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The shift to non-game app spending signals change in the mobile market

July 26, 2022 | By Rande Price, Research VP – DCN @Randeloo

More than half of U.S. app store spending now comes from non-games apps compared to five years ago when games apps accounted for more than two-thirds of total app spending. The shift to non-game apps signals a change in the mobile market from early days, when consumers were less willing to spend on subscriptions or in-app purchases.

According to Sensor Tower’s Q2 2022 Data Digest Report, while spending on mobile games has slowed, the rapid rise of spending on non-games shows a strong potential for growth on mobile. In fact, the report shows that U.S. consumer spending on non-games grew at more than twice the rate of games. Non-games achieved a compound annual growth rate of 40% since June 2014, compared to less than 20% for games.

Spending on non-game apps continues to outpace the spending growth in mobile games. This trend was a reversal from 2019 and 2020, when mobile game spending was consistently higher than non- games apps. While mobile game spending surged at the beginning of the pandemic, by the end of 2020, non-game growth was about equal, then advanced ahead of mobile games by mid-2021.

As the market adjusted itself from the rapid growth registered in the early months of the pandemic, mobile app revenue overall declined year-over-year for the first time in May 2022.

The growing subscription market is helping app growth across a variety of categories. App download activity includes U.S. consumers spending one million dollars across 400 different apps, with a large percentage on subscriptions. Content companies in the U.S. and China controlled the top spots on the App Store, combining for 45% of all installs on the platform in Q2 2022. Top subscription apps include Disney+, HBO Max, and Hulu.

The Sensor Tower methodology includes App Store and Google Play download estimates for April 1, 2022, through June 30, 2022. The estimates use downloads per-user base and only one download per Apple or Google account counts in its total. Downloads of the same app to multiple devices like updates, or re-installs by the same person are not included in the total.

App market overview

Like many entertainment and informational products, U.S. consumer spending on apps soared in April 2020 at the start of the Covid pandemic. Year-over-year growth jumped from around twenty to thirty percent in 2019 to thirty-five to fifty percent in 2020. With app revenue readjusting itself from the rapid growth of Covid’s early days, revenues declined year-over-year for the first time in Q2 2022. It’s important to note, that even with a year-over-year decline, Q2 20222 is up 71% compared to Q2 2019, before the pandemic.

Interestingly, Apple’s App Store generated approximately $43.7 billion from in-app purchases, subscriptions, and premium apps and games in the U.S., up 5.6% year over year. In contrast, Google’s store registered $21.3 billion, down 7.4% year over year. 

TikTok was the number one download app globally and the number one spot in the U.S. With close to 14 million downloads, it was four million downloads ahead of the second-place app, Facebook.  Amazon led as the top shopping app since Q4 2018 in the U.S., however, this ended in Q2 2022. SHEIN, a fast-fashion retail app based in China, ranks as the number one shopping app with the most U.S. downloads.

App downloads signal a return to norms

The Q2 report shows U.S. consumers returning to pre-pandemic activities. Travel apps received record high downloads while airline mobile apps increased more than 30% compared to Q2 2019. Further, consumers want to attend concerts and in-person sporting events, with the top five ticketing apps registering more than 10 million downloads combined, an increase of 70% compared to pre-pandemic Q2 2019.

Tracking mobile downloads, app popularity over time, and spending across app categories offers insight into consumer actions, activities, and shifts in behavior – all drivers of market share. Sensor Tower app download and spend analysis identifies a positive shift in consumers’ willingness to make purchases on their phones. It also shows consumers shifting app categories from mobile games to non-game apps, namely subscriptions, and a return to some pre-Covid activities.

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