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US App Store revenue from non-gaming apps just overtook games for the first time – TechCrunch

A major shift in the US app economy has just taken place. In the second quarter of this year, US consumer spending on non-gaming mobile applications exceeded spending on mobile games for the first time in May 2022 and the trend continued in June. This led to an increase in total revenue generated by non-gaming applications for the quarter, reaching approximately $3.4 billion on the US App Store, compared to $3.3 billion spent on mobile games.

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

The trend was limited to the US App Store and however was not seen on Google Play. In the second quarter, games accounted for $2.3 billion of consumer spending on Google Play in the United States, while non-gaming apps accounted for about $1 billion.

Picture credits: sensor tower

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

The new data also confirms this, as it shows that it’s not just the biggest players who are benefiting from the growth in subscription revenue. In the second quarter of 2022, 400 apps generated more than $1 million in consumer spending on the US App Store, eight times the total for the same quarter in 2016. Additionally, 61 non-gaming apps from the US App Store generated at least $10 million in US consumer spending in Q2 2022 – that’s more than the number of non-gaming apps that had generated over $1 million in revenue in the second quarter of 2016.

A handful of non-gaming apps also topped $50 million in US consumer spending during the quarter, including YouTube, HBO Max, TikTok, Tinder, Disney+, Hulu and Bumble.

Picture credits: sensor tower

Subscriptions are the main driver of revenue growth here, as non-gaming apps have grown nearly double – at a compound annual growth rate of 40% – since June 2014, compared to less than 20% for games, according to the report.

The trend is a significant reversal of what mobile app spending looked like just a few years ago.

In 2019 and early 2020, for example, mobile gaming spending growth was consistently higher than non-gaming spending. Spending on games then jumped again at the onset of the COVID-19 pandemic. But by the end of 2020, offside growth had caught up and the gap widened in 2021.

Picture credits: sensor tower

While non-gaming is enjoying its newfound dominance, it’s not all good news for the app economy this past quarter. The report also revealed that overall app spending in the United States fell for the first time in the second quarter, following the end of the peak generated by the pandemic.

At the start of the pandemic (circa April 2020), year-over-year growth in consumer spending had increased from around 20% to 30% in 2019 to 35% to 55% in the following 12 months. But in May 2022, US spending fell for the first time as consumers began to redirect their dollars to other non-mobile activities like restaurants 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.

In other key findings in the quarter, summer travel drove travel apps to high downloads in the US and UK, and airline app downloads in these markets increased by more than 30% compared to the second quarter of 2019, before the pandemic.

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

Picture credits: sensor tower

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

The most downloaded offline app in the world was TikTok, which held the top spot eight times in the past 10 quarters. He was followed by Instagram, Facebook, WhatsApp and Snapchat. TikTok (including Douyin in China on iOS) saw 187 million downloads in the quarter.

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

China was still the top contributor to iOS games revenue, despite a pause in game approvals in May 2022. In the second quarter, 65% of consumer spending on the Chinese App Store was on mobile games, while 35% were for apps other than games in the second quarter of 2022. – percentages that remained unchanged from a year ago in June 2021. The Japanese App Store still generates the third largest gaming revenue on iOS and it maintained this position, although the share of games fell a little to 68% of total spending, compared to 70% in June 2021.