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App downloads stagnated in the fourth quarter, according to new analysis • TechCrunch

The global app economy slowed for the first time last year when consumer spending on apps fell 2% to $167 billion, according to a recent annual report from At the same time, downloads were up 11% year over year – a seemingly positive indication that app adoption is still happening, driven particularly by emerging markets. But a deeper one analysis of the fourth quarter points to a more recent slowdown in download growth at a time of year that is typically a boon for the app ecosystem. The holiday season often brings new phones and more free time for consumers to try new apps and games, making these new numbers all the more surprising.

This is reported by the app intelligence agency Sensor toweracceptance of mobile apps in the App Store and Google Play Store leveled off in Q4 2022a slight decline of 0.1% year-over-year to 35.5 billion new installs in the quarter.

Image Credits: Sensor tower

The analysis is per user, which means that additional downloads of an app by the same person on different devices are not counted towards the total. It also doesn’t count app reinstalls to only show new download growth. However, the numbers are only estimates.

While the fourth-quarter trends weren’t enough to bring overall download growth metrics down year-over-year, it seems like it’s another sign of a stagnant app economy — one that’s no doubt still normalizing after exorbitant growth during Covid and one that continues to be impacted by overall macroeconomic forces, which also play a key role in app marketing spending.

But there is another argument to be made here, and that is that the years of expensive commissions on app sales and in-app purchases in the global app stores are finally starting to impact the innovation that is taking place in the wider app ecosystem. If companies have to share up to 30% of their revenue to get their apps and games out to a mobile audience, it’s harder for them to weather a storm like a downturn. And entrepreneurs may be less inclined to build for mobile, especially when other parts of the market are less restrictive. For example, look at developments around crypto and Web3 – they couldn’t fully expand 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 not surprising that downloads and spending are suffering.

This trend is not only visible in the statistics around the stagnant app install rates and declining spending.

Another example of the ecosystem’s floundering can be seen in Apple’s editorially selected top app of 2022. An award intended to reflect the opportunities on offer in building for mobile, the Cupertino-based company highlighted the Gen Z- social networking app BeReal as the “App of the Year”. .” While it’s arguably a breakthrough success with younger people, it’s also an app whose daily active users fell far behind its download numbers and one that currently has no business model – the app is not monetizing yet. Its survival is fueled by VC funding, not the ability of app stores to provide a platform for new ideas to monetize easily. And the developers are struggling to figure out what kind of subscription or in-app purchases they can convince their young users to pay for – the result of an app marketplace that has sold consumers for years on the idea that mobile software should be free. are.

Then there are the apps that topped Sensor Tower’s list of the most downloaded apps in Q4 2022 – it’s the apps from tech giants like Meta and ByteDance, fishing each other for the top spots. For years, it’s been rare to see new entrants make their way onto this list, and it continues to be so in the fourth quarter.

Image Credits: Sensor tower

Globally, Instagram beat TikTok for the No. 1 spot, and Meta’s other apps took a place in the top 10 (Facebook at No. 3, WhatsApp at No. 5, Messenger at No. 8, and WhatsApp Business at No. 9.) ByteDance’s CapCut, an extension of TikTok’s workflow, is No. 4. Other top apps are the usual suspects, such as Snapchat, Telegram, Spotify, Amazon, Flipkart, Twitter, and more big names.

In games, Subway Surfers was number 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 the No. 3 spot with over 184 million downloads, which is remarkable considering it only launched in 2021, while the other top five apps were released in 2017 or earlier — a bright spot in what was otherwise a quarter-over-quarter decline for mobile game installs.

In the App Store, the number of game downloads fell by 6.9%, on Google Play it rose by just under 0.6%.

Image Credits: Sensor tower

Still, the games 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 said. But worryingly, the App Store’s games category dipped below 2 billion for the first time since Q1 2019.

On Google Play, the games category accounted for more installs (11.7 billion) than all App Store categories combined (8.1 billion), but the Play Store’s non-game categories were down 1.5% year over year up to 15.8 billion installs.

It’s too early to say whether or not current trends represent a definitive cooling off of the app store gold rush, given that broader economic forces are clearly at play here in app adoption and spending. In addition, new app markets are coming online, which means more people will download apps for the first time. But for now, the trend is a signal that there is some saturation in the top app markets and suggests that further innovation and growth may need to be kick-started by forcing the app stores to face more competition.

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