This Week in Apps #72 - It's All About the Money
This Week in Apps is a short, no-fluff, round-up of interesting things that happened in the mobile industry. Here are our top highlights.
U.S. Revenue Index (30 Days)
Insights
1. Going for gold!
After delays and controversy, the Olympic games finally kicked off in Japan last Friday.
Are people interested in watching the games? Let's have a look at how many new mobile viewers the games have drawn this week by downloads.
NBC Universal is the official broadcaster of the games here in the U.S., and the NBC Sports app is where you'll be able to get the best coverage for the Olympics. But, NBC Sports requires a subscription (through the app or by having old school cable), which could explain why downloads aren't higher. NBC thought of that and saw another opportunity.
Peacock, which is owned by NBC, has a lot of content related to the Olympics available for free. It's not live or 100% comprehensive, but it'll give you the Olympic fix, for sure.
Both apps enjoyed a multiplier on downloads. NBC Sports, which gets a little under 3,000 downloads a day based on our estimates, climbed to a peak of 49K on Sunday, its highest peak of the year. Peacock, which has been on a nice up-and-to-the-right path, has seen downloads top 120K on the same day, up from around 50K in the previous few weeks. Both are still trending higher than average and will likely remain that way until the events end next week.
By the way, here's an interesting forecast of medal count by country from FiveThirtyEight. In case you're into this sort of science.
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2. Why is Netflix playing games?
Netflix announced that they're expanding into a new area--mobile game development.
That's right, Netflix wants to top the charts with games. At first glance, that's not too surprising. Netflix owns a lot of very lucrative IP that can be turned into a game. I can easily see a Stranger Things game making it into the most downloaded games.
But thinking about it again, they can just license that to an experienced shop instead, as many others have done.
The why becomes clearer when you look at Netflix's share of new streaming users.
Or should I say, shrinking share of new streaming users...
Netflix was once the one (and only) streamer, a luxury it had enjoyed for a long, long time. To see how its share changed over the years, I used our App intelligence to analyze the share of downloads of the top four streamers: Netflix, Hulu, Disney+, and HBO Max, between 2017 and 2021 in the U.S., across the App Store and Google Play.
In 2017, Netflix had a commanding 61% share of downloads in the U.S. 2018 was fairly similar, with 60% share, but things started shrinking more quickly as Disney+ joined the race in 2019. When it did, in late 2019, Netflix dropped to 47%. 2020 saw the rise of Disney+ and the rebrand of HBO Max, dropping Netflix's share to just 33%.
In 2021, Netflix's share of downloads sits at just around 25%. Oh, and it's not that the industry is shrinking. At all...
New downloads of the top streamers, combined, more than doubled since 2017! I expect combined downloads to exceed 120M this year.
So, Netflix isn't expanding its horizons with games but rather has to find something it can get into and grow, or else.
Can it? Netflix is new to the mobile gaming game, but between recruiting industry veterans and in-demand properties, there's very little reason to believe they won't be able to enter the arena with a thunder.
3. Not a doctor
Nintendo announced last week that it's going to hit the undo button on Dr. Mario World, the game they released just before Mario Kart Tour. Remember that one? I can't say I do.
Why is Nintendo pulling the plug on the barely two-year-old title? Let's have a look at what matters--Money.
Since 2016, Nintendo has released several games that use my favorite plumber. Looking at revenue estimates, only one really made a dent, and that's not Dr. Mario World.
Since it was launched in 2019, Dr. Mario World brought in a little over $7M in net revenue from the U.S. and Japan, the two biggest markets for the title, according to our estimates. That's not a small chunk and exceeds all of the net revenue from those two markets earned by Super Mario Run. They have different revenue models, though, so let's not read too much into that.
But... Then we look at Mario Kart Tour with its $105M and remember that it launched after Dr. Mario World.
The bottom line. Everything Nintendo does is so well thought out, which means effort is put into it, which means money is spent on it. Quite a bit of it if I had to guess. At less than a 10th of Mario Kart's revenue, it's just not worth the effort.
I don't think this means something's wrong with Nintendo, or Mario as a property, or the App Store, or Google Play, or mobile gamers. It just means that not everything Nintendo does is a home run. I'm curious to see what's next.
4. Clubhouse is open to all, but...
Clubhouse, the audio-twitter, has been making big moves over the last few months. First, it rolled out an Android app, and last week, it officially left the private beta and made it available to everyone.
Expanding to Android scored Clubhouse a big win in terms of downloads, so naturally, you'd expect opening up to the public will have an even bigger impact on downloads.
Did it?
Well... No. Not really. It barely moved the needle.
Downloads on July 22nd, the day after the announcement, grew to 91K across the App Store and Google Play globally, according to our estimates. That's only a tiny bit higher than the 75K downloads recorded on the 21st, which were also a bit lower than the 83K downloads the app recorded the previous Sunday.
That peak, also, was very temporary. Downloads sloped downward as the week progressed. On Wednesday, Clubhouse saw 56K new downloads. About a half of last week's peak.
Wait, what?. Everyone expected Clubhouse to be a runaway success once everyone can access it. But there are a few things to consider. The first is that audio-first social media is in its infancy. The numbers Clubhouse saw so far were nice but not really comparable to any of the incumbents. The second is that there's something special to exclusivity, and not just how it impacts demand but also how it impacts expectations.
When I'm invited to a beta, my expectations are pretty low. I'm excited by the special access I have and am ready to tolerate things that aren't 100% polished. I'm already ready to click around a bit more and spend more effort getting value out of the product.
Out of beta, I expect things to work perfectly. If you've used Clubhouse before, you probably know that it doesn't. Nothing is broken, but the experience isn't awesome. The way you discover rooms is too simple, there's a lot of weird audio spam, and because it's all real-time, you have to be there to enjoy it. That's tough, especially when you consider it's morning here and night somewhere else.
I stick by what I've been saying the last few times I covered Clubhouse in the newsletter. To become a serious destination, it needs to figure out a way to reward its creators.
Oh, and in case you're thinking, what about adding text-based DMs? I specifically skipped over that because I think it's a basic enough component that's necessary for the app and not something to write about. No one's going to download Clubhouse to DM...
5. Oh snap!
Snapchat was in the news a lot this morning and last night. Why? A series of unfortunate events lead to a lot of frustration.
What happened? Snapchat has issues preventing users from logging in, so many users decided to delete and reinstall the app. But, the App Store had a short outage, and users couldn't download any app. That created the kind of chaos that gets the news-press going.
The store was only down for under an hour, though, so everyone managed to get the app eventually. That's not the real story, actually. The real story is Snapchat's growing downloads and new daily high for this year.
Snapchat has been sitting at the top of the charts for as long as many of us can remember, so we expect it to more or less maintain rather than grow. Much like Facebook and not like TikTok.
But... It's trying to and with some success.
Last Sunday, Snapchat recorded its highest day of downloads in 2021, according to our estimates. Between the App Store and Google Play, Snapchat was downloaded more than 1.4M times. That's more than twice as many downloads as Snapchat saw during the April slump, where daily downloads were averaging 700K.
If things continue as-is, Snapchat is expected to have its best year of downloads in 2021. It's already ahead of last year at the same time, and last year was a mega year for the service many thought would disappear with TikTok's growth. Well, not yet!
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All figures included in this report are estimated. Unless specified otherwise, estimated revenue is always net, meaning it's the amount the developer earned after Apple and Google took their fee.
