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App downloads stagnated in Q4, new analysis shows – TechCrunch

The global app economy slowed for the first time last year, as consumer spending on apps fell 2% to $167 billion, according to a recent annual report published by data.ai. At the same time, downloads were up 11% year-over-year — a seemingly positive indication that app adoption was still happening, driven particularly by emerging markets. But closer analysis of the fourth quarter points to a more recent slowdown in download growth at a time of year that’s typically a boon to the app ecosystem. The holiday season tends to bring new phones and more free time for consumers to try out new apps and games, which makes these new numbers all the more surprising.

According to app intelligence firm Sensor Tower, adoption of mobile apps on the App Store and Google Play Store stabilized in the fourth quarter of 2022, declining slightly by 0.1% year-on-year. another to reach 35.5 billion new installs in the quarter.

Picture credits: sensor tower

Its analysis is done per user, which means that additional downloads of an app by the same person on different devices are not counted in the total. It also doesn’t count app reinstalls so it only shows the growth of new downloads. However, his figures are only estimates.

While the fourth quarter trends weren’t enough to drag down overall year-over-year download growth metrics, it appears to be another signal of a stagnant app economy — a , no doubt, still normalizing after outsized growth during Covid and that remains influenced by global macroeconomic forces, which also play a key role in app marketing spending.

But there’s also another argument to be made here, and that’s that the years of high commissions on app sales and in-app purchases in global app stores have finally started to impact the innovation that takes place in the wider app ecosystem. If companies have to share up to 30% of their revenue just to distribute their apps and games to mobile audiences, it’s harder for them to weather a storm like a down economy. And entrepreneurs may be less inclined to build for mobile, especially when other market sectors are less restrictive. Look at the developments around crypto and Web3, for example – they couldn’t fully extend to mobile due to App Store guidelines and the platforms’ need to take advantage of in-app purchases. With so much pressure on app innovation, it’s no surprise to see downloads and spending suffer.

This trend isn’t just apparent in the metrics surrounding stagnant app install rates and falling spending.

Another example of ecosystem failure can be seen in Apple’s 2022 best-selected app. Gen Z BeReal as its “App of the Year”. .” While arguably a smash hit with young people, it’s also an app whose daily active users are far behind its download numbers and has no business model at present – the app doesn’t generate more income. Its continued existence is fueled by venture capital funding, not the ability of app stores to provide a platform where new ideas can easily be monetized. And its developers are struggling to find the kind of subscription or in-app purchases they could convince their young users to pay for – the result of an app market that for years sold consumers on the idea that mobile software should be free.

Then there are the apps that topped Sensor Tower’s list of most downloaded apps in Q4 2022 – those are apps from tech giants like Meta and ByteDance, which fish for each other for better seats. For years, it’s been rare to see newcomers making their way onto this list, and that remains true in Q4.

App downloads stagnated in Q4, new analysis shows – TechCrunch

Picture credits: sensor tower

Worldwide, Instagram edged out TikTok for the top spot, and Meta’s other apps found a spot in the top 10 (Facebook at #3, WhatsApp at #5, Messenger at #8, and WhatsApp Business at #8). #9.) ByteDance’s CapCut, a workflow extension of TikTok, is #4. Other top apps include the usual suspects, like Snapchat, Telegram, Spotify, Amazon, Flipkart, Twitter and other big names .

In games, Subway Surfers was #1, followed by Garena Free Fire, Stumble Guys, Roblox, FIFA Mobile, Ludo King, and Candy Crush Saga. Subway Surfers had ended the year with nearly 292 million installs, up 48% from 2021. Newcomer Stumble Guys took third place with over 184 million downloads, which is remarkable given that it only launched in 2021 while the other five most popular apps were released in 2017 or earlier – a bright spot in what was otherwise a quarter-over-quarter decline for app installs mobile games.

On the App Store, game downloads fell by 6.9%, on Google Play they gained a small 0.6%.

App downloads stagnated in Q4, new analysis shows – TechCrunch

Picture credits: sensor tower

Still, the gaming category continues to drive app installs. On the App Store, it’s responsible for nearly three times as many installs as the No. 2 category, utilities, the report notes. But worryingly, the App Store games category fell below the 2 billion mark for the first time since the first quarter of 2019.

On Google Play, the games category was responsible for more installs (11.7 billion) than all App Store categories combined (8.1 billion), but non-Games Play Store categories declined 1.5% year-on-year to 15.8 billion. installed.

It’s too early to tell whether or not current trends represent a final cooling of the App Store gold rush, given that broader economic forces are clearly playing a role here in driving adoption and spending. apps. Also, new app marketplaces are coming online, which means there will be more people downloading apps for the first time. But for now, the trend is a signal that there is some saturation in major app markets and suggests that innovation and growth may need to be kick-started by forcing app stores to s engage in increased competition.

techcrunch Gt

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