Until now, gaming apps made up the majority of revenue generated through mobile apps. In 2021, in-app purchases brought 82B in sales, with 61% percent through gaming apps. This has been consistent over the past decade, and in prior years, gaming apps made for an even higher percentage. According to recent reports by SensorTower, that’s all about to change. Experts predict that non-gaming revenue will increase by 176% by 2026, and will become the majority source of revenue.
Why are non-gaming apps growing at such exponential rates? This sector of mobile apps has always been prevalent within the app store, but until recently, they experienced more challenges in generating revenue. Gaming apps historically have been able to generate revenue easily, through in-app purchases that offer enhancements for the player and their game. Whether that be through premium features, skills, or new levels of the game. Many apps also offer a free trial, sometimes referred to as a “freemium” but require a purchase to experience the full game. It's a perfect situation to let users build a relationship with your app, and opt to pay to keep playing.
Non-gaming apps on the other hand really only had two previous avenues to generate revenue: the cost to download the app, and advertising. In most cases, non-gaming apps aren’t going to be a high-ticket item. The average cost per install (CPI) for an app is $2.24. This leaves advertising to make up for the majority of revenue. Yet, in today’s world, users don’t want it. In fact, studies show that users are more likely to delete an app if it has heavy advertising since it downgrades the UX of the platform. However, the past few years have experienced a complete shift in the market, since non-gaming apps have transformed the foundations of their platforms. Finding creative ways to introduce in-app purchases to non-gaming apps, and the emergence of the subscriptions based platform has inevitably reshaped the potential for revenue.
The top-performing non-gaming mobile apps right now all have one thing in common; they’re subscription based. Disney+, HBO Max, YouTube, and Tinder have monthly subscription costs ranging from $5 to $20 a month which are the main drivers of revenue. This relatively new subscription economy has provided non-gaming apps with more ability to stabilize revenue and will account for the majority of revenue in global mobile app spending. In the past, users would pay a one-time fee for downloads, but today - they pay a small fee every month to remain a user. This model has created a system where users don’t feel they are “overpaying” but with large volumes of users each paying the fee, revenue skyrockets.
With the emergence of subscriptions, non-game apps grew at twice the rate of gaming apps at 40% since June 2014 compared to 20% for games. Apple is largely responsible for the shift, as they saw the potential for subscriptions and encouraged mobile app developers to implement more strategies for this type of platform. Today, while the Apple store is performing better in subscription non-game apps, Google Play is still seeing higher revenue in gaming.
Today, the highest-performing non-gaming industries within the mobile app space include e-commerce, entertainment, dating, finance, and food. Not far behind are other industries like travel and healthcare. Each of these industries has benefited from improved customer experience, convenience, brand visibility, and higher engagement that mobile apps provide. Mobile apps continue to be a win-win for both the consumer and the business, providing a better overall experience and more potential for growth.
The previous estimates for non-gaming mobile app growth are just a brief synopsis of how the mobile future will grow. It’s likely that gaming apps will develop a subscription-based model as well, and reap the benefits of a monthly fee. The overarching story told through the progression of mobile apps is that developers continue to find new and creative ways to make the digital world more beneficial for everyone involved. New and improved solutions will likely arise in the near future, and we may experience a second shift in the market We have seen mobile apps take over traditional websites in just a few short years, so it's clear they will be the preferred platform for years to come.
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