Social Networking Set To Overtake Gaming On iOS And Android

Games have historically taken larger usage on mobile. The app revolution has changed the way software is distributed and used among consumers.  With a perfect storm of digital distribution, free content and powerful touch screen devices, the success of mobile apps has disrupted industries from telecommunications and games to music and news.

To date, no category of apps has been more successful than Games, directly disrupting the traditional gaming industry.

But, now a sign that something fundamental is changing on the iOS and Android platforms, mobile analytics provider Flurry has found that consumers are spending as much time in social networking apps as they are in mobile games.

The last time that Flurry took a look back in January, it found that half of app sessions were spent in games while 30 percent was spent in social networking apps.

“We take the rise in Social Networking apps as a signal of maturation for the platform,” wrote Flurry’s vice president of marketing Peter Farago. “As game demand may be hitting its saturation point, consumers are also discovering other apps, namely Social Networking.”

You can actually visually see the changes on the charts compared to a year ago. Today apps like Viddy, Socialcam and Instagram are in the Top 5 free in the U.S. on iOS. These are all apps for sharing content like videos and friends. A year ago, these would have probably been mostly games.

There are probably several forces at work in addition to the ones that Flurry describes. 1) The platforms are mature and other app categories are starting to develop. 2) Apple has cracked down on more unscrupulous forms of user acquisition, which benefited developers who had the cash to spend on marketing. Pre-revenue apps like Instagram can’t really justify spending tens or hundreds of thousands of dollars a month in marketing dollars. 3) Twitter and Facebook are starting to emerge as effective ways of distributing mobile apps. If you search Twitter for “Viddy” or OMGPOP’s “#drawsomething,” you’ll see that there are several tweets per minute about both apps.

Flurry also found that the time spent is affecting the revenue that apps in both categories earn. For the first time, advertising revenue for social networking apps in Flurry’s ad network AppCircle, surpassed that of ad revenue for games. The thing you have to consider, though, is that gaming apps are more dependent on in-app purchases of virtual currency. If you look on iOS’ top grossing charts, it’s still virtually all games in the Top 25.

The rise of Social Networking apps also signals the end of the era of gaming dominance within mobile apps.  While the free-to-play business model performs extremely well, enabled by in-app-purchases, it does so primarily for simulation games, a sub-genre of the total games category.  As long as the total iOS and Android installed base grows, all categories will continue to grow naturally.