App Annie: Mobile app demand surging, gaming revenue set to surpass $120B

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Research from App Annie reveals the extent of a surge in demand for mobile apps, driven predominately by gaming.

Mobile game revenue is expected to increase 20 percent this year to surpass $120 billion.

A year into a pandemic, it’s of little surprise to hear that consumption of any form of entertainment has increased—but such a year-on-year increase continues to be staggering given the existing size of the industry.

For comparison, global mobile game revenue was approximately $68.5 billion in 2019. At that time, it was estimated that almost one-third of the global population (2.4B) are now mobile gamers.

Theodore Krantz, CEO of App Annie, said:

“The world has forever changed. While people stay at home across the world, we saw mobile habits accelerate by three years.”

Mobile remains the most popular form of gaming, with the sector on track to capture 1.5x the overall market.

Casual games – defined as easy-to-play like Among Us and Roblox – dominate downloads (78%) while ‘Core’ games take second place (20%) and Casino in last (2%).

Despite being significantly behind in downloads, core gamers generate 66 percent of revenue and 55 percent of the time spent on mobile games.

However, the growth in hours spent playing mobile games is being driven predominately by casual gamers:

While games offer the greatest opportunity for revenue generation, people are generally using mobile apps more and increasing their spending on them.

In the US, Gen Z, Millennials and Gen X/ Baby Boomers spent 16 percent, 18 percent, and 30 percent more time year-on-year, respectively, using their favourite apps. Spending reached a new high at $143 billion, representing a 20 percent year-on-year growth.

James Cordery, Head of Performance Marketing Strategy at Deliveroo, commented:

“In 2020, we were able to focus on executing mobile strategies that really delivered incremental growth for Deliveroo. We were able to couple consumer insights with market context from App Annie to make decisions that have had a high impact on our performance.”

Demand for new apps continues to grow, indicating potential to disrupt current incumbents. Downloads increased seven percent year-on-year to hit 218 billion in 2020.

Americans are, on average, spending eight percent more time using their mobiles than watching live TV every day. The weighted average across analysed countries is 4 hours 10 minutes more.

App Annie’s research suggests that 97 percent of iOS developers are eligible for Apple’s new Small Business Program which reduces Cupertino’s cut of App Store fees from 30 percent to 15 percent.

The tl;dr (too long; didn’t read) of all this is now is a rather great time to be building mobile apps… especially games.

You can find a copy of App Annie’s report here (sign up required)

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