According to a new market forecast, app spending will reach $ 270 billion by 2025, including paid downloads, in-app purchases, and subscriptions. According to Sensor Tower data, in-game spending will return to pre-pandemic steady growth levels over the next few years; downloads will continue to rise. Perhaps most importantly, it predicts that app store spending on non-game apps will surpass mobile game spending by 2024.
This is a big bet considering that consumers today are spending twice as much on mobile games as on non-gaming. The firm, however, believes that the subscription model it is currently rolling out in several mobile applications will cause a shift in the market. Non-gaming spending is expected to reach $ 86 billion by 2024, compared to $ 73 billion in gaming. And by 2025, that gap will widen, with non-gaming games reaching $ 107 billion and mobile games $ 78 billion.
Last year, global consumer spending on the Top 100 subscription apps grew 34% over last year, giving you an idea of the market’s current state. But there were already some signs that subscription growth was being influenced by larger apps like Netflix and Tinder, which have found workarounds for in-app purchases.
Sensor Tower also fails to predict how the regulatory environment will affect app stores over the next few years. Today, companies like Apple and Google require apps to charge customers for subscriptions through Google and Apple’s payment mechanisms. But new anti-competition laws could be enacted to allow publishers to sell their subscriptions within their apps, which then redirect users to their channels to make those purchases. This change will significantly impact the subscription growth trend in app stores and, therefore, on this forecast.
While the pandemic pushed domestic app spending by 30% year on year to a record $ 111 billion in 2020, the latest forecast predicts that total app spending will return to pre-COVID levels over the next five years. It states that both app stores’ gross revenue will grow each year at a CAGR of 19.5% to reach $ 270 billion by 2025. Of that amount, $ 185 billion will be spent on the App Store, compared to $ 85 billion on Google Play.
The United States will grow slightly more slowly than the rest of the global market, with a CAGR of 17.7%, and reach $ 74 billion by 2025.
European markets will drive app store spending growth from 2020 to 2025, led by the UK. This is not equivalent to which markets as a whole are spending the most, but rather where growth is happening – in other words, opportunities for application developers. … By 2025, 11 European countries will surpass the $ 1 billion milestones in consumer spending for a combined $ 42 billion in consumer spending.
Meanwhile, downloads are projected to continue to grow over the next few years, reaching 230 billion by 2025, with most of that figure coming from Google Play with 187 billion downloads worldwide. However, in the US, App Store downloads in 2025 (10.6 billion) will exceed Google Play downloads (6.3 billion), the report said.