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Consumer app economy is about OTT and Gaming

April 28, 2022

group of young asian people playing with their phones

Jonathan Kriegel

CEO

The latest Sensor Tower “Q1 2022: Store Intelligence Data Digest”[i] indicates almost 37 app billion downloads in the first quarter of this year. While the latest financial results from OTT players and tech platforms indicate a drop in consumer appetite for mobile content consumption compared to the highs during pandemic-induced lockdowns, there is no sign of a slowdown in the app economy. Global app adoption and consumer spending have remained flat compared with last year. App downloads grew 2.4% compared with Q1’21 to 8.6 billion in the App Store and 1.3% to 28.3 billion in Google Play. It is essential to view this trend in the context of the reality of the pandemic. The shelter-in-place restrictions were still in place in most markets in Q1 2021, which led to an unprecedented spike in app downloads as people spent more time on their mobile devices.

Graph

The order of the top five apps has remained unchanged over the past three quarters. TikTok surpassed 70 million App Store downloads for only the third time in Q1 2022, driven by 11 percent quarter-over-quarter growth in Asia. CapCut, a video editing app from TikTok’s publisher ByteDance, had its best quarter with more than 30 million downloads. It has ranked among the top 10 App Store apps in the past five quarters. While WhatsApp has been the top App Store app in Europe for the past seven quarters, TikTok has held the top spot on Google Play over the same period. However, Telegram was not far behind last quarter, with more than 14 million downloads.

US SVOD market matures

HBO Max had the best quarter on the U.S. App Store for any SVOD (subscription video on demand) app since Disney+ launched in late 2019, passing Netflix for only the second time. There has been a continuous rise in video streaming downloads as more consumers value watching content on the go in recent years. The top six apps had more than 10% U.S. download market share in Q1 2022, with HBO Max in the lead (21%), Disney+ (17%), and Netflix (15%). Meanwhile, Peacock, Hulu, and Amazon Prime Video had at least 10%. Earlier this month, Warner Bros.Discovery addressed some technical glitches with the Apple TV app of HBO Max and promised it would be rolling out upgrades such as enhanced stability, a more simplified sign-in process, and other new features. It previously improved the app experience for Roku, PlayStation, Android TV, LG, and Vizio. Netflix’s recent results and the shutting down of CNN+ reflect the maturing market and consumer fatigue around the plethora of SVOD services to choose from. Read more in Jonathan Bennett’s recent blog here.

Productivity apps are here to stay

In the US, Zoom had positive quarter-over-quarter growth for the first time in a year, reaching the sixth position on Google Play with more than 3 million downloads. Zoom was the top app on Google Play as recently as Q1 2021. One would have expected Zoom to have had a slower growth as offices open and workers return to in-person meetings. The market for remote meeting technologies spiked in China with the recent lockdowns. VooV Meeting’s downloads climbed 126 percent quarter-over-quarter to more than 14.6 million. It had more than 10 million installs in March 2022 alone, even higher than the 9.8 million it saw in March 2020 during the COVID-19 pandemic.

Mobile gaming is more ubiquitous than ever

Mobile gaming apps have consistently been the most popular category of apps. Garena Free Fire was the top game in the last quarter, continuing a run of top Battle Royale games. PUBG Mobile was sixth during that period, while it was the top game by worldwide downloads in Q3 2021. Subway Surfers was the top mobile game on the App Store in Q2 2022. Wordle, a word game acquired by Lion Studios, has become a surprise hit. It had nearly 13.5 million App Store installs last quarter (compared to only 32 thousand downloads thus far). Consumer spending in mobile games declined 7.1 percent year on year to $21 billion in Q1’22. Mobile games on Apple’s platform saw about $12.9 billion, while Google Play saw its mobile game revenue decline 13.8% to $8.1 billion.

Meta was the top publisher for the first time since Q1 2020. The battle for the top spot in Q1 2022 was very tight, with Meta and Google separated by just four million downloads. Hypercasual games developer Voodoo was the leading publisher not based in the U.S. or China, reflecting the challenge for publishers outside the App Store’s two largest markets to breakthrough, especially for non-gamers.

Conclusion

While we may not see the unprecedented highs in consumer adoption of apps in the last two years as the world returns to a semblance of normality and people begin to travel and spend more time outdoors, the app economy and consumer appetite for content will continue to grow unabated. And more affordable smartphones coupled with faster 5G-enabled mobile networks will only exacerbate the growth.

 


[i] https://sensortower.com/blog/app-revenue-and-downloads-q1-2022

 

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