2016 was an amazing year for apps and games. We saw some huge deals go down such as the purchase of LinkedIn by Microsoft, Gameloft by Vivendi, King by Blizzard, and many others. On top of that, the Google Play Store and Apple App Store saw gains across the board. According to most pundits, these gains should continue in 2017. That’s the future, though. Let’s take a look at the last year in the world of apps and games.

People spent more time in apps and games in 2016

The stats:

Perhaps the most important stat in all of 2016 was how long people spent inside of apps. According to App Annie, the average user spent over 150 billion more hours in apps in 2016 than they did in 2015. The number of hours spent in apps totaled nearly 900 billion. That’s good for about a 15% increase overall. Google Chrome, YouTube, and Facebook led this category. By a lot. We’re guessing Pokemon Go helped drive this metric a lot as well.

The takeaway:

The conversation completely changed in 2016. Download numbers stopped being the big metric that developers and pundits used to calculate an app’s success. Things like daily active users (DAUs) and time spent in an app became the more important metrics. Seeing large growth in this area is a better indication of how well the app market is doing than download numbers are. As you can see from the graph above, business is currently good and improving.

People also downloaded more apps and games in 2016

The stats:

The number of apps and games downloaded in both Google Play and Apple’s App Store grew considerably in 2016. The number of downloads increased by 13 billion from 2015. Total apps and games downloads were over 90 billion overall. That’s a growth of 15%. Much like 2015, Google Play saw more download growth than Apple. China also contributed about 80% of Apple’s download growth.

The takeaway:

According to App Annie, most of the growth in iOS was for travel, finance, photo, and video apps. By contrast, Google saw a lot of growth from social, productivity, and tools. App Annie’s theory is that Google Play is present in more developing markets. Thus, their numbers continue to skew toward the essentials such as messaging apps, social media, and security apps. Apple’s prevalence in developed markets could be why their growth is in more specialized categories. That makes sense to us.

Developers made more money on both platforms

The stats:

2016 was a huge year for revenue. The overall revenue for both major app stores combined improved by 40% from 2015. Overall, both stores made about $35 billion in total officially. The App Store’s revenue growth totaled 50% (about half of which came from China alone).

As per the norm, iOS outpaced Android in this instance although both markets saw solid growth. About 90% of Google Play’s revenue came from games. That number drops to about 75% for iOS. When App Annie includes third-party Android stores and advertising revenue, the total climbs to a whopping $89 billion.

The takeaway:

Why are there so many freemium games on mobile? This is why. Companies go where the money is and it is inarguable that mobile gaming rules the revenue stream. We expect that trend to continue in 2017. Additionally, we can see that while Google Play and the App Store are popular and trusted, they represent less than half of the total mobile revenue stream. Perhaps the biggest takeaway is we can now see what kind of effect China can has on an app store. More than 70% of Chinese smartphone users use Android. Imagine if they also had a fully functioning Google Play Store.

Developing markets are downloading all the things

The stats:

We’re starting to see a real drop in download growth from developed markets. In 2016, India surpassed the US in overall downloads while Brazil and Indonesia saw good growth. Four of the top five countries in “time spent in apps” were also developing markets. Basically, developing markets are where it’s at right now in terms of download growth and app usage.

The takeaway:

Remember when we said that download numbers weren’t that important anymore? This is why. We’re seeing serious maturation in developed markets. Users there have found the apps and games they like so the growth is beginning to taper off. By contrast, developing markets are seeing these apps for the first time and are downloading more of them. Support for developing countries (particularly language support) will be crucial as we expect developing markets to dominate the download charts for years to come.

Mature markets download less, spend more

The stats:

Mature markets like Germany, Japan, and the United States aren’t showing the download growth they used to. Some developed markets, such as Japan, even saw a decrease in the number of apps and games downloaded in 2016. However, the amount of time spent in apps and the amount of money spent on them increased significantly. Even in countries where downloads were down.

The takeaway:

First thing’s first. Don’t let anyone tell you that people aren’t downloading apps or games in mature markets. All the graph shows is that people in these countries downloaded about the same number of apps and games that they did last year (which was a ton). The big takeaway is that these mature markets are finally starting to spend some real time and money on apps and games. This suggests that people in more mature markets are starting to get a bit more selective of what they download, but they’re willing to spend more time and money on the apps and games they do download.

Video streaming grew in a big way

The stats:

Video streaming grew fairly quickly almost everywhere last year. The United States saw 250% revenue growth, China saw 370% growth, and the United Kingdom saw 420% growth. In overall revenue, the United States accounted for more than $200 million in revenue, China grew to over $125 million, and the UK is around $15 million. Those numbers are just for the top three streaming apps in each country. That’s very impressive.

The takeaway:

The proliferation of video streaming continues to be a dominant source of revenue in the app market. Additionally, App Annie noted that most users who subscribe to video streaming services were more likely to do it through an in-app purchase subscription model than going to the website or using another outside source. Expect to see more of that happening. YouTube, Netflix, ESPN, Youku, iQIYI, Tencent Video, and BBC News were big players in the video streaming market in 2016 based on their monthly active user counts.

Retail apps did pretty well too but more work is needed

The stats:

Retail had a big year in mobile in 2016. Retail apps accounted for 44% of retailers’ Internet traffic and 31% of sales (on average). Additionally, the graph above shows that most of the growth was for “digital first” retailers like Amazon. The growth for “brick and click” stores (as App Annie calls them) like Walmart and Target were a little more wild, but saw some growth in some countries. Growth for digital first retailers is as high as 65% in some places. In most countries, people have between two and five shopping apps installed.

The takeaway:

Simply put, people are getting more comfortable shopping on smartphones. We saw an inkling of this trend when people spent $1 billion using mobile apps during Black Friday 2016. However, brick and mortar stores seem to be having some problems. Growth was solid in some areas, but generally skewed much worse than digital-first. This could be because people prefer going into the actual store. Nevertheless, this is a challenge for brick and mortar stores that they’ll need to overcome to compete in this space.

Retail banking vs fintech, let the game begin

The stats:

Retail banking saw its first real threat from fintech (web based banking services, like PayPal) in 2016. Services like Venmo saw their user base double in 2016. People are spending more time on banking apps in mature markets with users in the United States, France, and Germany accounting for more than five million banking sessions in 2016 (up a significant amount from 2015).

The takeaway:

The status quo is holding for now. Traditional banking remains dominant in the mobile space. However, there were some indications that fintech is closing the gap. PayPal, Apple Pay, Samsung Pay, and Android Pay are making some big moves while apps like Venmo are growing rather quickly. Early attempts from banks to keep up (Chase Pay) also performed poorly which didn’t help. We don’t anticipate the status quo changing in 2017, but don’t be shocked if the gap gets smaller by the time we do this piece next year. We should also see traditional banks making bigger strides into the mobile space to try to keep up with their new competitors.

Mobile gaming had a great 2016

The stats:

Mobile gaming had one heck of a year in 2016. The big stat here is ARPU (average revenue per user). In this instance, most countries saw growth from last year. Countries like the US are averaging about $5 per user while countries in Japan are up to about $30 per user. These are all higher numbers than in 2015. Pokemon Go led the charge with $800 million in just 110 days and $950 million overall in 2016. The RPG genre generated almost two-thirds of Japan’s gaming revenue.

The takeaway:

The theme for 2016 seemed to be that more people are spending money. Mobile gaming helped lead that charge. Pokemon Go made $800 million faster than any mobile game in existence and was the first mobile game to hit the mainstream as hard as it did. To give it some perspective, Pokemon Go made more money in 2016 than every movie’s worldwide box office draw except Captain America: Civil War, Finding Dory, Zootopia, The Jungle Book, and Rogue One: A Star Wars Story. Mobile gaming is right up there with PC and console game revenue now. It’s safe to say it. Mobile gaming has arrived.

The top apps and games from 2016 by monthly active users

The stats:

There isn’t much to say here. The image above says it all. These are the apps and games that were used the most in 2016. Facebook had the four most used apps in the Play Store in 2016. Blizzard (via King), Supercell, and Cheetah Mobile also had multiple entries on the lists.

The takeaway:

This list does only tell half the story. As per App Annie’s disclaimer, the pre-installed and apps on Android and iOS devices weren’t taken into account when ranking these apps. They also removed apps that were published by the platform owner. That means obvious entrants like Google Chrome, YouTube, Google Maps, Gmail, and the Google App (Google Now) are intentionally absent on the Android list (but were present on the iOS list). Cheetah Mobile is an interesting case as well. They have one game and one app in their respective top ten on Android which you don’t see everyday. We’re also a little sad that people still think they need cleaner apps in 2017.

The top apps and games from 2016 by downloads

The stats:

A lot of the same stuff as the previous list. Facebook dominated the apps while Pokemon Go dominated the games. Every one of the top ten companies are from either the United States or China. The top game companies are a little more geographically varied.

The takeaway:

You can see with this graph and the previous graph which apps were just downloaded and which apps were downloaded and used. This list also doesn’t include apps published by platform owners or pre-installed apps. Perhaps the most interesting thing is that Electronic Arts, Vivendi (owns Gameloft) and Rovio are on the top companies list despite not having any entrants in any other list. These developers made it here due to the breadth of their work, not because they have huge hits like Niantic did.

The top apps and games from 2016 by revenue

The stats:

Here’s where we see the big winners of 2016. The apps, games, and companies that made the most money. There are a few surprises here, but most of this list is what you’d expect. This list is fairly self explanatory.

The takeaway:

Where did Cheetah Mobile go? It’s curious that so many entrants on the top downloaded and top used apps and games aren’t here. This definitely shows how different the “free” and “paid” markets really are. People download and use the free stuff all the time, but the real champions are the ones who can get that dedicated, paying user base that keeps coming back. Perhaps the biggest takeaway here is that most of the top grossing apps are subscription based while all of the top grossing games are freemium titles. If nothing else, it shows that people don’t just buy an app or a game very often. At least not often enough to crack the top ten. That’s why there are so many freemium games.

Related best app lists:

It was a crazy year for mobile in 2016. Were there any facts from last year that shocked you? If so, we want to hear about it in the comments!