Smartphone games face new competition from social apps, says report

Over the past 40 months, games have remained the dominant app category on smartphones, but according to new data from Flurry Analytics, social networking apps have recently narrowed the gap. The firm's new report (which excluded data from tablets) compared smartphone usage across various app categories and found that in Q1 2011, game app usage led social networking app usage by an average of 10 minutes per day, but in Q1 2012 those categories were even, with users spending an average of 24 minutes per day using apps in each category. With social networking and game app usage now neck and neck, smartphone games have a real rival on the app market. Flurry warned that since game apps are seeing slower growth, demand could be reaching a saturation point, which partially explains why consumers are taking interest in other app categories. In addition, Flurry noted that social networking apps have seen a much faster increase in ad revenue than games have. Between February 2012 and April 2012, game apps earned a respective 35 percent and 36 percent of total ad revenue on Flurry's AppCircle network, while social networking apps increased from 24 percent to 37 percent. While this data only addresses apps that leverage Flurry's traffic acquisition network, the firm noted April marks the first month in which social networking apps have generated more ad revenue than games. Looking at the data at large, Flurry reported that growth for game apps on smartphones could be reaching a plateau. As it becomes more difficult to attract new players, the firm says smartphone games will eventually have to fight over a finite audience of users if they hope to grow their business. Even as new players enter the market, Flurry said casual smartphone games will also have to compete with the increasingly popular social networking space, as those same casual users have become increasingly attracted to apps outside of the game category. Image credit: Flurry Analytics