Non-game app revenue in US App Store surpasses games for the first time – TechCrunch

The US app economy has just undergone a major shift. In the second quarter of this year, US consumer spending on non-gaming mobile apps surpassed spending on mobile games for the first time in May 2022, a trend that continued in June. This boosted total revenue from non-game apps for the quarter to roughly $3.4 billion in the App Store, compared to $3.3 billion spent on mobile games.

After the shift in May, by June 2022, non-gaming apps accounted for 50.3% of spending, according to new findings in a report from app analytics company Sensor Tower. By comparison, just five years ago, games accounted for more than two-thirds of total spending in the US App Store.

However, this trend was limited to the US App Store and was not seen on Google Play. In the second quarter, consumer spending on games on Google Play was $2.3 billion in the US, and about $1 billion on non-game apps.

Image Credits: Touch tower

This shift in the U.S. app market is the most important finding in the new report and demonstrates how successful Apple has been in creating a subscription economy that allows a wider range of apps to generate significant revenue.

New data also supports this, as it shows that it’s not just the biggest players who are benefiting from the growth in subscription revenues. In the second quarter of 2022, 400 apps generated more than $1 million in consumer spending on the App Store, an eight-fold increase over the same quarter in 2016. In addition, 61 non-game App Store apps in the US have grossed at least US$10 million. US consumer spending in the second quarter of 2022 is more than the number of non-gaming apps that generated more than $1 million in revenue in the second quarter of 2016.

Several non-gaming apps also surpassed $50 million in US consumer spending in the quarter, including YouTube, HBO Max, TikTok, Tinder, Disney+, Hulu and Bumble.

Image Credits: Touch tower

Subscriptions are the main driver of revenue growth, with non-game apps growing nearly twice as fast since June 2014 — at a 40 percent annual growth rate — compared to less than 20 percent for games, the report said.

This trend has dramatically changed the way mobile app spending looked just a few years ago.

For example, in 2019 and early 2020, growth in mobile gaming spending was consistently higher than non-gaming spending. Gaming spending rose again at the start of the COVID-19 pandemic. But in late 2020, non-gaming growth caught up and the gap widened in 2021.

Image Credits: Touch tower

While non-gamers are enjoying their newfound dominance, it’s not all great news for the app economy this past quarter. The report also found that overall U.S. program spending fell for the first time in the second quarter since the outbreak caused by the pandemic.

At the start of the pandemic (around April 2020), annual growth in consumer spending jumped from around 20%-30% in 2019 to 35%-55% over the next 12 months. But in May 2022, spending in the US fell for the first time as consumers began to shift their dollars back to other non-mobile activities, such as dining out and travel.

Despite this decline from pandemic highs, consumer spending in the second quarter of 2022 was still up 71% from the second quarter of 2019.

Other key takeaways from the quarter include summer travel driving record travel app downloads in the US and UK, with airline app downloads in these markets up 30%+ compared to Q2 2019 before the pandemic.

Meanwhile, the top five ticketing apps posted 10 million downloads, a 70% increase from the second quarter of 2019, as consumers returned to concerts, sports games and other events.

Image Credits: Touch tower

Global app downloads also slowed in the quarter, with 35 billion installs in the second quarter, down 2.5% from last year. App Store downloads fell 1.3% to 7.8 billion, while Google Play installs fell 3% to 27.2 billion.

The most downloaded non-gaming app in the world was TikTok, which held the top position eight times in the last 10 quarters. It was followed by Instagram, Facebook, WhatsApp and Snapchat. TikTok (including Douyin in China on iOS) had 187 million downloads in the quarter.

Subway Surfers became the top mobile game in the world with over 80 million downloads, the highest number since 2014, after game maker Sybo was acquired by gaming giant Miniclip in June 2022. The second title was Garena Free Fire with 70 million installs for the game. third quarter in a row.

Despite the suspension of game approvals in May 2022, China is still the largest source of revenue for iOS games. In the second quarter, 65% of consumer spending in the Chinese App Store was for mobile games, and 35% for non-game applications in the second quarter of 2022. — percentages that remained unchanged compared to last year in June 2021. The Japanese App Store still generates the third-largest revenue from games on iOS, and it has maintained that position, although the share of games has decreased slightly to 68% of total spending compared to 70% in June 2021.

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