Expand / Apple App Store.
Throughout the short history of smartphone apps, games have consistently generated more revenue than non-gaming app categories. But that has finally changed in the United States, according to new data from application intelligence firm Sensor Tower.
The change began in May 2022. In June, 50.3 percent of U.S. consumer spending on apps was on apps that didn’t belong to games like TikTok, Netflix, and Tinder. Spending on non-gaming apps has recently doubled than spending on games. Gaming spending exploded at the start of the COVID-19 pandemic in late 2019 and early 2020, but by the end of 2020, non-gaming-related apps were catching up and surpassing gaming in 2021.
This has been driven in part by the shift that many applications have made to a subscription-based model lately. For years, games generated more revenue not necessarily because they got more downloads (though they often did), but because their long-term monetization was clearer, more consistent, and more robust thanks to in-app transactions. . Other types of apps didn’t have that, and many were sold for single purchase prices or offered a limited number of premium upgrades.
In an effort to increase its App Store revenue, Apple met with developers to evangelize the recurring subscription model. Subscriptions have become more common in many types of applications.
Announcements
While the subscription model has sometimes been controversial with some users, it has become an aid to overall revenue in app markets. Sensor Tower notes that 400 different apps handled at least $ 1 million in consumer spending in the second quarter of 2022 in Apple’s App Store. In the same quarter, 61 apps in the App Store reached at least $ 10 million, which is greater than the number it had in $ 1 million in 2016.
It’s important to note, though, that this change only applies to Apple’s App Store for iPhone and iPad. Games generate even more revenue on Google Play, the app store on the competing Android platform. In fact, it’s not even close: U.S. consumers spent $ 2.3 billion on Google Play games in the second quarter of 2022, but about $ 1 billion on different games.
And even in Apple’s App Store, games still dominate consumer spending in most places outside the United States.