3-Year European Market Forecast: App Spending to Surpass $23 Billion in 2022 as Non-Gaming Surges

Non-gaming apps will account for the majority of user spending on Apple’s App Store across European markets in 2020, taking up a 51 percent share, or $4 billion, according to a new forecast based on Sensor Tower Store Intelligence data. We project that non-gaming apps will continue to increase their share of iOS spending in Europe over the next three years, accounting for 61 percent of all revenue in 2022.

Overall, we forecast that user spending in mobile apps across Europe on the App Store and Google Play will hit close to $23.5 billion in 2022. This represents an increase in revenue of 109 percent from 2019 and a compound annual growth rate (CAGR) of 27.9 percent over the intervening years.

App Store and Google Play User Spending to Double in Europe

Our projections forecast that gross App Store revenue will reach almost $12.6 billion in Europe over the next three years, an increase of 109 percent over 2019’s total of $6 billion at a CAGR of 27.8 percent. Google Play, meanwhile, is set to hit $10.9 billion in 2022, up 109 percent from 2019 at a CAGR of 27.9 percent. The App Store’s market share for revenue will stay static, accounting for 53.7 percent of all user spending in 2022, the same percentage as in 2019.

First-time app downloads in Europe are forecast to grow to approximately 29.6 billion in 2022, an increase of 22.7 percent from 2019, at a CAGR of 7.1 percent. Installs on Google Play are set to rise to 22 billion in 2022, an increase of 24.9 percent from 2019 at a CAGR of 7.7 percent. The App Store, meanwhile, is forecast to increase its number of yearly downloads to close to 7.6 billion, up 16.8 percent from 2019 at a CAGR of 5.3 percent.

Great Britain and Germany Will Lead Revenue Growth

The key market driving the rise in user spending in Europe will be Great Britain, with app revenue set to grow to $4.1 billion in 2022, an increase of 91.6 percent from 2019. Germany is expected to be the No. 2 ranked country for European app revenue, generating close to $3.7 billion from user spending in 2022, an increase of 77.9 percent from 2019. France is projected to round out the top three, accumulating $2.6 billion in 2022, up 91.4 percent from 2019.

Russia is predicted to continue leading the way for app downloads in Europe, generating 6.2 billion installs in 2022, an increase of 17.2 percent from 2019. Turkey is expected to rank No. 2, with downloads growing 32.8 percent from 2019 to close to 4 billion in 2022, while Great Britain is forecast to generate the third highest number of downloads, up 19.4 percent from 2019 to 2.6 billion installs.

Social Networking Rises to No. 2 Category for Revenue

Across both the App Store and Google Play, Games is predicted to continue to be far and away the leading category for European user spending in three years. Combined gross revenue for games is expected to hit $12.9 billion in 2022, up 72.8 percent from 2019.

Social Networking, meanwhile, is set to overtake Lifestyle as the No. 2 category for user spending in 2020, holding onto that position in 2022 with $1.4 billion in revenue, up 174.7 percent from 2019. Lifestyle revenue will increase to $1.3 billion in 2022, up 162.7 percent from 2019, but will fall just below the Social Networking category.

Overall, the share of revenue taken by the Games category will continue to shrink from 66 percent in 2019 to 55 percent in 2022. Its share on the App Store will fall to 39 percent compared to non-gaming, while on Google Play it will continue to take the majority of revenue, despite declining from 81 percent in 2019 to 73 percent in 2022.

When it comes to downloads, the Games category will generate the most installs in Europe, reaching 12.4 billion downloads by 2022, up 19 percent from 2019. The Utilities category of apps will rank No. 2 for downloads in 2022 with 2.2 billion downloads, up 13.6 percent from 2019, while Photo & Video will usurp Entertainment to rank No. 3 with close to 1.6 billion downloads, up 18.1 percent from 2019.

Europe on the Rise

Based on our overall analysis, Europe as a region appears primed for strong non-gaming growth, in a market that’s still set to increase in aggregate despite gaming steadily losing market share. Non-gaming is in the midst of explosive growth, helping further diversify the apps space and based on what’s able to succeed in this obviously healthy market. As such, Europe’s app market creates numerous opportunities for non-gaming publishers to find a sizable audience that is expected to grow significantly in a relatively short period of time.

Sensor Tower has established its latest market presence in Europe with the recent opening of our London office, which joins Beijing, Seoul, and San Francisco in our global operations. We will continue to monitor emerging trends and dynamics in all European regions for our ongoing coverage of this flourishing market.

Note: The revenue estimates contained in this report are not inclusive of local taxes, in-app advertising, or in-app user spending on mobile commerce, e.g., purchases via the Amazon app, rides via the Uber app, or food deliveries via the GrubHub app. Refunds are also not reflected in the provided figures.