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HomeBusinessApp downloads were flat in 2023, but spending still climbs past $171...

App downloads were flat in 2023, but spending still climbs past $171 billion.

The app economy began to accelerate again throughout the last year, following its first-ever slowdown in 2022. In 2023, consumer spending on apps witnessed a slight 3% growth year over year to reach $171 billion across the App Store, Google Play, and third-party Android app stores in China, according to app intelligence firm data.ai’s annual “State of Mobile” report, released today. Thanks in part to TikTok’s success, an increasing portion of that total consumer spending comes from apps rather than mobile games. Nevertheless, with 257 billion downloads last year, app downloads increased by just around 1% from the previous year.

With consumer spending returning to normal and the economy contracting, more people were pulling back on their spending in 2022, which marked the end of the app economy’s unstoppable rise. Simple math on the back of a napkin even hinted that consumer spending might have decreased on Apple’s App Store as well, but precise numbers were impossible to calculate because Apple no longer takes a flat 30% share of all purchases.

According to data.ai, things were once again going well last year.

In 2023, consumer spending on apps other than games increased by 11% year over year to reach $64 billion. TikTok played a leading role in the creator economy and social apps drove this expansion. For example, the short-form video app became the first non-gaming app to reach the milestone of over $10 billion in lifetime expenditure last year. According to data.ai, user-generated revenue from social apps will reach $1.3 billion this year, a 150% increase.

In 2023, over 1,500 games and apps made over $10 million a year; 219 of them made over $100 million, and 13 made over $1 billion. The year saw the $1 billion milestones surpassed by four new apps: Gardenscapes, Max, Royal Match, and Google One.

The company also mentioned how improvements in generative AI boosted consumer spending in the previous year. The market for GenAI apps grew seven times over, giving rise to novel consumer experiences such as AI art generators and chatbots. Regarding user spending, the top apps were Open Chat, Ask AI, and ChatGPT. Although the popularity of AI apps was “fairly global,” according to Data.ai, the genre wasn’t one of the biggest hits in Saudi Arabia, China, Japan, or Turkey.

According to data.ai, more than 4,000 apps added the term “chatbot” and more than 3,500 added “gpt” to their app descriptions in an attempt to meet user demand. Furthermore, the company claims that 2,500 apps with the term “chatbot” in their description were released in 2023—nearly twice as many as were released in the four years prior combined.

In addition to AI apps, additional apps that incorporated AI characteristics performed well in 2023.

According to data.ai, the 20 apps that included these features saw an 11% increase in downloads year over year; 13 of the 20 apps (65%) also had positive growth.

Other parameters of the health of the app ecosystem, including installs, time spent, ad spend, details unique to games, and more, were also covered in the full study.

In terms of app installs last year, Bangladesh proved to be the fastest-growing market, with China trailing India (No. 2) and the United States (No. 3). Applications came in a variety of subgenres, including retail, entertainment, productivity, utility, and photo and video.

Furthermore, according to Data.ai, hours spent reached a milestone of 5.1 trillion, increasing 6% year over year. This year, mobile ad expenditure is expected to exceed $362 billion, an 8% increase. According to data.ai, the forecast for 2024 shows a bigger increase of 16.2% to reach $402 billion as ad expenditure picks up steam after growing more slowly in 2023.

In the meantime, the average number of hours a person spends on their phone each day increased by 6% from 2022 to over five hours in the top ten markets. The use of apps like Netflix, YouTube, Instagram, WhatsApp, Facebook, TikTok, Chrome, and others here increased time.

However, mobile gaming did not do as well in 2023, with $107 billion in spending, a 2% decrease from the previous year. 257 billion downloads altogether, of which 88 billion were for games, was about average compared to previous years. The most popular genres were action, simulation, and hypercasual. Monopoly GO and EA Sports FC Mobile Soccer were two of the year’s biggest hits. Genshin Impact achieved a significant milestone when its lifetime spending surpassed $4 billion. Along with unexpected hits like Avatar Life, games like Block Blast Adventure Master and Attack Hole fueled downloads. Both Gacha Life 2 and Eggy Party saw significant increases in usage and downloads.

Other 2023 trends included a 140% increase in Chinese commerce apps like Temu and Shein as they entered Western markets and a 12% increase in the amount of time spent on social and entertainment apps, reaching 3 trillion hours. Spending increased by 10% to $29 billion in the latter.

Travel app downloads increased 13% following the pandemic, with the largest growth coming from travel services (26%), tour booking (80%), and airplane booking (43%). In a similar vein, ticketing applications saw a 31% spike due to major performances by Beyoncé and Taylor Swift, up 66% from pre-pandemic levels.

The complete research dives deeper into specific areas, including banking, retail, video streaming, social, food & drink, travel, health & fitness, sports, and more. It also breaks down the top apps and games by country across metrics like installs, spending, and time.

TikTok was the most downloaded and spent app globally, while Facebook was still the most popular app in terms of time spent. The most played games were Roblox (monthly active users), Candy Crush Saga (spending), and Subway Surfers (downloads).

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