Lexi Sydow, Head of Insights at data.ai, looks at the key findings of the company’s State of Mobile 2023 report.
Our State of Mobile 2023 report, published recently, draws heavily on our App IQ and Game IQ taxonomies, which classify 250,000 apps, breaking them down into genres and subgenres. It paints a detailed picture of the state of the app market as we enter 2023, going far beyond the generic categorisations offered by the app stores. To take just a couple of examples, within App IQ, the Entertainment genre breaks down into 12 subgenres, including Karaoke, Live Streaming and Short Videos. And within Game IQ, the RPG genre breaks down into 13 subgenres, including Action RPG, Puzzle RPOG and Survival. The granularity delivered by the subgenres means that for any sector, you can analyse which types of app are driving growth, to see where opportunity lies. Here’s what this year’s report reveals.
While new app downloads were up 11 per cent year-on-year, at 255bn, for the first time in many years, spending in the app stores was down year-on-year, by 2 per cent, due the combined pressures of inflation and the overall rising cost of living. Gaming was hit by the decline in spending – down 5 per cent year-on-year, while apps outside of games saw a 6 per cent growth in consumer spend. However, the effects were also felt in most other sectors through dampened growth rates.
In 2022, 1,419 apps (including games) surpassed $10m (£8.1m) in global consumer spend, compared to 1,428 in 2021. 224 apps surpassed $100m, compared to 233 in 2021. And 10 apps surpassed $1bn in consumer spend, compared to 13 in 2021.
Time spent on mobile rises
Despite reduced consumer spend, however, the rise in the number of app downloads is encouraging, showing that, while life has pretty much returned to normal for most people, habits and behaviours developed during the pandemic have not been forgotten. Indeed, the total time spent on mobile during 2022 came in at 4.1 trillion hours – that’s 11.2bn hours per day collectively – 9 per cent up on 2021. The daily time spent per user was also up by 3 per cent at five hours. Mobile ad spend in-app also rose by 14 per cent year-on-year to $336bn, and we expect this to rise again in 2023, to $362bn. This is being driven largely by mobile-first video content, and by search. While the majority of time spent on mobile is spent in-app, 8 per cent is spent on the web browser, and a lot of this time is spent on search activity, with paid search a big part of this.
The top five global app subgenres by downloads in 2022 were Entertainment > OTT; Utility & Productivity > Personalisation; Utility & Productivity >Tool; Photo & Video > Photo Editing; and Social Media > Communication. Three categories – Social Media > Communication; Entertainment > Short Videos; and Entertainment > Video Sharing – accounted for 50 per cent of the time spent in apps, while 20 categories, out of the 34 we cover, accounted for 50 per cent of downloads.
Now let’s look at the trends in three of the most dynamic app sectors: Gaming; Retail; and Media and Entertainment, including Social.
The Gaming sector reflects the overall trend for 2023, with downloads up 8 per cent to 90bn, but consumer spending down by 5 per cent to $110bn. Once again, inflationary and cost of living pressures are evident. Creative Sandbox games, such as ‘Roblox’ and ‘Minecraft’, for example, saw a big year-on-year increase – 25 per cent – in time spent in-app, but also, a decline in spend, as players questioned the need to invest real money in outfitting their avatars in their digital world.
Some games did defy the downward trend in consumer spending, however, with ‘Honor of Kings’, ‘Survivor!.io’ and ‘YiNianXiaoYao’, all posting healthy increases in consumer spend.
In terms of demographics, the report reveals that younger gamers in the US and the UK gravitate towards Party, Simulation and Shooter games, while older players prefer Match 3, Slots and Puzzle games. From a gender perspective in the US and the UK (limited to only males and females and is not representative of all gender identities), females tend to prefer Match 3, Puzzle and Party games, with males tending towards Sports, Strategy and Shooting games. Slots games tend to skew more male across many markets (UK, South Korea and Germany), with a notable exception of the US audience, where Slots games are 14 per cent more likely to be played by females.
Once again, China’s importance to the global gaming business is evident, with publishers headquartered in China driving one third of consumer spend. The top five games globally in 2022, based on downloads, were ‘Subway Surfers’; ‘Free Fire’; ‘Ludo King’; ‘Stumble Guys’; and ‘Candy Crush Saga’.
The Retail sector saw a 9 per cent year-on-year growth in time spent in shopping apps. Once again, the granularity of the App IQ taxonomy helps to explain what drove this growth, and reveals that most of it came from increased downloads and use of Coupons & Rewards apps. These saw a 27 per cent year-on-year increase in downloads, as consumers looked to save money in an increasingly price-sensitive world. In the same vein, downloads of personal loan apps also increased by 81 per cent in 2022.
In the US, during the holiday season, eCommerce apps performed strongly, with Amazon seeing a 4.7m increase in the number of weekly average users of its app, compared to the two weeks prior. Other strong performers included Walmart, Temu and Target.
Fashion apps performed strongly, as people looked forward to socialising over the holiday period, with StockX, Sephora and JCPenney topping the charts in terms of the growth in average minutes spent in app per user. Time spent tends to be a good proxy for spend.
Media and Entertainment
OTT apps were the number one category for consumer spend in 2022, up 12 per cent year-on-year, as people subscribed to streaming services. These subscriptions were driven primarily by the ability to access exclusive content, often, but not always, sports. It was a good year for Disney Plus, which passed $3bn in lifetime consumer spend, and for HBO Max, which will hit that landmark during 2023.
Globally, time spent in social apps on Android phones passed 2 trillion hours in 2022, a 17 per cent year-on-year increase. Apps such as BeReal and Locket Widget benefitted from users’ desire for authenticity, while short-form video apps like TikTok also saw strong growth in the time spent in app. TikTok also became only the second non-gaming app (after Tinder) to pass $6bn in lifetime consumer spend, and is on course to surpass Tinder by the end of January. While it may be first and foremost a social app, TikTok is clearly cutting into the OTT and Streaming market.
TikTok is notable in other respects too. Globally, its users spend 23 hours and 30 minutes each month in the app, compared to 19 hours, 45 minutes for Facebook, helping it to drive higher ad revenues. In-app purchases are another important revenue stream for TikTok. Its highest-ticket item is a package of 16,500 coins that its users can buy to reward content creators for the entertainment and value they deliver. It sells for $249.99, far more than anything offered by any of the other big social platforms. Facebook’s package of 3,000 stars, which sells for $49.99 is as close as anyone else gets.
You can access the full report here.