Thanks to subscriptions, iPhone apps are finally making more money than games
Thanks to subscriptions, iPhone apps are finally making more money than games
Expand / Apple App Store.
Silas Stein/photo alliance via Getty Images
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 app intelligence firm Sensor Tower.
The shift began in May 2022. In June, 50.3% of U.S. consumer app spending was on non-gaming apps like TikTok, Netflix, and Tinder. Spending on non-gaming apps has recently grown twice as fast as gaming spending. Spending on games was skyrocketing at the onset of the COVID-19 pandemic in late 2019 and early 2020, but by late 2020 non-gaming apps caught up and overtook games in 2021.
This has been partly due to so many apps moving to a subscription-based model lately. For years, games generated more revenue, not necessarily because they got more downloads (although 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 this advantage, and many were sold at one-time purchase prices or offered a limited number of premium upgrades.
In an effort to increase revenue on the App Store, Apple is reportedly meeting with developers to evangelize the recurring subscription model. Subscriptions have become more common in many types of applications.
Although the subscription model has sometimes been controversial by some users, it has become a boon to overall app marketplace revenue. Sensor Tower notes that 400 different apps managed at least $1 million in consumer spending in Q2 2022 on Apple's App Store. In the same quarter, 61 apps from the App Store reached at least $10 million, which is higher than the number that reached $1 million in 2016.
It's important to note, however, that this change only applies to Apple's iPhone and iPad App Store. Games always generate more revenue on Google Play, the application store of the rival Android platform. In fact, it's not even close: US consumers spent $2.3 billion on Google Play games in Q2 2022, but about $1 billion on other games.
And even on the Apple App Store, games still dominate consumer spending in most places outside of the United States.
Expand / Apple App Store.
Silas Stein/photo alliance via Getty Images
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 app intelligence firm Sensor Tower.
The shift began in May 2022. In June, 50.3% of U.S. consumer app spending was on non-gaming apps like TikTok, Netflix, and Tinder. Spending on non-gaming apps has recently grown twice as fast as gaming spending. Spending on games was skyrocketing at the onset of the COVID-19 pandemic in late 2019 and early 2020, but by late 2020 non-gaming apps caught up and overtook games in 2021.
This has been partly due to so many apps moving to a subscription-based model lately. For years, games generated more revenue, not necessarily because they got more downloads (although 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 this advantage, and many were sold at one-time purchase prices or offered a limited number of premium upgrades.
In an effort to increase revenue on the App Store, Apple is reportedly meeting with developers to evangelize the recurring subscription model. Subscriptions have become more common in many types of applications.
Although the subscription model has sometimes been controversial by some users, it has become a boon to overall app marketplace revenue. Sensor Tower notes that 400 different apps managed at least $1 million in consumer spending in Q2 2022 on Apple's App Store. In the same quarter, 61 apps from the App Store reached at least $10 million, which is higher than the number that reached $1 million in 2016.
It's important to note, however, that this change only applies to Apple's iPhone and iPad App Store. Games always generate more revenue on Google Play, the application store of the rival Android platform. In fact, it's not even close: US consumers spent $2.3 billion on Google Play games in Q2 2022, but about $1 billion on other games.
And even on the Apple App Store, games still dominate consumer spending in most places outside of the United States.
Expand / Apple App Store.
Silas Stein/photo alliance via Getty Images
