Consumer spend on mobile games will surpass $100 billion in 2021, according to projections released by App Annie, representing the significant majority of total spending on mobile apps in general.
Total spend on mobile apps in 2021, through all app stores, will be just over $139 billion, App Annie said, more than double the $61.8 billion spent in 2016. Games will follow a similar trajectory, more than doubling the $50.4 billion spent last year to $105.2 billion in 2021.
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Non-game apps represented a majority of downloads in 2016, and that will also be true in the future, but they will contribute just $33.8 billion of total revenue in 2021.
China will strengthen its position as the single most important market for both downloads and consumer spend, the former growing at a 19% CAGR and the latter rising at an even faster 24% rate. In 2021, China will represent $56 billion of that $139 billion total spend, with almost 130 billion downloads.
According to App Annie, this momentum is due to China's unique strengths as an emerging market. Tier 1 cities are almost saturated, for example, but the rest of the country is still "underpenetrated." While India is its closest rival in terms of sheer population size, spending power is "notably higher" in China than in that and many other emerging markets.
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India will see "spectacular growth" in smartphone ownership over the next five years, making it the second largest market for downloads - ahead of the US - by the end of 2021. However, it will remain a relatively minor territory in terms of consumer spend, making advertising the most appropriate business model.
The top five countries - China, US, Japan, South Korea and the UK - will increase their revenue share from 75% in 2016 to 85% in 2021.
The iOS App Store was the most lucrative single store in 2016, and it will remain so in 2021 with a $60 billion total consumer spend. However, App Annie estimates that 2017 will be the first year that Android, already the comfortable leader in terms of downloads, will overtake iOS in terms of spending.
In 2021, Google Play and the combined third-party Android app stores will take $78 billion in consumer spending, with more than 300 billion downloads. By contrast, the iOS App Store will take $60 billion from 42 billion downloads.
App Annie closed its report by advising developers to continue investing in mature smartphone markets, because device saturation will not significantly harm the growth of gross revenue on the app stores. Consumer spending on non-game apps will also grow at a faster CAGR than games - 25% versus 16% - as the public becomes more open to spending on news and dating through subscription models.
The focus, though, should be on China, which will represent 41% of all consumer spending on mobile apps by 2021.
You can download the full App Annie report here.