App Annie: Five major trends in mobile apps for 2020

Recently, App Annie and BusinessofApps.com jointly released a forecast analysis of the mobile market in 2020. The analysis report stated that 2019 was a milestone year, with consumer spending increasing by 20% year-on-year and total spending expected to be US$90 billion for the whole year.

The 2020 figures will be even higher, with global consumer spending on the iOS App Store and Google Play reaching $105 billion (excluding third-party Android stores). Apple subscription services will drive much of this growth, and gaming will be the vertical best positioned to capitalize on this monetization trend.

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Outside of app stores, mobile ad spending will take up a larger share of the market, growing to $240 billion worldwide by 2020 from $190 billion in 2019.

Here are App Annie’s top five predictions for the mobile market in 2020, which they believe will have a positive impact on mobile app, game publishers, and developers.

1. Global consumers will spend 674 billion hours on mobile devices in 2020, and the streaming war heats up

App Annie predicts that consumers worldwide will spend 674 billion hours in the mobile entertainment, video player, and editing categories in 2020, up from the 558 billion hours expected in 2019. Established companies such as YouTube and Netflix dominate the majority of time spent on mobile, but there is a steady stream of new entrants eager to get a piece of this growing pie.

Well-funded companies including Disney+, Apple TV+, and HBO Max are bundling services through original TV series or innovative content formats to cultivate consumer subscription habits.

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Competition also comes from social media, where the younger generation likes to use their spare time to find entertainment content. Social apps such as TikTok, Snapchat and Instagram are blurring the line between social media and entertainment, leading to more intense competition for consumers’ time. It is understood that since 2018, TikTok users in the United States have spent $23.1 million (about RMB 162 million) on the app.

2. Apple Arcade and Google Play Pass subscription models bring new revenue sources to publishers

With mobile spending now accounting for more than 50% of all game revenue in the global games market, game subscription services will drive deeper engagement and greater customer lifetime value (LTV).

Overall, this trend is heating up in the mobile space. As of September 2019, more than 95% of consumers in the top 100 non-game apps on the iOS App Store and Google Play purchased subscriptions to enjoy the app services. In addition, by 2020, global consumer spending on games is expected to exceed $75 billion.

Through paid subscription services, consumers can access a wider range of content and services for a fixed fee. Subscription services will also create opportunities for games that have not been successful through app purchases or advertising revenue models.

Apple Arcade and Google Play Pass offer subscriptions to a selection of exclusive games for a fixed fee, which means developers are free to design new game mechanics without being restricted by integrating free-to-play mechanics. This means that existing games can find new revenue streams in addition to existing in-app purchases or in-app advertising, giving them new life.

These subscription services are particularly effective for families. An environment where everything has a single price is particularly important for parents who want to cultivate the right gaming perspective for their children. Some gamers who focus on game quality will also resonate with this. They can continue to get innovative and well-designed games for a fixed cost.

Both Apple Arcade and Google Play Pass will be important complements to the existing app store model, and regardless of their initial performance, these subscription services will play a key role in long-term mobile gaming strategy and provide opportunities to further improve the mobile gaming ecosystem.

However, getting consumers to move away from the expectation that all mobile games are free to download will be a challenge, and to address this, publishers will need to proactively work with Apple and Google to communicate the value of gaming subscription services.

3. 5G is the next battlefield, and mobile gamers will be the first to experience 5G

While speed has been the main topic of 5G, 5G's low latency is more exciting for gamers and developers because the hardware requirement for mobile online multiplayer games is high-quality wireless connections. Globally popular games such as Call of Duty: Mobile, PUBG Mobile, and Free Fire are all massively multiplayer online games. Among the top 10 games in terms of downloads in October 2019, multiplayer online game users have the longest experience time. This also proves that mobile games call for low latency, and 5G low latency will make such games more enjoyable.

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5G is still in its infancy, but operators are working hard to expand coverage and achieve universal access in 2020. Gaming is the first hurdle in market verification.

While gaming may be a frontrunner in 5G technology utilization, the possibilities extend beyond that. The 2019 Ericsson Mobility Report predicts that by 2024, 34% of mobile devices worldwide will use 5G technology, and 64% of the world’s population will use 5G technology. Increased access to faster 5G networks and 5G-compatible devices will streamline existing mobile channels and further cement the role of mobile networks in our daily lives.

4. New genre: the rise of auto chess games

Auto Chess is a remake of Dota that quickly became popular on Steam. As of November 2019, many major game developers have launched auto chess mobile games, including Valve's "Dota Underlords", Dragonest's "Auto Chess: Origin" and Tencent's "Chess Rush".

Auto Chess games are highly adaptable to mobile devices - the game mode is simple and does not require precise operations. The e-sports field has also shown interest in this type of game. The first Auto Chess Invitational offered a $1 million prize, which is indeed impressive for a game that only emerged in January 2019.

In 2020, we will see further optimization of mobile versions of Auto Chess games. The rise of this type of game reminds us of the fact that the mechanics of popular games will continue to be enriched. In the future, publishers need to look beyond the existing App Store game categories and create new game types that can attract consumers’ attention.

5. Progressive Web Apps are gaining attention

Progressive Web Apps, or PWAs for short, are mobile websites that provide an app-like experience, providing users with a better experience through faster loading speeds, and it does not require users to download additional apps.

It’s important to note that PWAs can help increase conversion rates by simplifying the user experience. PWAs load faster than websites, which is a huge advantage in markets where Internet speeds are still relatively slow, such as India.

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PWAs build a bridge between the mobile web and application experience. Although complete apps are still important for ensuring the best user experience and user retention, PWAs can create more opportunities for first contact, help broaden the top of the funnel, and provide users with a seamless experience in different forms and at different stages. App Annie also said that for major brands, especially in the news, retail and travel industries, loading and availability in low-speed environments are very important - PWAs should be included in the mobile product system.