Mobile gaming has been one of the primary drivers of smartphone adoption over the past several years. Thanks to huge hits like Angry Birds, games have long ruled the top of the charts for mobile usage.
In terms of time spent with mobile apps per day, games and social networking are now tied at 24 minutes each (out of 77 minutes total that consumers spend with apps a day). That is a 10-minute increase for social-networking apps since the first quarter of 2011, when games devoured 25 minutes per day against just 15 for social networking. This is the first time since 2008 (when Flurry began tracking app usage) that any other app category has challenged games.
Flurry, in addition to being an analytics company, is also an ad company. Between March and April 2012, Flurry saw a huge jump in revenue created by social-networking apps. In March, games accounted for 35% of Flurry’s ad revenue created, against 25% for social-networking apps. In April, games held steady at 36%, but there was a huge jump for social networking, rising 12 percentage points to 37% overall. See the chart below:
Where did this increase come from? The major social-networking services - Twitter, Facebook, Google+, Path, LinkedIn and Pinterest - do not have ad presences in their mobile apps. And Flurry’s analytics do not include social photo- and video-sharing apps, such as Instagram and Viddy, as social apps.
Flurry’s CEO Simon Khalaf told ReadWriteMobile that the growth is being driven by group messaging and dating apps. Overall, Flurry has about 200 social-networking apps in that category. Khalaf said that app sessions in the social-networking category grew 17% from the middle of February through April. In addition to increased user sessions, people are spending more time in the apps. As such, some of the social-networking apps have aggressively increased advertising.
At the same time, growth has stalled in both usage and revenue in mobile games (through Flurry, at least). Many consumers who have had smartphones for a while have already downloaded most of the games they are likely going to live with. Words With Friends, Angry Birds, Plants Vs. Zombies, Cut The Rope, Minecraft and, more recently, Draw Something are among the games dominating the mobile game landscape, making it very difficult for new competitors to enter the space and scale effectively.
“As we reach saturation for mobile gaming on a per-user basis (one consumer can play only so many free-to-play games), the Games category could start behaving more like a ‘zero-sum game’ from here on out, meaning that game companies would have to fight over a finite group of consumers in order to grow their businesses,” wrote Flurry’s Peter Farago in a blog post. “For one app to grow, it would have to take from its competitors.”
Many of these apps straddle the line between social networking and gaming. Words With Friends and Draw Something, for example, both have heavy mobile presences and are tied to Facebook’s social graph (not gaming). Social networking and gaming are not mutually exclusive, but Khalaf said that while in Flurry’s system an app could show up both listings, games are not shown in the social-networking category, even if they contain a social element.
Gaming Still Growing
It's important to remember that mobile gaming is in no way decreasing; it is just holding steady in terms of average user time and revenue on Flurry’s network. Overall, like everything in mobile, games are growing like mad. In Q1 2011, Flurry tracked 30 billion application sessions; that same figure in Q1 2012 hit 110 billion. Games will continue to drive mobile adoption, and overall, there are still more gaming sessions than social networking on Flurry’s network. As Farago noted, “As long as the total iOS and Android installed base grows, all categories will continue to grow naturally.”
But several gaming executives we contacted recently noted that it is becoming more difficult to reel in the normal gamer than it used to be. Not all games are created equal. For one thing, there are now multiple different genres that draw completely different demographics. People who play games such as Words With Friends and Draw Something (social gaming) may not be interested in games such as Infinity Blade and Final Fantasy (hardcore gaming). Games such as Tiny Tower, Angry Birds or Contre Jour (casual gaming) appeal to yet another group. Game developers' goal of breaking through the clutter is getting more difficult in all the categories.
On the other hand, the sub-level of social-networking apps still have a lot of room to grow. When we think “social,” most people assume Facebook and Twitter, but the entire category is much broader. Social-networking apps include group messaging and dating, as Khalaf mentioned, but also location-based apps such as Foursquare, Highlight and Glancee, and question-and-answer sites, as well.
It will be interesting to see if social-networking apps can maintain their momentum. Are dating sites and group messaging really on a continuous growth path, or are Flurry's latest numbers a one-time anomaly spurred by Valentine's Day in February, March Madness and other springtime activities? Farago thinks social networking's rise is sustainable.
“Even with an influx of new consumers into the market," Farago said, "the expected would-be casual gamers will be increasingly wooed away from games by compelling social networking and other apps. Going forward, the games category will have to look to innovate on mobile to maintain its dominance and growth.” If there's another hit like Angry Birds, gaming could easily regain its spot at the top of the charts.
Image courtesy of Shutterstock.