in December and January — and this time around, the boosted numbers are bolstering an industry poised for a run of M&A activity.

Experts in the mobile gaming space often refer to the December–January holiday season as “Q5” — an unofficial fifth fiscal quarter that consistently heralds a large spike in mobile gaming revenue. In December, mobile app installs grew across the boardbut games benefited in particular due to their use for holiday leisure-time fun.

In December 2022, mobile gaming installs were 5 percent higher than the average for H2 2022, with that figure increasing to 22 percent in January 2023, according to data shared with Digiday by Adjust.

“There could certainly be some behaviors and patterns that emerge during this time period that favor gaming more,” said Hank Patton, CEO of the mobile game studio Random Logic Games. “Certainly more than a productivity kind of app would expect, when people aren’t working and are home trying to take a break.”

The rise in mobile gaming installs in December was followed by a boost in in-app purchases in January. In-app mobile gaming purchases last month were 12 percent higher than the H2 2022 average, according to Adjust’s data.

“The kind of increase in net revenue that we see comes as a result of rapidly acquiring users at a much lower cost than was available for the last six weeks before the Q5 period,” Patton said.

In a gaming industry in which consumer spending decreased by five percent in 2022, mobile gaming is on the rise — and its best numbers for the year have come in over the last two months. As gaming companies and tech firms alike look to expand their inventory and weather the recession, these improved numbers “certainly could be used” to shore up mobile gaming studios’ acquisition dreams, according to Patton.

“The high-level rationales are going to continue to be what EA and Take-Two did, in terms of expanding their mobile footprint, because the market favors diversification across platforms,” said Chris Petrovic, Chief Business Officer of the mobile game developer FunPlus. “Much like the movie business, you have to have scale in order to weather the downturns, and also to be able to invest in future growth — and we’re seeing that bearing itself now.”

The potential for M&A activity is welcome news to smaller mobile gaming studios, who often expand with an eye towards future acquisitions. And the Q5 bump to mobile gaming revenues is evidence that the best way for mobile game developers to get snapped up might just be to keep doing what they’re doing. Whether they get acquired or not, 2023 is shaping up to be a good year for mobile gaming.

“Our CEO has built the company to sell sometime; we have to exit sometime,” said Berkay Celik, director of strategy for the mobile game studio Ace Games. “But we do not have plans on this now, because we’re focused on the product.”