It is NEXT YEAR PREDICTIONS time again 🙂
This TechFirst we’re chatting with App Annie CEO Ted Krantz about what’s hot, what’s big, and what’s growing in mobile in 2022. Fintech, sure. Social monetization, yep. TikTok continuing to blast off, yes. Plus billions being spent in metaverse (yes! already!) and the ever-expanding billion-download-app club.
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We also chat some Roblox, NikeLand (which was news to me), crypto, Subway Surfers (still around! still killing it!) and The Company Formerly Known As Facebook.
TechFirst podcast: 2022 app predictions with App Annie
Transcript: 2022 mobile predictions on games, metaverse, crypto, NFTs, social, and fintech
(This transcript has been lightly edited for length and clarity.)
John Koetsier: Can anything stop TikTok from complete domination of the known universe? Why is consumer spending in social apps growing 30 to 40% a year? And, is consumer spending on metaverse mobile games already at a multi-billion dollar run rate?
It is 2022 predictions time and to answer those questions — and probably many more — we’re chatting with App Annie CEO, Ted Krantz, who just released a big predictions report for 2022. Welcome, Ted.
Ted Krantz: Glad to be here, John. Thanks for having me.
John Koetsier: Hey, super happy to have you. I am in Vancouver, you are in Half Moon Bay, and we are talking about 2022. What is the future bringing?
Ted Krantz: Well, it’s bringing the most addictive device known to mankind, called mobile. Right? The big screen is forever dead. This is the most immersive platform that has ever existed.
And, you know, with the fourth generation, Gen Z, now participating fully in the app economy in the mobile experience, starting to see some acceleration into some exciting areas.
John Koetsier: Let’s talk about TikTok. What is going on here? I mean, there is seemingly nothing that can stop this app’s meteoric rise … what’s going on with TikTok?
Ted Krantz: I’m so surprised you asked me about TikTok, I wasn’t quite prepared [laughter].
No, it is the fastest to the $1 billion clu- or excuse me, the 1 billion user club — active users. We anticipate 1.5 billion MAU for TikTok in 2022, which would put it just behind Facebook and WhatsApp as the only other two with more users.
And those at 1.8 billion users for Facebook and 1.7 for WhatsApp. So it’s a meteoric rise for sure.
John Koetsier: It absolutely is. And I mean, I think you’re talking Facebook apps specifically there, right, not including Instagram, is that correct?
Ted Krantz: Facebook properties. Yep.
John Koetsier: Yep. So, that makes a ton of sense and the interesting thing is there, it’s not just that it’s got that many users, they spend a ton of time too, right? I mean, they’re scrolling in that app for 30 minutes, 60 minutes.
Ted Krantz: Yeah, no, all of the social platforms, you know, talking about what’s so disruptive with mobile, it’s the immersive qualities that mobile brings that’s never been seen before.
I mean, the big screen is essentially dead for the younger generations, but we’ve never seen a platform, from a technology perspective, provide so much immersion. Now I do think certainly COVID, in the fact that we’ve been remote as long as we have, has accelerated some of that immersive experience.
But you also see as we’re starting to move around a little bit, that that same situation of being really the compelling foundation for all of the interaction, even, you know, these younger generations when they gather they’re still gathering and co-creating in the same room, not just virtually over screens and across different locations. So it’s a dynamic that we’ve never seen before.
John Koetsier: I want to just dive into that for half a second, because it was funny, you said right off the top, ‘The big screen is forever dead,’ and I was going like, what are you talking about? I like my big screen!
But then I’m thinking about my teenager, right? And it’s hard to drag that kid down to the media room where the big screen is on the wall ’cause he’s on the little screen in his hand. It is challenging, and it’s like, do you want to watch a movie? Nah, [laughter & crosstalk] I was like, this is…
Ted Krantz: Right. You can go watch a movie on my phone, no problem.
John Koetsier: [Laughing] Exactly. And you said your actual — I’m not sure if this is a prediction or it’s a fact today — I saw in your report there’s 20 apps in the billion downloads club, is that a prediction or is that actually true today?
Ted Krantz: No it’s a prediction moving into 2022.
So that coveted one billion download club is definitely in play more so than we’ve ever seen before. You know, you’ve got about eight social players: Facebook, Instagram, and Facebook properties at the top. A couple of games: you’ve got Candy Crush Saga that’s dominated for a very long time … Subway Surfers. You’ve got some tools and some of the kind of applications that the business community uses in play too, which is interesting. Pinterest will definitely, we’re pretty confident of that prediction, cross that threshold going into 2022 as well.
So the club is widening.
John Koetsier: I love it. Subway Surfers has been around for, I think it’s a decade now. I actually think it’s a decade. I think it’s been on about five of my phones. I don’t play it very often. I pulled it out, I think it was last week, ’cause I saw it in the news and I thought, oh, what the heck, I’ll play that game again.
But it’s still there, it’s still fun, they’re still going to new cities — I think they’re in Vancouver right now, actually, so that is interesting. I want to dive into a new buzzword that, well, is it new? It’s been around for a while, but it’s really hot right now, which is: metaverse. And we’ve been hearing metaverse, metaverse, metaverse everywhere. Facebook is now Meta.
Ted Krantz: Yes.
John Koetsier: You’re saying there’s actual money being spent here that’s not just on the devices, not just on the Oculus Quest or anything like that. What’s the trend? What games are we talking about here and how much money are these people spending?
Ted Krantz: Yeah.
So in 2022, we’re forecasting over $3 billion for the metaverse. And we kind of see it as the collision of gaming, NFTs and crypto, all of those components.
Other categories too, like dating, Bumble is on record that they’re exploring opportunities in the metaverse as well. But I think the primary emphasis for metaverse, at least in the short term in 2022, we believe is going to be around gaming companies with apps like Minecraft and Roblox. Roblox doing some exciting things, if you saw — I’m sure you did, John — the announcement with NIKELAND as well. So I think both of those two are going to score very heavily and quick in the metaverse.
John Koetsier: I did not see that announcement and that is amazing. I mean, Roblox has been a crazy story here with a creator platform, right, people building a ton of stuff. There’s been some pushback on the money that they give to creators, especially kids, but the creativity that they enable is obviously undeniable and adding brands into that … NIKELAND? I mean [laughing], this is the metaverse right here.
Ted Krantz: It’s crazy. I mean, you can go back as far as Farm Land, you know, the fact that people will buy to enable currency in a profile in the metaverse is a reality. I think it’s a big commercial opportunity. And I think that you’ll see more and more of that come into play and start to get really, pretty sticky even in 2022. So I’m excited to see what happens with NIKELAND, we foresee that to be a big success for Roblox.
John Koetsier: I’m going to check that out right after we do this recording and I look forward to seeing how that goes as well. We know FinTech is huge and you’re forecasting it to continue to grow. We know entertainment apps are huge. Streaming is off the charts and you’re forecasting that to continue to grow as well.
But you’re also forecasting and actually talking about money that’s actually being spent today. You’re forecasting big growth in social, and that’s a little bit new because social has typically monetized via advertising, right? I mean, Facebook Meta is the prime example there, right? We’re seeing some different models emerge. Talk about that and talk about the money that you’re seeing starting to come in via social apps.
Ted Krantz: Yeah, so for 2022, we’re predicting in-app purchases in around $9 billion for social apps. So that’s led by Tikok. It’s followed closely by Bigo. And Twitch is number three.
So those three platforms are probably kind of the most exclusive in terms of those target opportunities. But to your point, in terms of how that is monetizing, you know, you see the opportunity to really dive into followers and not just the advertising piece of that, starting to get really sticky and everybody coming at it with a little bit of a unique angle.
But then what I also think is interesting is kind of the parlay between social and gaming, because there’s, and we talked a little bit about the metaverse, but this whole co-creation and coplay and crossplay. That is the reality for both social and gaming, and so you start to see a little bit of this integration between those two categories that I think will continue and also drive into the streaming category as well …
… so that entertainment, gaming, social all become kind of this cross domain reality of a virtual world that expands the opportunity for more immersion, right?
Because you’re crossing paths across all three of those domains.
John Koetsier: Wow. That’s a consolidation of very interesting things coming all together. What’s super interesting for me in that as well, is that, as I mentioned, traditionally, social networks have monetized via advertising and that’s led to a certain type of growth. That’s led to a certain type of winner-take-all type of philosophy.
But if we see it becoming more and more common to have in-app purchases in social apps, we see there’s many games that are billion dollar games — many, I mean, there’s a significant number of games that are billion dollar games and a great number that are making tens of millions, hundreds of millions of dollars that could totally change the game for the kinds of social networks that could be successful.
Ted Krantz: Yeah, definitely. That’s why we were very clear that that coveted one billion club for downloads is wide open. There are going to be more players that stand a real chance there that come in and can be disruptive. TikTok’s kind of leading the way in terms of that disruption over the last couple of years, but there will be others.
But, like I said, this play between entertainment, social and gaming is huge from my perspective, because I do believe the reality looks more like instead of watching a movie, which was what we did when we were growing up, you actually are part of and star in the movie that you want to entertain yourself with in the future, which is pretty crazy.
John Koetsier: And that’s kind of a metaverse play right there, obviously, this consolidation/aggregation of experience, it reminds me of the concerts that Fortnite was doing, right, where you’re playing the game, you’re a player in the game, you’re watching a show, you’re watching with others in a gaming environment … it’s a whole different world [laughing] … literally.
Ted Krantz: Yeah, it really is. So the future is going to be very exciting in terms of how this opportunity plays out. You mentioned, you’re talking a little bit about the kind of the FinTech piece of — well, I don’t know if you wanted to just switch that way, but we had some interesting insights there that I thought we could…
John Koetsier: Absolutely. I mean, that’s a huge area. What are you seeing in FinTech?
Ted Krantz: Yeah, it’s fascinating to me. I probably get most excited about this because it’s so disruptive to the retail banking realm in particular, but obviously we’ve got crypto and trading opportunities and things like that as well.
But what’s really interesting when you look at the data is that this is really Millennial-driven. They’ve already taken over kind of the Boomers and the Gen X-ers in terms of adoption and leading the way there, but what’s fascinating is Gen Z is catching both the Boomer and Gen X demographic really quick. So you can see that the youngest generation targeted from a commercial perspective, Gen Z, and the Millennials that really grew up in the sweet spot of digital are driving the adoption across these different apps, led in the U.S. by Robinhood and Coinbase as a couple of examples.
But there will be others, and then you can also see some emergence of the banking apps in the territories like Brazil, Mexico and the Philippines, emerging market opportunities as well with neobanks.
John Koetsier: Well, and what’s interesting there is it’s the same story as we just talked about in entertainment. A mobile app is pretty much the only experience of a bank — a “bank” — that many of these people, young people who are starting to be banked via mobile, will ever know, right? They’ll never walk through the big doors into the marble lobby [laughter & crosstalk]…
Ted Krantz: That’s right … but you know, it’s fascinating too, is some of those big institutions that we know by name and have used for years, and set up your autopay, and now you look at all these branches getting shut down. So you can see that the industry is very much moving to a virtual realm in terms of servicing banking clients.
John Koetsier: Mm-hmm, mm-hmm.
Ted Krantz: So that’ll offer up a lot of opportunities as well.
John Koetsier: Well, Ted, this is about 2022 and predictions. What stock should I pick? What crypto should you…
Ted Krantz: [Laughing] Yeah. Yeah, it’s pretty clear that the Millennials are leading the way on crypto. I won’t go into any specifics in terms of what I might recommend, but certainly that world is wide open. I think there’ll be a lot of other players, lots of exciting opportunities across the board for investments with crypto.
I think Coinbase is a winner, right? They are positioned very well in terms of being open to market opportunities and really being kind of a de facto standard for, you know, especially in this younger generation active in that app. And so I think Coinbase stands to do really well.
John Koetsier: Nice. Well, thank you so much for taking this time, Ted.
Ted Krantz: Yeah, thank you for the time as well, John. I appreciate it.
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