Not too long ago, you’d hear boomers blaming everything wrong in society on mobile phones. This was before they signed up on Facebook and started receiving fake news on WhatsApp and became one of the largest demographics for these products. Coincidentally, the two Meta-owned apps also had the third and fourth most downloads in Pakistan during 2023, at 23.4 million and 22.8m, respectively.

According to the State of Apps 2023 report by Data Darbar and Begin, Pakistan had the ninth-highest volume of downloads, at 3.51 billion. Not only does this represent a slight decline, but also breaks the two-year streak where we were the fastest-growing major market in the world. However, keep in mind that global installs only edged up 0.8 per cent to 257bn in 2023 from 255bn the year before.

Just a little under two-thirds of all downloads were towards applications while the remaining went to games — largely in line with the global mix. On the revenue side, it’s typically the opposite where total consumer spending, before store fees are taken out, was around $87m. This is higher than $83m in 2022, and outpaced the worldwide growth of 2.4 per cent, though the underlying base has absolutely no comparison.

Yet, a large chunk of this demand for mobile products ends up going towards foreign players, be it the big tech giants from the US or China to gaming studios from the Middle East. Apart from a few exceptions, local publishers were either largely missing or operating at a rather small scale.

It seems that our infatuation with imported products extends to apps as well

Just try to look for local names in the list of apps with more than 50 million downloads. Other than Jazz’s Simosa and a few games, you’d be hard-pressed to find anything familiar. It seems that our infatuation with imported products is not just limited to merchandise goods but even extends to the digital sphere. When you filter products by monthly active users, a relatively better metric, the results become even more disappointing.

But it’s not all bad. At least in terms of volumes, Pakistan has seen a decent indigenous supply. According to Appfigures, apps published by Pakistani developers hit just over 4,800 in 2023, with 77.7pc of them on Android. For context, this is higher than peer countries like Egypt and Philippines. Similarly, the number of local developers stood at 4,400, who had more than 20,000 active applications between them.

What was most heartening is how Pakistani developers stood out in terms of new iOS games released, at almost 1,100, in 2023. This was only second to Vietnam’s 3,000+ and tied with Indonesia. The reason iOS apps matter more is because their revenue potential is substantially higher than Android, sometimes even by a factor of 10x. The presence of Pakistani studios in this sphere implies an export bias, and therefore means dollarized revenues.

However, a significant chunk of the Pakistani gaming demand was still captured by international products. UAE-based Yalla Ludo led with an estimated 11.2m downloads, followed by Subway Surfers at 10.2m, and Ludo Star at 10.1m.

Local apps hit just over 4,800 in 2023, which is higher than peer countries like Egypt

One bright spot in all of this was Islamabad-based Vyro AI. In just a few years since its operations, it has become a major studio and dominated the charts of the most downloaded apps from Pakistan. Its top product had an estimated 14.9m installs while retaining the mantel for the next two apps, at 12.5m and 12.4m.

Their example highlights the underlying opportunity in tools and productivity as it is comfortably the largest genre of apps, with downloads of 24.8bn globally. For Pakistani developers, this is a majorly unserved market and needs to be looked at. On the gaming side, a few local studios stood out, especially in hypercasual.

Top among them was Ramp Car Games: GT Car Stunts by Fun Drive Games with an estimated 46m downloads, followed by Car Driving School: Car Games by Spark Games Studios at 32.9m. FPS Commando Shooting Games by Hazel Mobile Games was in the third spot with installs of 22.2m globally.

While the share of games in global consumer spending has trended slightly downward over the last few years, the market is still over $100bn, not including the money doled out by advertisers. Unfortunately, Pakistani studios still haven’t made their mark in this space, as, say, Turkey or Israel have. That needs to change and hyper casual, despite the risks of their shorter lives, is still the best way forward due to the availability of talent and relatively lower capital requirements.

The writers are co-founders of Data Darbar

Published in Dawn, The Business and Finance Weekly, May 20th, 2024

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