Mobile gaming is in flux. After years of post-pandemic turbulence, layoffs, and platform battles, the industry is finally regaining momentum, but the rules of making money are changing fast.

The middle ground between indie hits and blockbuster franchises is vanishing, user acquisition is more cutthroat than ever, and new revenue models are opening up opportunities that didn’t exist just a few years ago.

To help make sense of it all, we sat down with Joost van Dreunen, CEO & Co-Founder at ALDORA, games industry analyst, author, and long-time observer of the business of play, to explore what the “reboot” of mobile really means, why ads aren’t the enemy anymore, and where developers should be looking next if they want to thrive.

“We’re Out of the Fog, But Innovation Is Missing”

Q: Earlier this year, you described mobile as going through a reboot. Do you still see it that way?

Yes. After the bloodletting of the last few years, companies are coming out of the fog at great expense, but with a better footing. Mobile is showing year-over-year gains, console sales are strong, and even the Nintendo Switch 2 sold over 5 million units in its first month.

A big part of that growth is coming from more affluent players. The bottom half of the market is spending more, driving steady, single-digit momentum. At the same time, studios have lowered costs through efficiencies: user-generated content has matured as a production model, and generative AI is cutting expenses in everything from asset creation to testing.

The short-term picture looks healthier, but innovation is missing. Publishers are taking fewer shots on goal, and smaller studios inside big publishers are being shut down. Everyone is leaning on proven formulas. That gives us a recovery now, but it risks long-term stagnation.

The Death of the “Middle Class”

Q: You’ve said the “middle class” of games is disappearing. What does that mean for mobile?

The industry is polarized. On the demand side, you’ve got free players and whales, with fewer people in between. On the supply side, it’s the same: AAA blockbusters and small indies, while mid-tier studios struggle to survive.

Mobile makes this tougher because success requires infrastructure, robust analytics, performance-based marketing, and massive UA budgets. Mid-sized companies cannot compete. The result is a negative space: incumbents build moats with technical sophistication, while tiny teams stand out by being scrappy and original.

Every once in a while, you see breakout successes from smaller studios like Balatro and Silksong that prove it’s still possible. Shawn Layden, the former PlayStation exec, has long championed this “middle class,” warning against AAA bloat and calling for more room for creative AA and indie projects. But overall, the middle has been hollowed out.

Platforms Are Cracking — Direct-to-Player Is Rising

Q: With recent platform changes, including Epic vs. Apple, what impact do you see on monetization?

The ruling cracked the walls around mobile ecosystems. For years, platforms controlled payments and kept publishers inside their walled gardens. Now developers can point players toward alternative payment methods.

Supercell is a good example: inside its games, it directs users to its website where they can buy in-game currency for the same price but get 20% more. That 20% represents the platform fee they’re no longer paying.

The financial shift is modest (about $4 billion in a $100 billion market), but symbolically, it’s huge. It signals the start of direct-to-consumer relationships becoming standard. Publishers, large and small, should be exploring these opportunities now.

UA Beyond Installs: Building Worlds, Not Just Ads

Q: What’s the most promising playbook for user acquisition on mobile today?

Performance-based marketing has been the default for a decade, but it’s no longer enough. The next wave is brand-driven. Gaming IP is crossing into TV, film, merchandise, and theme parks. Think Sega’s Sonic the Hedgehog movies or Supercell’s upcoming Clash of Clans animated series.

Players no longer see games as isolated experiences; they’re part of broader cultural universes. That’s where loyalty and discovery happen. For mobile, that means building an audience with more than just gameplay. You must tell stories, expand your world, and create touch points beyond the app store.

And this isn’t just about reach. As direct monetization gets harder in platform economies, indirect revenue models like ads, sponsorships, and partnerships are becoming necessary, not optional.

Why Ads No Longer Cheapen the Experience

Q: A few years ago, many developers resisted ads in games, saying they cheapened the experience. Has that changed?

It has. Think of the film industry in the 1920s: cinema was highbrow, then TV arrived with ads and was dismissed as lowbrow. But TV became the mainstream medium, and advertising funded its creative explosion.

Games are in the same moment. AAA titles are seen as the prestige standard, and ads once felt beneath that. However, integrated the right way, ads can actually enhance immersion, add realism, and provide sustainable revenue.

Resisting ads means staying stuck with old costs: paying platform fees and building costly direct monetization funnels. Embracing ads means creative freedom! Developers are realizing ads don’t have to ruin the premium feel and that they can actually unlock new possibilities.

The Future: Monetization as Creative Playground

Q: Looking ahead, what monetization trends should mobile developers expect?

We’ll see a broader variety of models. Direct-to-consumer payments will grow, and indirect revenue through ads, brand sponsorships, and hybrid approaches will become more meaningful.

History shows business model innovation drives growth as much as technology does. League of Legends, for example, succeeded because of free-to-play design, not cutting-edge graphics. Mobile’s next chapter will come from studios experimenting with new ways to reach and monetize players, not just polishing gameplay.

The industry has always been driven by creative problem-solving. That applies to revenue as much as it does to design.