"The real challenge is not simply developing a good game, but getting users to choose it"
Keren Ran, Head of Apps and Gaming at Google Israel, was speaking at the Gaming Conference hosted by Calcalist, Google, and Playtika. According to her, "Only 6.5% of users' playing time is spent on games released this year, while more than 93% goes to established, familiar titles."
"Anyone can create a game today," said Keren Ran, Head of Apps and Gaming at Google Israel, at the Gaming Conference hosted by Calcalist, Google and Playtika. "Tasks that once took weeks can now be completed with the click of a button. Everything is accessible."
Artificial intelligence is rapidly transforming the gaming industry. While game development once required large teams, months of work and extensive trial and error, games can now be created using relatively simple prompts. New AI tools enable almost anyone to develop a game, even without prior programming experience. Ran demonstrated how a game set on the beaches of Tel Aviv, complete with falafel and an authentic Israeli atmosphere, could be generated using nothing more than a text prompt.
However, this growing ease of game development is creating a new challenge for the industry. According to data presented by Ran, more than 90% of game developers worldwide are already using AI tools in their development processes, and over 136,000 new games are expected to appear in app stores during 2026. That amounts to approximately 370 new games every day, a 13% increase compared with 2024.
"The figures are staggering, but the key question is how many of these games will survive and become commercial successes. In a world where creating a new game is so easy, the real challenge is not simply developing a good game, but getting users to choose it from an ever-expanding array of options," Ran said.
She noted that the data illustrates just how difficult that has become. Only 6.5% of users' playing time is spent on games released this year, while more than 93% goes to established, familiar titles. Furthermore, not a single game launched in 2026 appears among the world's 20 highest-grossing games. "The new rules of the game are being written as we speak," she said.
Competition for users' attention also extends well beyond the gaming industry. Users are dedicating an increasing share of their time to short-form content on social media platforms such as TikTok, Instagram and YouTube Shorts, as well as to "short-drama" apps featuring episodes that typically last around two minutes. The result, Ran argued, is what she called the "2026 Paradox": while it has never been easier to develop and launch a game, it has never been harder to persuade users to spend time playing it.
Against this backdrop of declining download numbers, Ran argued that the main growth drivers for gaming companies must be user retention and maximizing the long-term value of each user. She outlined five key trends that she believes are reshaping the industry.
"The first trend is the growing overlap between the gaming industry and other sectors. In recent years, gaming companies have sought to expand their audiences by incorporating external brands, famous characters and well-known intellectual property into their games. Now, the reverse is also happening: brands from other industries are using games and their characters to reach new audiences," Ran said.
For example, the game Brawl Stars partnered with language-learning app Duolingo, bringing its iconic owl into the gaming world. As part of a back-to-school campaign, the owl became a central character, setting up a classroom and challenging players with trivia and language-related questions during battles.
In the beauty sector, Candy Crush partnered with a luxury cosmetics brand to launch a makeup line inspired by the game's candies and color palette. In South Korea, the launch of a new Cookie Run game was accompanied by a partnership with pizza chain Papa John's, which included scratch-off cards with its pizzas that gave players access to in-game characters and diamonds. PUBG, meanwhile, expanded its brand presence through a streetwear collection created in collaboration with rapper Machine Gun Kelly's brand.
The trend also works in the opposite direction, Ran noted. Non-gaming apps are adopting mechanics from the gaming world to increase engagement and usage. Short-drama apps, for example, increasingly feature coin collection, daily streaks and viewing bonuses that users can redeem to unlock additional episodes. Duolingo has turned language learning into a challenge built around daily streaks, while many fitness apps now use structures resembling level-based games.
"The second trend concerns changes in the structure of games themselves. In the past, the industry's divisions were relatively clear, with hyper-casual, casual and complex midcore games occupying distinct categories. Today, the boundaries between genres are blurring, as companies combine different mechanics to attract a broader audience," Ran said.
One example is 4X strategy games, which traditionally appealed mainly to a relatively small audience of experienced players. Today, companies are trying to attract new users with a more accessible introduction built around simple arcade-style mini-games, gradually exposing them to the more complex strategic systems.
One successful Israeli example highlighted during the presentation was Pocket Heaven, which developed the role-playing game Rogue Legend and incorporated elements of casual board games into it.
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"The third trend is a shift in the global market landscape. For years, the United States was a major destination for Israeli gaming companies, partly because the local industry was well positioned to develop products for an English-speaking market with high purchasing power. However, the data I presented points to a change: North America recorded the weakest revenue performance, with a 9% decline, while growth was recorded in Europe, Latin America and the Middle East," Ran said.
Asia, long considered a particularly difficult market for Western companies to penetrate, is also changing. South Korea, traditionally associated with role-playing games and complex midcore titles, is becoming more receptive to casual games. The country's download charts now include titles such as Block Blast and Royal Kingdom, genres in which Israeli companies have considerable experience.
Even Japan, one of the most challenging markets for foreign companies to enter, may be opening up. According to the figures presented by Ran, more than 52% of the revenue generated by the country's top games this year came from non-Japanese publishers. This marks a significant shift from the situation a few years ago and could create new opportunities for developers from outside Japan.
"The fourth trend concerns marketing and creativity. Here, too, artificial intelligence is changing the rules of the game, but it does not necessarily solve the industry's main problem," Ran said.
According to data from AppsFlyer, major gaming publishers now produce between 2,400 and 2,600 different advertising creative variations each quarter. Despite this enormous volume, only around 2% of those creatives attract the bulk of advertising budgets.
As AppsFlyer put it: "The production problem has been largely solved, but the attention problem has only intensified."
For gaming companies, this means the challenge is no longer simply producing more advertisements. It is about developing original concepts, narratives and formats capable of capturing users' attention within the first few seconds. One format gaining traction is "playables," or interactive advertisements that allow users to experience a game before downloading it. In this way, the advertisement itself becomes part of the gaming experience rather than merely a vehicle for showcasing the product.
Ran also highlighted YouTube's growing importance to the gaming industry. "The volume of views for gaming content on this platform exceeds the combined total of views for the same category across TikTok, Instagram, Facebook and Twitch," she said. YouTube serves not only as an advertising channel but also as a place where players discover games, watch content creators and connect with surrounding communities.
The highly anticipated launch of GTA 6 is a prime example. A vast amount of content has already emerged around the game, with players using YouTube to learn about it, follow content creators and engage with the community well ahead of its official release. Millions have already purchased the game, Ran noted.
The fifth trend concerns the financing of gaming companies. Following a period in which traditional venture capital funds scaled back their investments in the sector, raising questions about the business models of gaming companies, new sources of financing are emerging. While conventional early-stage investments have declined, growth financing models, in which funding is tied to user acquisition performance, are expanding to fill the gap.
Under these models, companies receive capital to increase their advertising and user acquisition budgets, with repayment linked to the business results generated by that investment. At the same time, major game publishers are once again investing directly in gaming startups.
Beyond these global shifts, Ran highlighted several developments in the Israeli gaming industry that she said demonstrate the sector's potential. These included a $1 billion strategic deal involving AppsFlyer, a new fund raised by Vgames focusing on growth financing models, a $30 million funding round for Sett, which operates at the intersection of artificial intelligence and creative content, and the success of Disney Solitaire, developed by SuperPlay and Playtika, which climbed to the top of the U.S. revenue rankings.
"The Israeli industry has already demonstrated its ability to adapt to rapid changes, adopt new technologies and develop new business models," Ran said. "The key message for gaming companies is to use artificial intelligence not merely to produce more games and content, but, more importantly, to create products that are more compelling and exciting, capable of capturing and retaining users' attention."
