A big change has just taken place in the US app economy. In the second quarter of this year, US consumer spending on non-gaming mobile apps exceeded mobile gaming spending for the first time in May 2022, and the trend continued in June. This boosted total non-game app revenue for the quarter, reaching approximately $3.4 billion on the US App Store, compared to $3.3 billion spent on mobile games.
After May’s shift, 50.3% of spend came from non-game apps through June 2022, new findings in a report from app intelligence firm Sensor Tower show. For comparison, just five years ago, games accounted for more than two-thirds of total spend on the US app store.
However, the trend was limited to the US app store and was not seen on Google Play. In the second quarter, games represented $2.3 billion of consumer spending on Google Play in the US, while non-game apps represented approximately $1 billion.
This shift in the US app market is the new report’s most significant finding, showing how successful Apple has been in creating a subscription economy that allows a wider range of apps to generate significant revenue.
The new data supports this as well, showing that it’s not just the biggest players that are benefiting from subscription revenue growth. In the second quarter of 2022, 400 apps generated more than $1 million in consumer spend on the US App Store, which is eight times the same quarter of 2016. In addition, 61 non-game apps generated at least one in the US App Store $10 million in US consumer spending in Q2 2022 – that’s more than the number of non-game apps that generated over $1 million in revenue in Q2 2016.
A handful of non-gaming apps surpassed US consumer spending of over $50 million in the quarter, including YouTube, HBO Max, TikTok, Tinder, Disney+, Hulu, and Bumble.
Subscriptions are the key revenue growth driver here, as non-gaming apps have grown nearly twice as fast since June 2014 — at a compound annual growth rate of 40% — compared to less than 20% for gaming, according to the report.
The trend is a stark reversal of how mobile app spend was just a few years ago.
For example, in 2019 and early 2020, mobile gaming spend growth was consistently faster than non-gaming spend. Gaming spending then picked up again at the onset of the COVID-19 pandemic. But by the end of 2020, non-game growth had caught up and the gap widened in 2021.
While non-gaming is enjoying its newfound dominance, it’s not all good news for the app economy in this latest quarter. The report also noted that U.S. app spending overall fell in the second quarter for the first time after the pandemic-driven surge eased.
At the start of the pandemic (around April 2020), annual growth in consumer spending had skyrocketed from around 20% to 30% in 2019 to 35% to 55% over the next 12 months. But in May 2022, spending in the US fell for the first time as consumers began reallocating their dollars back to other non-mobile activities like dining out and travel.
Despite this decline from pandemic highs, consumer spending was still 71% higher in Q2 2022 than in Q2 2019.
In other key insights from the quarter, summer travel drove travel apps to record downloads in the US and UK, and airline app downloads in those markets increased more than 30% compared to the pre-pandemic second quarter of 2019.
Meanwhile, the top five ticketing apps saw 10 million downloads, an increase of over 70% from Q2 2019 as consumers returned to concerts, sports games and other events.
Global app downloads also slowed in the quarter, as installs totaled 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 non-gaming app globally was TikTok, which topped the list eight times over the last 10 quarters. Instagram, Facebook, WhatsApp and Snapchat followed. TikTok (including Douyin in China on iOS) had 187 million downloads in the quarter.
The top mobile game globally was Subway Surfers with over 80 million downloads – the highest total since 2014 and after gaming giant Miniclip acquired games maker Sybo in June 2022. The number two title was Garena Free Fire with 70 million installs for the third quarter in a row.