State of Gaming at $81.8B + The Playable Strategy Behind Flambe’s $10M/Month
From the Editor
What's up friend?
Big week. We've got a live webinar locked in, a new article breaking down how Microfun turns playables into audience exploration machines, and Sensor Tower just dropped its annual State of Gaming report.
Plenty of numbers that tell a clear story: mobile's growth era is over. The efficiency era is here.
Live Webinar: UA Creative Strategy in the AI Gold Rush
March 10, 2026 | 3:00 PM UTC
Everyone's making more creatives but speed without strategy is just expensive clutter.
I'm sitting down with Gonçalo Martins (VP Marketing, UA & Monetization, BoomBit) and John Wright (CEO, Turborilla) for an honest conversation about what happens when every team has access to the same AI tools.
Where speed actually helps, where it just creates noise, and what a strategy-first creative pipeline looks like when AI handles production.
Free to attend. Recording sent to all registrants.
What Does Winning UA with Playable Exploration Look Like?
Microfun's Flambé: Merge & Cook pulls roughly $10M/month in IAP revenue. Their creative strategy explains a lot of it.
At launch they were producing about 200 creatives a month. Today: 720 new creatives, 57 new playables in the past 30 days, and roughly 25 completely new concepts. Each playable targets a specific adjacent audience: hidden object players, sort puzzle fans, cooking sim audiences. But every concept connects back to the core merge gameplay.
Systematic exploration of adjacent audiences through playables. Each concept fishes for players who would love the full game but would never discover it organically.
The article walks through specific playable examples and reverse-engineers the rationale behind each one.
👉 Dig deeper and read more here
Unpredictable Hits Podcast, sitting down with Asi Burak, CBO at Tilting Point
Tilting Point's Chief Business Officer joined us for a conversation that covers territory most gaming podcasts avoid. UA financing models. The economics of launching games when you don't own them. IP management as a core business strategy.
Asi has operated across the full spectrum, from indie publishing to enterprise-scale portfolio management. Worth the listen if you think about games as businesses.
👉 Listen now on sett.ai/content
Report Spotlight: Sensor Tower State of Gaming 2026
The annual report dropped, and the headline is clear: mobile gaming is massive, but growth has flatlined.
$81.8B in mobile IAP revenue in 2025. Up just 1.3% YoY. Third straight year of growth, but the growth rate is near zero. And for the first time ever, non-gaming apps surpassed games in mobile IAP ($85.6B vs $81.8B), driven by generative AI, streaming, and social media.
The big creative shift. Image ads collapsed. Nearly 12 percentage points were lost in a single year (44.9% to 33.0%). That share went to playable ads, which more than doubled from 6.3% to 13.3%, and video, which climbed to 53.7%.
Meta dominates social UA. Instagram + Facebook combined now hold 69.2% of social mobile game ad spend, up from 54.0% in 2024. TikTok and YouTube both dropped from ~20% to ~12%.
Strategy was the only genre to grow downloads across Asia, North America, and Europe simultaneously. IAP revenue grew ~20% YoY, driven by 4X hits from Eastern developers.
The publisher power shift. Century Games climbed 10 spots to #3. FUNFLY jumped 5 to #7. Revenue flow moved East: Asia gained $2.58B, North America lost $1.78B.
The report's own guidance is clear: growth through efficiency. Prioritize retention, tighter payer management, disciplined UA payback.
Industry Buzz
1. Matthew Ball's State of Gaming: China Is Eating the Industry
The big picture: Global games hit $195.6B in 2025, an all-time high. The growth is real. It's just not coming from where Western studios expected.
- China = 20% of spending, 38% of growth. Chinese publishers claimed roughly half of all global spending growth since 2019.
- 44,000 layoffs across 2022-2025 (61% in North America). Mobile spend flat for five years. Private funding collapsed 55% in 2025.
👉 Dig deeper into Ball's full State of Gaming analysis
2. Pixel Flow: A Publisher's Dream
The story: A small Turkish studio of just ten people, built without publisher backing, later acquired by Scopely on February 19. An overnight success, six years in the making.
- $500K+/day in revenue within four months of launch. ~$180M annual run rate.
- Closest competitor (Voodoo's This Is Blast) peaked at ~$40K daily. Pixel Flow hit $500K+. The founders shipped 120+ games over six years before finding this.
👉 Dig deeper into the Pixel Flow breakdown
3. Top Heroes: AI Creatives Making $20M/Month
Why it matters: RiverGame's Top Heroes generates $20M/month by mimicking multiple RPG franchise aesthetics. Skyrim, Final Fantasy, Zelda, Diablo. Each style targets a different niche.
- Sister title Dark War: Survival runs a creative portfolio that is 90%+ AI-generated.
- This kind of diverse creative execution wouldn't have been possible a year ago. The scale of concept exploration has changed.
👉 Dig deeper into the AI creative portfolio
4. Gossip Harbor Surpassed Candy Crush
What happened: Phillip Black flagged it. Gossip Harbor, built by Chinese developer Microfun, surpassed Candy Crush Saga in revenue. The innovator's dilemma playing out in real time.
- The pattern repeats. King wasted resources on Rebel Riders. Krafton wandered before returning to PUBG. Zynga came back to Poker and Words with Friends.
- Black's point: the big guys keep getting bored with what works. They chase shiny new projects instead of optimizing their cash cows. Meanwhile, studios like Microfun stay locked in and take the throne.
👉 Dig deeper into Phillip Black's analysis
5. Meta: Focus on Feed, Not Reels
The takeaway: David Vargas, managing 100+ apps, says Feed placements outperform Reels and interstitials for mobile UA on Meta. Placement selection matters more than production quality.
- Feed = deliberate browsing. Users scroll piece by piece. Ads get actual visibility. Reels = doomscrolling. Ads get skipped in milliseconds.
- Counterintuitive: introducing UGC videos shifted spend away from Feed, and CPA increased.
👉 Dig deeper into the Feed vs. Reels data
6. Creative Pipelines That Don't Break Under Pressure
The thesis: Algorithms now control most campaign mechanics. The bottleneck is creative production. A structured pipeline changes the output dramatically.
- Concepts per brainstorm: 5-6 before, ~20 after. Production cycles cut from one month to two weeks.
- The playbook: quarterly strategy briefs, weekly competitive monitoring (5-10 competitors), constrained brainstorming tied to market insights.
👉 Dig deeper into the full pipeline framework
7. The Largest Genres by DAU Tell a Different Story
The surprise: Match 3 sits at ~98M DAU. Dominant. But Short Drama platforms pulled 108M DAU with game-like mechanics: energy systems, gated progression, virtual currency.
- Block + Match Pair Tile combined: 143M+ DAU. FPS/3PS still pulls 51M+ DAU at 8th place, higher than expected for "console native" genres.
- Gamigion's take: the next generation of mobile publishing giants may not be game studios. They may be Short Drama platforms.
👉 Dig deeper into the full DAU rankings
Also Worth Reading
Blizzard's Overwatch Rush - Another mobile gamble after Warcraft Rumble. Cosmetics-only monetization, 3-minute matches, emulating the PC experience on mobile. Analysts are skeptical.
👉 Dig deeper into the Overwatch Rush critique
AI Can Build Your Prototype, Not Your Strategy - Faster building can lock in flawed assumptions before they're tested. Teams need experienced judgment to go from playable to scalable.
👉 Dig deeper into the prototype-to-strategy gap
Can AI Deconstruct Game Economies? - Google's Pierre Ratrema tested a 3-step AI framework. AI captures what exists, struggles with why.
👉 Dig deeper into the AI economy analysis
New Mobile Games Feb 13-19 - Coin-sorting becoming a contested sub-genre. SayGames, Lion Studios, Paxie Games all competing. Unreal Engine runners gaining traction.
👉 See the full new releases roundup
Wrap Up
The throughline this week is exploration. Microfun explores adjacent audiences through playables. Loom Games explored 120+ titles before finding Pixel Flow. Top Heroes explores every RPG aesthetic with AI. Even Matthew Ball's report shows the entire industry exploring where growth comes from next.
The teams winning are building systems that let them explore faster.
See you next time.
Yours, Jonathan (Fishi) Fishman
About the Author
Fishi is the Head of Marketing at Sett. His brain is a chaotic jukebox of ideas with more cultural references than any feed can handle. He collects sneakers and plays chess while you’re still counting sheep.
