(Newswire.net — July 13, 2017) — There’s money in apps, more money than ever apparently. Our spending habits are changing, adapting to the digital age by moving online. Increasingly, this means paying for things using an app on a smartphone, so it should come as no surprise that the app market is booming as it flexes its muscles to match this demand, which is expected to continue for at least the next five years.
App Annie is an analytics company that specializes in forecasting market trends in the mobile commerce world, and according to their latest report, by 2021 the global app economy will be worth around $6.3 trillion – quite a jump from the $1.3 trillion it was valued at only last year. So where’s the money likely to be spent, and how?
Mobile Gaming
The widespread popularity and proliferation of mobile gaming apps has certainly helped things along, and this is in itself an expanding marketplace. As smartphones grow iteratively smarter, games designed for them become increasingly sophisticated as developers seek fresh ways of tapping into the lucrative casual gaming paystream. Mobile games lean toward the “pick up and play” variety; easy to grasp, hard to put down and paced to fill a spare half hour. They often come with the option to make in-game purchases, such as boosts and power-ups.
Colorful puzzlers à la Candy Crush and cheerful cartoon oddities such as Angry Birds elbow up to casino games, online slots and roulette sims in a roisterous, bustling game space dominated by the App Store, Google Play, and the large iGaming hubs: these are vast online shops that are always open, and always offering new content, inviting the player to come in and try it out for size. Whatever the merits of freemium models versus pay-to-play, they appear to work well enough. Indeed, Newzoo’s 2017 Global Games Market Report estimates that the mobile gaming sector is the fastest growing segment of video gaming as a whole, reporting 19% growth, year on year. Games played on phones and tablets represent over 42% of the video game market, and will be worth some $46.1 billion by the close of this year. Mobile gaming by 2020 will make up half the total gaming market, but $46.1 billion is a long way shy of $6.3 trillion, so where’s the bulk of the app economy?
Mobile Commerce and the In-app Purchase
“iPhone” (CC BY-SA 2.0) by clasesdeperiodismo
The sum total of in-app purchases make up the app economy, and this segment boils down to basically any online transaction that takes place through a smartphone app that holds your credit information. People purchasing goods and services through mobile apps made up for 90% of the total app economy last year, and this is expected to rise to 95% by 2021. Booking an Uber ride, ordering from Amazon or Alibaba, securing cheap flights and a holiday destination through to waving your phone at a barista for your morning coffee – all these activities and more count toward that projected $6.3 trillion total.
The actual number of apps being downloaded seems to have levelled out somewhat, but people are spending more time with the apps they have, and are spending more money through them too. App Annie anticipates that by 2021 the average annual app-spend per person will rise from $379 to $1,008. Mobile commerce amounts to by far the largest slice of the app economy pie, and is expected to yield the highest average yearly growth rate at 39%, compared to app store spending and advertising revenues along the lines of 18 and 23%.
Summing up
These are projected figures of course, but impressive ones. Should the trend of people preferring in-app purchases over in-person transactions continue, then the app market looks set to be in a strong position going forward.