Installs down 7%, revenue up 1%: Sensor Tower's State of Gaming and the end of volume UA
Sensor Tower's State of Gaming 2026 puts mobile installs down 7% and revenue up 1%, confirming the shift from download volume to lifetime value.
Installs and revenue: two numbers, one direction
Sensor Tower released its first State of Gaming report on 25 February, and for the first time it folds PC and console in with mobile rather than running three separate briefings. The combined picture: 52 billion game downloads across all platforms in 2025, mobile in-app purchase revenue of roughly $82 billion, up about 1% year on year, and mobile installs down around 7%. Steam premium revenue came in at $12 billion.
Put the mobile figures side by side and the direction is unambiguous. Installs fell by a meaningful margin while revenue still grew. Sensor Tower frames that as the industry shifting from download volume toward retention and monetisation, and the arithmetic supports the reading: a market only grows revenue while shrinking its funnel if it is extracting more value from the players it already has.
A second report, a similar story
This is not the first time this quarter that Sensor Tower has put a number on the same trend. Its State of Mobile 2026 report, covered in these pages under the headline "Playables nearly doubled their share of creative," also put mobile IAP revenue near $82 billion, though it framed year on year growth at 1.3% rather than 1%, and called it a third consecutive year of growth. Close enough to describe the same underlying trend measured slightly differently, then, rather than a contradiction worth much scrutiny. Both reports agree on what matters for a UA team: downloads are softening, and growth strategy is tilting toward lifetime value rather than new-user count.
Genre detail in the new report reinforces the point. Strategy and puzzle led revenue growth, categories associated with long session histories and deep monetisation curves rather than viral, install-heavy loops. Neither has a reputation for cheap CPIs.
What this changes on a dashboard
None of this means installs stop mattering. It means a UA manager still reporting success primarily in cost per install is reporting the wrong number to a leadership team increasingly reading revenue-per-install and retention curves instead. A flat or shrinking top of funnel alongside growing revenue is not a UA problem to fix. It is the market's new baseline. Judge campaigns against it.
Practically, that argues for a change in how budget gets weighted. Push test-and-learn money toward LTV-predictive signals rather than day-one install cost, since a cheap install that churns by day three now works against the market trend rather than with it. And treat any market or channel still delivering install growth at the expense of revenue per user with more scepticism than it would have earned twelve months ago; cheap volume in a shrinking-installs market usually signals low-quality traffic, not an efficient channel.
One further move, less obvious than the budget arithmetic: bring retention and monetisation teams into UA budget conversations earlier, since the report's framing suggests leadership will increasingly ask why UA does not already sound like it has.
The report's authors describe this as a strategic pivot for the industry. It reads more like a lagging confirmation of what several UA teams were already doing by the second half of 2025: buying better-qualified users in smaller numbers and asking creative and product teams to do more of the work that used to fall to volume.
There is a finance-side implication too, and it is worth raising before a budget review rather than during one. A leadership team that has read the same coverage of this report a UA manager has will arrive at the next quarterly review already primed to ask why the team still chases growth through install volume when the market's own data says volume is contracting. Bring a revenue-per-install trend line to that conversation instead of reacting once someone asks for it. That is the difference between looking ahead of the market and looking caught out by it.
