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After a red-hot run, mobile gaming is set to cool down as it heads into 2025, putting pressure on studios to stop looking for small pockets of growth and make big bets on fresh business models that tap potential on the fringe. Venturing into the “fringe”—the spaces outside core products and traditional platforms—is a bold move that positions companies to uncover new growth opportunities at the edge of their operations, where new audiences, formats and distribution models await. It’s the concept championed by business strategist and author John Hagel III , who argues that even in saturated markets, companies can unlock growth by “scaling the edges” that hold untapped potential.
Done right, this approach allows companies to transform these “edges” into profitable new cores over time, enabling them to buck economic downturns and discover new avenues for sustainable growth. Hagel’s approach aligns neatly with the mobile gaming space, where a perfect storm of conditions is set to reshape the industry landscape. The meteoric rise of gaming has begun to level out while the cost of acquiring valuable players has skyrocketed.
And, although interactive entertainment data intelligence firm Aldora forecasts mobile gaming will see modest growth of 3.6% this year , reaching $109.3 billion in revenue, these gains are overshadowed by opposing factors that challenge profitability.
Studios are feeling the strain as high-profile closures, massive layoffs and game shutdowns make it more challenging—and costly—to produce winning titles. Escalating user acquisition costs, compounded by privacy regulations like GDPR and Apple’s App Tracking Transparency (ATT) framework, have weakened traditional performance marketing, limiting companies’ ability to acquire new audiences affordably. The challenges extend beyond cost: players are showing signs of fatigue with established game mechanics.
According to the Global Games Market Report 2024 by Newzoo, a provider of games market data, global playtime has seen a “substantial decrease.” The outcome is a striking imbalance, where fewer large studios and titles capture an increasing share of total playtime. 3Ds drive growth in a downturn With fewer games, rising costs, and dwindling player attention, growth is harder to come by in today’s mobile gaming market.
The way forward lies in a strategy focused on three key growth areas—the “3Ds”: Distribution , which involves leveraging new platforms and approaches to reach and engage players; Diversification , exploring unconventional methods to deliver the right game to the right audience; and DTC , building brand loyalty by fostering direct-to-consumer connections with players. To illustrate how companies successfully broaden their perspectives and embrace these opportunities, I draw on insights from three accomplished gaming marketers and entrepreneurs. Their innovative approaches to the 3Ds demonstrate how venturing to the fringe positions studios to drive sustainable, profitable growth, even in a challenging market.
#1 Distribution: Breaking new ground with truthful experiences In today’s competitive landscape, savvy studios are redefining distribution by reaching players in unexpected ways, moving beyond standard ads and app store placements to acquire and monetize audiences. Cosmic Lounge , a Helsinki-based studio in the puzzle game space, is leading the charge to unlock new growth with a twist on an old model. Unlike many studios that rely on misleading or deceiving ads to drive downloads and deliver a disappointing in-game experience that alienates players, Cosmic Lounge has developed a proprietary technology that enables teams to quickly prototype and deploy snackable game content that aligns with what players see in ads, as Gus Viegas , VP of Marketing at Cosmic Lounge, tells me in an interview.
In practice, he says, the company’s Puzzle Engine taps no-code tools to “level the playing field and boost the distribution of entirely new games that are created in lockstep with player preferences.” This empowers studios to compete on experience and not resources, so even startups with limited resources can create a multitude of mini-games and gameplay experiences. “It’s not about tricking the user with misleading ads or cheating them with the mass production of copycat games; it’s about delivering a customized experience to each player segment,” Viegas says.
“And when players see that our content matches their expectations, we see stronger engagement and loyalty.” Indeed, pairing the in-game experience with ad content at scale has delivered significant business benefits. Early internal data shows that integrating and distributing gaming experiences that mirror ad content leads to significant improvements across the funnel, including “a 25%-30% reduction in cost-per-retained-user without any decrease in retention,” according to Viegas.
He anticipates this number will “rise to a 50% reduction in CPRU” as the company expands its market testing, its library of new minigames, and their ability to personalize the player experience. Viegas’ advice: “Invest in no-code tools that empower your teams to prototype, test, and iterate rapidly without heavy technical lift.” By distributing authentic, snackable gameplay that meets players’ expectations, even smaller studios can have a significant impact—reducing acquisition costs and building lasting engagement and trust.
#2 Diversification: Exploring entirely new environments As traditional user acquisition channels become more expensive and less effective, forward-thinking studios recognize the need to expand beyond app stores and conventional platforms to reach new players and reduce dependency on app store visibility. One company putting this strategy into action is Felicity Games . The Indian casual games developer and publisher has successfully leveraged Nostra, a fast-growing games discovery platform that brings games directly to users’ lock screens and device interfaces.
With over 200 million monthly active users and a catalog exceeding 500 games, Nostra—one of the disruptive platforms operated by Glance , a consumer technology company backed by major investors, including Jio Platforms, Google, and Mithril Capital—dominates as the largest mobile gaming platform in India and Southeast Asia. Plans are underway to expand this reach to 1 billion users by the end of 2025 , cementing its position as the go-to platform for game discovery. “It’s about simplifying discovery and putting games right where users spend the most time—their lock screens,” Deepak Venkatramani , Vice President of Business & Operations at Glance, tells me in a recent PocketGamer.
biz podcast interview . “We’ve nearly doubled engagement compared to traditional app store channels, which shows that reaching players when they’re naturally engaged is a game-changer for both developers and players.” [Full disclosure: Pocketgamer retains my services as a podcast host.
] Felicity has experienced this firsthand. “Nostra really helped us kickstart our journey,” Anurag Choudhary , Felicity CEO, told me on the podcast. Since launching its first game last year, Felicity has published over ten games on the platform, reaching over 1 million monthly active users across 14 countries.
The unbeatable combination of lower user acquisition costs and higher player engagement helped the studio secure $700,000 in pre-seed funding . “Having a diversified mindset from the start was essential,” Choudhary says. “It allowed us to quickly see what resonates with players, refine them based on real-time player feedback and scale up the games that show real promise.
” Choudhary’s advice: “Understand player preferences before committing extensive resources and double down on efforts once player feedback and strong engagement metrics confirm you have a high-potential title on your hands.” By moving beyond traditional app stores, Felicity has minimized acquisition costs and risks while maximizing exposure and engagement—proof that diversification can offer a powerful edge when competition is fierce. #3 DTC: Move from gameplay to media experience In the evolving mobile gaming landscape, direct-to-consumer strategies are emerging as a powerful tool for building sustainable growth.
By connecting directly with players, studios can bypass traditional gatekeepers, engage audiences more meaningfully, and transform games into enduring brands. Kooapps , with its flagship game Snake.io, is achieving this and more by crafting a multimedia ecosystem that enhances player connection and extends brand value.
The popular game now features live events, player-customized avatars, and, more recently, a comic series that brings in-game characters to life, deepening the brand’s appeal. It’s a winning combination that allows Kooapps to engage a global player base of over 30 million monthly active users, “with retention rates consistently outpacing industry benchmarks,” CK Wang , CEO of Kooapps, told me during a podcast . “The game is just the beginning,” Wang explains.
“Our goal is to evolve Snake.io into an enduring media brand. The comic series is just one step—we’re exploring new content formats like animation and user-generated content, which will keep players invested and engaged with the brand in ways beyond gameplay.
” This expansion into media allows Kooapps to create multiple touchpoints with its players, fostering a sense of belonging and long-term loyalty. The strategy isn’t just about engagement—it’s about measurable results. “When we introduced new social and personalization features, we saw not only a boost in retention but also an uptick in average revenue per user,” Wang notes.
This kind of growth aligns with broader industry trends. Earlier this month, mobile gaming and entertainment giant Playtika reported Q3 2024 revenue of $620.8 million , with revenue from DTC platforms increasing 8.
3% year-over-year to $174.4 million. Such strong results underscore the financial viability of DTC models, demonstrating that a focus on direct engagement can drive both player loyalty and revenue growth.
Wang’s advice: Start small, but think big. “Think about how your players want to engage with your brand—not just your game,” he advises. This could mean introducing social features, crafting multimedia content like comics or animations, or empowering players to contribute through user-generated content.
No matter the path, the pivot to DTC is about future-proofing the game and deepening relationships with the players. “If you build the connection, the revenue will follow.” Find Your “Fringe” for Sustainable Growth The lesson for businesses navigating turbulent times is clear: don’t just play the game, change it by exploring new horizons beyond the core.
In a volatile market where traditional growth strategies fall short, studios must look to the fringe for new opportunities. The success stories of Cosmic Lounge, Felicity, Glance and Kooapps show that venturing beyond the core and embracing innovative approaches can drive sustainable growth, even in challenging economic conditions. Admittedly, embracing the fringe, as Hagel advises, is no easy task.
It takes smart players who know when to raise the stakes and when to hold back, carefully studying the cards they’ve been dealt. Yet for those willing to venture beyond the familiar, the rewards can truly reshape the future of their business..
