App Revenue Statistics

The mobile app has been part of our digital lives for over a decade now. Over this time, they have become a key revenue stream for a maturing digital industry – one that continues to grow across established and emerging markets alike.

Just how much money is the app industry worth? How large a role do mobile games play in generating app revenue? What monetisation strategies do app developers utilise?

We’ve gathered app revenue statistics addressing these questions and many more in the piece below. Read on to find out what we found out…

Key App Revenue Statistics

• Sensor Tower reports total 2018 app revenue of $71.3 billion across the iOS App Store and Google Play Store – 22.7% up on 2017
• iOS App Store 2018 revenue came to $46.6 billon, while Google Play revenue stood at $24.8 billion by this measure
• These app revenue statistics also show, however, that Google Play revenue increased by a greater percentage between 2017 and 2018: 27.3% to the App Store’s 20.4%
• App Annie 2018 app revenue stats show a higher total than Sensor Tower, at $101 billion – though this includes third party app revenue figures
• Since 2016, we’ve seen 75% growth in global app revenue, according to this app revenue data
• China, with total app revenue at close to $40 billion, accounts for nearly 40% of global app revenue by this reckoning – around double US 2018 app revenue
• Chinese app revenue has grown by 140% since 2016
• Sensor Tower H1 2019 app revenue data shows total revenue of $39.7 billion; this reflects a 15.4% increase over H1 2018
• Google Play revenue continues to increase at a greater level than iOS App Store revenue: 19.6% to 13.2%
• App Annie reports that non-game app revenue has risen from $3.7 billion in 2013 to $19.7 billion in 2018 (iOS App Store and Google Play)
• App Annie predicts that total 2019 app revenue will come to $120 billion
• Sensor Tower predicts that by 2023 we could see app revenue come to $156 billion (iOS App Store and Google Play), based on a CAGR of 17%
• By this reckoning, iOS revenue will still be in excess of Google Play, though the gap will have narrowed to $96 billion to $60 billion respectively
• Of mature app markets, Europe is set to see the highest growth in iOS revenue, at 150%, and Google Play revenue, at 200%; this would see Google Play overtake iOS in terms of app revenue in this market
• Netflix was the highest non-game app in terms of revenue in 2018, generating close to $1 billion revenue – and a further $400 billion in H1 2019, preceding a decision to remove the option to subscribe through app stores
• Total 2018 mobile game revenue for the iOS App Store and Google Play Store stood at $54.7 billion, representing 15.2% growth compared to 2017, according to Sensor Tower app revenue data
• These stats show 2018 iOS App Store mobile game revenue, at $33.2 billion is well in excess of Google Play revenue, at $21.5 billion
• Google Play revenue, however, increased by 24%, to iOS’s 10%
• Mobile games account for 77% of total 2018 app revenue by this reckoning – this is a decrease on 2017’s 82%
• Total mobile game revenue growth stood at 11.3% in the first half of 2019, as compared with the first half of 2018, coming to a total of $29.6 billion, says Sensor Tower
• Newzoo estimates are a bit more generous, with 2018 mobile game revenue set at $62.2 billion
• Google Play Store game revenue growth, at 16.8% ,eclipses iOS App Store’s 7.8% according to Sensor Tower H1 2019 statistics; the latter’s total of $17.6 billion, however, remains well in excess of Google Play’s $12 billion
• App Annie reports that China is the biggest market for mobile game revenue, at over $25 billion, representing a 105% increase since 2016; the US reported 45% growth over the same period
• In 2019, the US and China alone will account for 48% of total game spending, predicts Newzoo
• Of these two, the US will be the bigger game market (all formats), generating $36.9 billion to China’s $36.2 billion
• Mobile games will account for 45% of total gaming revenue over the course of 2019, according to these  Newzoo stats; this will increase to 49% by 2022
• Smartphones account for 80% of mobile game revenue, with tablets at around 20%; the former is set to grow at 12% over the course of 2019, and the former at a slower rate of 5%
• Newzoo predicts that mobile game revenue will reach $95.4 billion by 2022
• Arena of Valor, by Tencent was the top mobile game in terms of revenue over 2018 and H1 2019, according to Sensor Tower app revenue stats, generating $728 million in the latter period
• Fortnite was the top game in terms of iOS revenue in the US over 2018, generating $450 million over the course of the year; $40 million of this came in December alone
• Tencent was the number one app developer in terms of revenue over 2018
• According to Sensor Tower, the top-100 app developers in terms of revenue generated an average of $130 million in Q1 2019 ($84 million was iOS revenue, and $51 million Google Play); this figure has risen at a CAGR of 31% since 2014
• If we just look at games, average Google Play revenue comes to $48 million, compared to iOS App Store revenue of $70 million, in Q1 2019
• If we take games out of the equation, the gap widens considerably, with Google Play’s $7 million totally eclipsed by iOS’s $23 million
• International revenue for Chinese game publishers increased by 109% between 2016 and 2018, with EMEA generating $1.4 billion, AMER $1.8 billion, and APAC $2.9 billion
• Two-thirds of app developers reported that generating revenue through the app store was their top goal for their app, in a 2017 App Annie survey
• In-app purchases (50%), paid downloads (50%), and in-app advertising (49%) were the most common actually used app monetisation strategies for non-game apps
• For games, in-app advertising (81%) just edges out in-app purchases (79%)
• An AdColony survey (also 2017) found that 76% of app revenue was generated through video ads, display ads, and native ads; rewarded video ads were considered to be the most successful (75%)
• App Annie reports that 36% of developers believed video ads generated more revenue than any other form of in-app advertising, though 34% believed it had a significant negative impact on user experience
• The subscription app engagement rate increased from 2.5% to 3.3% between September 2017 and August 2018, according to Leanplum/Liftoff – a 32% increase
• In the App Annie survey, 71% of respondents reported using a freemium model for games, compared for 52% for non-game apps
• Limiting functionality was the most-common freemium model used, with 75% of respondents saying they’d used this model for games, and 54% for non-game apps
• Average in-app spend in the US stood at $79 in 2018 – 36% up on 2017; $44 of this is on gaming
• eMarketer predict that total global digital ad spending will come to $333.25 billion in 2019, and $517.51 billion by 2023
• Mobile ad spend figures published on Statista predict ad spend of $188 billion this year, increasing to $250 billion by 2021
• Sapio research reported in October 2018 that 77% of brands are planning to invest in in-app advertising; foreseeing an improvement in campaign ROI of 41%
• A February 2019 study from PubMatic found that 56% of media buyers believed in-app advertising delivered better audience targeting than other forms of advertising, with 54% saying they saw better customer engagement
• 45% of these buyers’ ad spend went on mobile advertising, evenly divided between in-app and web placements; 52% said ad-fraud was their biggest concern related to in-app advertising

App Revenue Statistics

Total 2018 app revenue of $71.3 billion across the iOS App Store and Google Play Store represents a not inconsiderable 22.7% increase over 2017 app revenue (Sensor Tower app revenue stats).

While Google Play may dominate app download statistics, it is clear that the iOS App Store is the place to be for app revenue. This is no doubt due to the Apple’s strong presence in high-revenue markets, such as the US and Japan. Google on the other hand dominates in emerging markets – great for download numbers but less so for app revenues – as it currently stands.

That “as it stands” is key; in the medium-term, it may be that it is no longer the case. Sensor Tower app revenue statistics show that Google Play revenue increased by a greater percentage between 2017 and 2018: 27.3% to the App Store’s 20.4% (the latter represents a considerable slowdown, with growth between 2016 and 2017 standing at 34.7%).

That said, the $46.6 billion is app revenue raised through the App Store, according to these app revenue statistics, is still not too far off being double Google Play’s $24.8 billon 2018 revenue.

Worldwide app revenue, 2017 vs. 2018

Source: Sensor Tower

Sensor Tower 2019 app revenue data shows that growth, while robust, seems to be slowing. Total app revenue for H1 2019 is up 15.4% as compared to the first half of 2018. The total as of the end of June stood at $39.7 billion.

Google Play revenue continues to increase at a greater level than iOS App Store revenue: 19.6% to 13.2%.

Worldwide app revenue, H1 2018 vs. H1 2019

Source: Sensor Tower

App Annie 2018 app revenue stats show a higher total than Sensor Tower, at $101 billion – though we cannot make a direct comparison, as the App Annie stats also include third-party Chinese Android revenue (the Google Play Store is blocked).

Chinese revenue accounts for no small proportion of total spend; no less than 40%. So, in fact, the like-for-like total might even be lower than Sensor Tower’s (if we assume the bulk of Chinese app revenue is generated through third-party Android devices).

Nonetheless, we’ve seen 75% growth in app-spending since 2016 (paid downloads, in-app purchases, and in-app subscriptions; advertising revenue and non-app store transactions, such as Uber fares, are excluded).

This growth was spearheaded (of course) by China, with 140% growth to extend an already considerable lead. At close to $40 billion in app revenue in 2018, it reports nearly double the US’s figure of $20 billion. US growth also stood at half the Chinese level, though South Korea is the only other of the top-five nations to exceed this US growth level (80% to 70%).

Japan, in third, shows signs of saturation, with a relatively paltry 30% growth, though it remains well out ahead of South Korea and UK (55% growth).

2018 app revenue: global growth and top countries 

Source: App Annie

Games account for the greatest proportion of app revenue. App Annie separate out non-gaming app revenue stats to help us get a picture of this segment of the app industry. We have seen fantastic growth in non-gaming revenue over the last decade.  In 2013, non-game apps were bringing in a relatively paltry $3.7 billion in revenue (iOS App Store and Google Play Store combined). By 2018, this had increased more than fivefold, to $19.7 billion. If nothing else, this serves as a reminder of just how young the app industry actually is.

App Annie also single out the top non-game apps by revenue for each of the six years covered by the analysis. This visualisation allows us to see Netflix and Tinder climbing up the ranking to eventually take and hold the top spots, while Tencent Video jumps straight into third behind them in 2017.

LINE, the number one non-gaming app by revenue in 2013 and 2014, was finally muscled out of the top-two in 2017, and then out of the top-five in 2018. Pandora Music – another mainstay – actually crept back into the top five after being temporarily muscled out in 2016. Pandora is the only app to feature in the top-five apps by revenue in both 2013 and 2018.

LINE’s dropping out of the top-five apps by revenue also means that for the first time (at least since 2013) the entire top five apps utilised in-app subscription payments to generate revenue. Well, they did…Netflix has moved to discontinue this method of revenue generation. Would-be subscribers will be required to sign up elsewhere…

Non-game app revenue and top apps by revenue, 2013-2018

Source: App Annie

App Annie estimates that this will increase by $75 billion by 2022, powered by in-app subscriptions.

Forecasted app industry revenue growth

App Annie predicts, based on a predicted compound annual growth rate of 29%, derived from actual app revenue growth from 2016 to 2018, that total app revenue for 2019 will exceed $120 billion. Mobile gaming will continue to be the primary driver of growth

This CAGR, notes App Annie, is five times greater than that of the global economy.

App revenue predictions, 2019

Source: App Annie

Sensor Tower predicts that between 2018 and 2023, the app industry will see a CAGR of 16.8%. This would mean that, by 2023, we could see revenue levels at more than twice the levels reported in 2018: $156 billion, to 2018’s $72 billion.

While iOS App Store revenue will still be well in excess of Google Play ($96 billion to $60 billion), the gap between the two will be proportionally much smaller, in line with current trends…

App revenue forecast, 2018-2023

Source: Sensor Tower

Asia-Pacific will remain the most-lucrative iOS App Store region, predicts Sensor Tower, though will see the lowest levels of growth between now and 2019. The highest level of growth will be reported by Africa, at close to 300%.

Latin America is not far behind, at 239% growth, overtaking Oceania to generate $2.4 billion for the app industry. Europe’s 150% growth in revenue is also notable, leading the way for mature markets.

iOS App Store revenue forecast, 2018-2023, by region

Source: Sensor Tower

European Google Play revenue is predicted to grow by nearly 200%, again leading the mature markets, while Asian app revenue growth will slow somewhat – though not to the extent that its status as the biggest revenue source for the app industry is under the slightest threat (you’re going to read this a lot, but we must recall that these figures do not include China, where the Google Play Store does not feature).

Interestingly, according to these app revenue predictions, by 2023 over 50% of European app revenue will be generated through Google Play. The same will apply in Latin America (and Africa), where world-leading growth will take total app revenue to $2.8 billion.

Google Play Store revenue forecast, 2018-2023, by region

Source: Sensor Tower

Top apps by revenue

Sensor Tower app revenue statistics also show that Netflix was the highest grossing non-game app of 2018 worldwide, generating in $964 million in total. It was also the top iOS app by revenue across 2018, though only came sixth in the Google Play ranking. See below for more 2018 app revenue statistics on Netflix.

We might note, however, that for those looking to generate the most-possible app revenue, iOS is far more important for the time being. As mentioned above, Netflix has removed the ability to actually sign up to its service through the App Store, which will see the proportion of this revenue that actually makes it back to Netflix increase, by virtue of freeing itself from the 15% tithe demanded by Apple (part of special deal for Netflix, circumventing the usual 30% customarily required for the first year). Just how much this is worth is reflected by the heavy losses suffered by Apple after this decision was taken.

Indeed, Sensor Tower app revenue data reveals that Netflix generated $399 million in revenue through the two major app stores in H1 2019.

Tinder was the top-ranking app in terms of 2018 Google Play Store revenue. It also came in third in terms of 2018 iOS App Store revenue, giving it an overall ranking of second. According to Sensor Tower app revenue statistics, Tinder overtook Netflix in the first half of 2019 (to be expected, given the decision taken by Netflix), with revenue of $497 million.

Tencent Video comes in third place overall, by virtue of its generation of more iOS App Store revenue in 2018 than any other app bar Netflix. The app enjoys something of a captive market in China due to YouTube’s being banned in the country.

Baidu’s iQIYi and Tencent’s Kwai also feature in the top-five of the iOS App Store revenue ranking – and, consequently, the top-six of the overall 2018 app revenue table.

We might note here that Android app downloads in China are third party rather than going through the Google Play Store – which is why we do not see any Chinese apps featuring in the Google Play app revenue ranking. It is likely that these apps would rank higher in the overall table if Android revenue was also taken into account – particularly Tencent Video.

The other potentially interesting inclusion (for those outside the US at least) is Pandora: third in Google Play revenue, seventh in App Store revenue, and fifth overall. We usually see Pandora discussed in terms of decline, or being negatively compared to Spotify or Netflix. Here we see, that in terms of app revenue, the US-focused music streaming app is still a major player.

Top apps by revenue, 2018 (excluding games)                                                                                                           

Source: Sensor Tower

By way of snapshot, below we can see the apps that generated the most revenue in June 2019 on Google Play.

Candy Crush Saga leads the way, with over $41 million revenue. The list is mostly games. Tinder, on $21 million, is the leading non-game app, with the Pandora the only other non-game.

Top Google Apps by revenue, June 2019

Source: Statista

Netflix US app revenue 2018

Netflix was the top earning non-game app in the US over 2018, with revenue in excess of $40 million over eight separate months. Sensor Tower reports that only Candy Crush Saga reported higher combined App Store/Google Play revenue (a formulation which excludes Fortnite – not available through the Play Store – by definition).

The graphic below allows us to see the aggressive growth of Netflix app revenue over the past few years. Back in early 2016 there wasn’t much daylight between Netflix, YouTube, HBO Now, and Hulu. By the end of the year, Netflix had built up a nearly unassailable lead.

Bar a spike in HBO Now revenue in the summer of 2017, it has remained unchallenged since. Indeed, HBO Now’s fortunes have declined since, leaving it battling it out with Hulu for last place in this big four.

The only credible threat would now be from YouTube, though the latter’s free-to-use nature is an impediment to this (it’s unclear to which YouTube revenue Sensor tower is referring here – surely not ad revenue, which is pegged as being much higher).

Netflix US app revenue, 2016-2018

Source: Sensor Tower</>

Mobile Game Revenue Statistics

Total 2018 mobile game revenue for the iOS App Store and Google Play Store stood at $54.7 billion, representing 15.2% growth compared to 2017, according to Sensor Tower app revenue data.

Once again, iOS App Store 2018 revenue, at $33.2 billion is significantly higher than Google Play revenue of $21.5 billion. We might note, however, that Google Play revenue derived from mobile games in 2018 increased by a stately 24.2% as compared with 2017. iOS App Store revenue increased by 10% over the same period.

Mobile games account for 77% of total 2018 app revenue – this is a decrease on 2017, where the equivalent figure was 82%. This could be down to a number of factors. Sensor Tower posits that it is down to improved efforts to monetise non-gaming apps. App Annie, by the way, sets the figure at 74%.

It may indeed be that the idea of spending through and on apps has become increasingly normalised as they come to occupy an increasingly prominent part in our everyday lives. Games enjoyed a head start in this regard, having long required users to part with cash in exchange for cartridges and discs.

We might also note that, according to some analyses, high levels of mobile game downloads are a hallmark of immature markets. Perhaps increasing maturity in several international markets has seen attention – and money – diverted somewhat from gaming to general apps.

Worldwide mobile game revenue, 2017 vs. 2018

Source: Sensor Tower

Unsurprisingly, given their role as the engine room of app revenue, we are seeing also seeing a slowdown in growth in mobile game revenue derived from the two biggest app stores, in line with the overall slowdown. Total revenue growth stood at 11.3% in the first half of 2019, as compared with the first half of 2018, coming to a total of $29.6 billion.

Growth in Google Play Store game revenue once again greatly eclipses iOS App Store revenue growth. Indeed, at 16.8% it remains over twice the iOS figure of 7.8%. Actual revenue figures for the latter, however, remain considerably greater at $17.6 billion, compared to Google Play’s $12 billion.

Worldwide mobile game revenue, h1 2018 vs. h1 2019

Source: Sensor Tower

Newzoo estimates are a bit more generous, with 2018 mobile game revenue set at $62.2 billion.

Mobile game revenue by market

App Annie app revenue data shows us to what extend mobile game revenue has grown in the past two years in a range of selected key markets. As is the dominant theme in App Annie’s annual report, China is not only the biggest market by far, but also has seen the greatest level of growth over the years in question, reporting a 105% increase in mobile game revenue between 2016 and 2018 – taking the figure well past $25 billion.

This compares to 45% for newly second-place US, and 25% for third-place Japan; a level of growth which saw it overtaken by the US in 2018. Japan has clearly reached a point of saturation which seems unique to it alone. Even other mature markets are registering significantly higher levels of growth, albeit from much lower base figure.

South Korea, in fourth, registers 80% growth in mobile game revenue, reflecting the popularity of gaming in the northeast Asian nation. This takes revenue to around the $4 billion mark. India’s 90% growth is bettered only by China, but the level of revenue being generated is so low as to barely register on the scale of this graph.

These figures incorporate iOS App Store and Google Play revenue alongside the third-party Google revenue that is essential to get any sort of handle of the true scale of the Chinese market.

Mobile game revenue growth in selected markets, 2016-2018

Source: App Annie

In 2019, the US and China alone will account for 48% of total game spending (all platforms – mobile gaming will account for 45% by Newzoo’s estimation, on which more below), Newzoo predicts. The US, with spending of $36.9 billion, just about edges out China’s figure of $36.2 billion.

North America will also see the highest level of growth, at 11.7%, just beating EMEA’s 11.5%.

The Asia-Pacific region, however, will continue to completely dominate spending, accounting for 47% of games revenue, with a value of $72.2 billion.

Game industry revenue by region, 2019

Source: Newzoo

Behind the US and China, the new biggest markets are those two northeast Asian gaming giants, Japan and South Korea. Japan is in a league of its own, at around half of level of the front runners, while Korea’s $6.2 billion puts it closer to the chasing pack.

The rest of the top-10 is North American and Western European.

Top gaming markets by revenue, 2019

Source: Newzoo

Mobile game revenue vs. other game revenue

App Annie predicts that spending on mobile games will account for 60% of total gaming spend in 2019 – up from 35% in 2013.

Mobile gaming spend overtook other gaming over the course of 2016, with the gap continuing to widen .

Mobile game revenue vs. other game revenue, 2013-2019

Source: App Annie

Newzoo is a bit more conservative in its estimates, predicting that mobile games will account for 45% of total gaming revenue over 2019.

Newzoo also breaks down smartphone and tablet predictions, with the ratio at 4:1 in favour of smartphones. Smartphones will also see greater growth, according to this analysis, increasing by around 12%, while tablet game revenue will increase by 5% – reflecting the limitations of the tablet format in terms of mass appeal.

Mobile game revenue vs. other game revenue, 2019

Source: Newzoo

Newzoo forecasts that total games industry revenue will increase by a CAGR of 9% over the next four years. Mobile will gradually come to account for a greater and greater share of games revenue, reaching 49% in 2022. Growth will principally be driven by emerging markets.

Mobile game revenue will stand at $95.4 billion at this stage, according to this analysis.

Game industry revenue, 2018-2022

Source: Newzoo

Top mobile games by revenue

The top mobile game by revenue in 2018 was Tencent’s Arena of Valor, which also topped the iOS App Store revenue ranking. The game is so big in China (55 million daily players, according to one source), where it goes by the name Honour of Kings, that Tencent is planning to pull the plug on the international edition with its 250,000 users to focus on League of Legends.

Its topping of the list is even more impressive when you consider that the figure does not include Android revenue in China (which will not come through the Play Store). It retained its lead over the first half of 2019, bringing in $728 million in app revenue.

Westward Journey – also big in China – comes in third in the iOS game revenue ranking and sixth overall. It seems safe to say if we were looking at overall Android data and not just that generated through Google Play these Chinese titles might be even more prominent than they already are…

Mixi’s Monster Strike comes in at second in terms of 2018 App Store and Google Play revenue – and resultantly, it posts the second-highest overall mobile game revenue of the year. It is the only title to appear in all three top-threes.

South Korea-developed Lineage M tops the Google Play 2018 game revenue ranking – reflecting the power of the South Korean market as well as the accomplishment of the country’s developers. Fate/Grand Order rounds out the top threes, featuring in the overall and Google Play ranking.

The last-mentioned climbed into second place over the first half of 2019, by virtue of a reported $628 million revenue – which is enough to put it well ahead of the $566 million generated by Monster Strike.

We might note that Northeast Asian titles dominate the very upper echelons of these 2018 mobile game revenue rankings. Candy Crush Saga is the highest-ranking European title by revenue, while a resurgent Pokémon GO generates more revenue than any other US release.

Despite its high profile, Fornite revenue is only sufficient to bring it up to seventh in the global iOS App Store revenue ranking. It does lead the way in the US (see below). We might note as well that it is not available through the Google Play Store – which Epic Games has circumvented in order to prevent Google from taking a cut of Fortnite Revenue. This is, of course, not an option in Apple’s more tightly controlled ecosystem.

The freemium model is very much predominant in mobile game revenue generation. Given the figures being commanded, it’s obviously one that works.

Top mobile games by revenue, 2018                                                                                                                               

Source: Sensor Tower

Fortnite revenue

Fortnite was the top game in the US in terms of iOS revenue in 2018. Total 2018 Fortnite US iOS revenue came to $450 million. $40 million of this was generated in December alone. This is particularly impressive if we reflect that Fortnite’s revenue model is based mostly on in-app purchases of costumes and celebratory dances.

Remember, this app revenue data pertains to a single market and OS – this figure would certainly be much higher if Sensor Tower had recourse to third-party Fortnite revenue also.

Fortnite iOS revenue 2018 (US)                                     

Source: Sensor Tower

This 2018 Fornite revenue figure is one of the all-time highest in terms of US iOS revenue. Only Clash of Clans in 2014 and 2015, and Game of War in 2015 generated more iOS revenue in the US in a single year. Candy Crush Saga 2018 iOS revenue puts it in fifth place, just behind Fortnite.

Since 2014, five games have generated more than $200 million in US iOS revenue. The four aforementioned and Mobile Strike. Clash of Clans is the only game to have exceeded $400 million.

Top-grossing games, iOS revenue 2014-2018 (US)

Source: Sensor Tower</>

App Revenue by Category

Retail app revenue

Alibaba’s ‘Singles Day’ 2018 – a day of sales across Alibaba’s platforms, in the vein of Black Friday or Amazon Prime Day – saw the generation of $30.8 billion worth of revenue over 24 hours. The annual event, which takes place on November 11, smashed the previous year’s record of $25.3 billion.

$1 billion worth of sales took place in the first 85 seconds of the day, with the $10 billion mark taking just over an hour.

Video app revenue

Video apps are another big growth area in terms of revenue. Looking at growth in consumer spend (so certainly not absolute figures) India leads the way, reporting close to 600% revenue growth between 2016 and 2018 (all figures iOS App Store and Google Play, and pertain to the top-five video apps in each market).

The status of T-Series as the most-subscribed and most-viewed YouTube channel, as well as the numerous other Indian music-focused channels in those respective rankings, reflect how popular short videos (particularly music) are in the market. While absolute figures may be relatively low, growth at this level will eventually see a bridging of the gap…

We also see significant growth in mature markets, led (unusually) by France with growth well over 500% – Netflix, no doubt, has played its part. South Korea in third place, at a little below 400%, seems to generally be in phase of high growth, despite its maturity – perhaps the effects of a general digitisation of everyday life?

China manages to come in fourth, despite these figures being iOS only. As ever, we can only get a true picture of the Chinese app landscape (even in terms of relative growth) if we take into third-party Android downloads, as this is where the vast majority of the action happens in the world’s most-populous country (that said it could well see average figure revised downwards, if iOS users are bigger spenders, as users of the ‘premium’ platform).

Other interesting takeaways: despite some years of strong growth, Brazil seems to slowing down relative to other markets, showing that maturity is not always reached in a straight line (we are still looking at 200% revenue growth over two years…).

The US finishes bottom out of these selected markets; there’s clearly only so much more revenue that can be squeezed out of this high-spending market.

Video app revenue growth in selected markets, 2016-2018

Source: App Annie

Taking a wider view of entertainment apps, App Annie predicts that between 2016 and 2019 we will see an incredible 460% growth in app revenue. The predicted 2019 figure is in excess of $6 billion.

This excludes Chinese third-party app revenue. The real figure will, therefore, be even higher.

Entertainment app revenue growth 2016-2018

Source: App Annie

Video is not the only growth area. As we might note from the presence of Tinder in the highest-app revenue charts, only held off the top spot by Netflix, the last few years have seen significant revenue generation for dating apps.

Between 2016 and 2018 we saw a 190% increase in dating app revenue. Tinder leads the way, followed by Bumble which took off in revenue terms in 2017. Bumble’s strong performance shows us that there’s still room for innovation in this space.

That said, we still see long-established big players in the upper echelons of revenue generation, the likes of Match.com, Badoo, and – making an appearance after a few years out of the top-10 in 2018 – Grindr

As well as the international big hitters, we see a few more localised apps, particularly in Northeast Asia: Momo and Pairs from Japan, and Momo from China:

As ever, Momo (and other Chinese dating apps, such as Tantan), would almost certainly register higher up the pecking order if we had access to third-party app revenue figures, as opposed to the Google Play and iOS App Store figures to which we are limited here…

Dating app revenue growth, 2016-2018

Source: App Annie

Health & fitness apps also saw a surge in app spending between 2016 and 2018, led by China, where growth is close to 320%.

The China figure is iOS only, which certainly could play a part. If we’re talking about growth rather than absolute figures, it could well drag the average up if, as is quite conceivable, Apple owners have upped their spending on health & fitness apps more than the national average…

Here we see one area at least where app users in the US are willing to spend more money, with a rare second-place in terms of revenue growth, followed by Canada, Japan, and the UK. This is interesting, as it shows us that while overall growth may be slowing in mature markets, this does not mean a blanket slowdown, but rather shifts in spending habits.

Clearly growth in health & fitness app revenue is something of a bellwether, signifying late stage maturity. This applies to China too, as iOS users are more likely to be denizens of tier-1 cities, in which we’ve reached a level of app maturity comparable to other leading global markets (it’s a different story in tier-2 cities).

Health & fitness app revenue growth, 2016-2018

Source: App Annie</>

App Developer Revenue Statistics

Chinese super-developer Tencent tops the list for 2018 app revenues – no doubt helped by its operation in both the spheres of gaming and non-gaming apps. Gaming as we know brings in serious money, while WeChat and QQ give Tencent unparalleled reach in China.

In terms of non-game app revenue, however, it is kept of the top spot by dating app-developer IAC and Netflix – showing the tremendous revenue potential in the concept of Netflix and chill…

The prominence of mobile games in terms of app revenue generation is made explicit here, with the overall top mobile developers 2018 app revenue ranking nearly perfectly matching that of game developers. This also represents the dominance of a relatively small number of players in the games market, compared the more diverse non-game app market (the presence of long-standing console gaming and action figure powerhouse Bandai Namco is one the clearest representations of the strength of the status quo).

The exception is Naver. The diverse South Korean tech conglomerate, initially known for search, launched as Line in Japan, where it dominates the messenger app space. It claims seventh place in the overall app developer 2018 revenue ranking, despite only claiming fifth place in the non-games space and falling outside the top-10 game developers by 2018 revenue (though the developer of Japan’s most-downloaded mobile game, Disney Tsum Tsum can’t be too far off).

Clearly the combination of these two, however, is sufficient for it to muscle into the overall top-10 app developers by 2018 revenue.

Top app developers by revenue, 2018

Source: Sensor Tower

Just how much app revenue do top publishers generate? To coincide with app revenue figures for the first quarter of 2019, Sensor Tower took a long view of average app revenue for the top-100 earning app publishers in the first quarter of every year since 2014.

Over this period, average revenue for both the Google Play Store and iOS App Store grew at a CAGR of around 31%. The combined average stood at $135 million, of which $84 million was iOS revenue, and $51 million Android.

Average Q1 app revenue for top-100 app publishers, 2014-2019

Source: Sensor Tower

If we take games out of the equation, then the gap between iOS and Android revenue widens considerably, with $7 million of Android revenue completely eclipsed by iOS’s $23 million. Historically, this has always been the case it seems. There is little sign that it is going to change soon.

Clearly, iOS app users are more ready to part with money to use non-game apps. We don’t, however, know how much Chinese Android users spend, with their spending not coming through the Play Store. This would certainly narrow the gap between the two somewhat.

Average Q1 non-game app revenue for top-100 app publishers, 2014-2019

Source: Sensor Tower

If we just look at games, we see the gap at its narrowest in percentage terms, with Google Play revenue at $48 million, compared to iOS App Store revenue of $70 million.

Google Play’s relative strength in gaming may reflect its popularity in less-mature markets, in which gaming apps tend to be more prominent.

We might note here that app gaming revenue has grown at a slower rate than the overall rate, with non-game apps, though much smaller, increasingly powering revenue growth.

Average Q1 game revenue for top-100 app publishers, 2014-2018

Source: Sensor Tower

Chinese game developer app revenue

China has long had a reputation as an exporter. This reputation, reveals App Annie, now has a new facet: mobile games. Revenue coming from non-Chinese markets for Chinese mobile game publishers more than doubled between 2016 and 2018.

Interestingly, the greatest level of growth comes from the Americas, with a 140% increase in incoming revenue, to take total revenue for Chinese game publishers to $1.8 billion for this region. Given that the US (which will, no doubt, account for the bulk of this revenue) has shown many signs of a slowdown in app growth, it is certainly noteworthy that, in this particular niche, it continues to drive world-leading growth levels.

Asia, however, remains far and away, the biggest source of revenue for exporting Chinese game publishers. It accounts for more or less the same share of global revenue (48%) in 2018 as in 2016.

International markets are of increasing importance to Chinese mobile game developers, with a current game freeze meaning that new titles and new developers cannot enter the domestic market. The freeze also hurts international developers trying to enter the Chinese market. Fortnite, for instance, has not managed to launch in China, despite being scheduled to in 2018.

Chinese game publisher revenue from international markets

Source: App Annie</>

App Monetisation Statistics

In 2017, App Annie carried out a survey asking professionals various questions around app monetisation.

Earning revenue through the app store (in-app purchases or paid downloads) was by some way the most-commonly elected option when these app industry professionals were asked about their goals for their apps. Nearly two thirds stated this goal; compared to 47% who were interested in generating revenue from in-app advertising or building customer loyalty and retention.

Developers’ app goals

Source: App Annie

When asked about which app monetisation strategies they actually use or used previously, in-app purchases came in joint first with paid downloads, at 50% a piece, for non-game apps. In-app advertising nearly makes it a three-way tie, with 49% of respondents using this app monetisation model for non-game apps

Turing the tables, the latter edges out in-app purchases when it comes to games (81% to 79%). These two strategies are well out in front of any other. Slightly more respondents reported using paid downloads for games than non-game apps.

19% of app professionals said they’d used a subscription model for non-game apps.

App monetisation strategies used

Source: App Annie

Another set of 2017 app revenue stats from AdColony, based on a study of app industry professions, also broke down monetisation strategies for games and non-game apps. Here we see that ads dominate non-game ads, with video ads, display ads, and native ads together accounting for no-less than 76% of app revenue.

For games, ads still account for a little over half, but the biggest single driver of revenue is in-app purchases and mCommerce.

Games vs. apps monetisation strategies

Source: AdColony via Forbes

When asked which they considered to be the effective app monetisation strategies, rewarded video ads came out ahead (this chimes with findings in the App Annie study – see below), at 75%. This was followed by in-app purchases on 63% and interstitial video ads.

Notably paid subscriptions came pretty low, at a mere 14%.

Most-effective app monetisation strategies

Source: AdColony via Forbes

We’ll look at freemium models and in-app purchase stats a little further below, but first a stat from Leanplum and Liftoff looking at subscription app engagement. Between September 2017 and August 2018, we saw a 32% increase year-on-year, take the total engagement rate from 2.5% to 3.3%. This model is clearly becoming more and more prevalent, with the likes of Spotify and Netflix leading the way.

Engagement rate by this measure looks at how many go on to subscribe after installing the app.

App subscription engagement rate

Source: Business Insider

Freemium models

In-app purchases, of course, are often part of a freemium pricing model. As any observer of the app industry will know, this is particularly prevalent in the gaming sector. Indeed, 71% of respondents here had used a freemium model for games, compared for 52% for non-game apps.

Freemium models, by this reckoning, include time-limited free trials of the Netflix ilk.

Freemium models: Games vs. apps

Source: App Annie

The most-commonly used freemium model for both games and non-game apps is limiting functionality, with 75% of respondents saying they’d used this model for games, and 54% for non-game apps.

Over 50% said they’d used a user experience-based freemium model for games, after which point other options seem far less popular.

For non-game app developers we see a wider spread of freemium models, albeit at a lower lever, with user experience (33%) a little way ahead of a combination (25%), usage (25%), and free trial (24%).

Popularity of freemium models

Source: App Annie

Just over half of respondents to App Annie’s survey reported that 5% or fewer of freemium app users made one in-app purchase per month. On the other hand, a very small percentage of mobile game users were found to drive high levels of revenues. Such users are termed ‘whales’.

We might note that this survey dates back to 2017; since then an upward revision will necessary. The likes of Fortnite – in which 70% of players have made in-app purchases – have certainly played their part in bringing in-app purchases more into the mainstream.

MAUs making monthly in-app purchases

Source: App Annie

Indeed, if we look to US iOS users (a notedly high-spending and mature constituency), we can see how average in-app spending has been creeping up over the past few years. 2018’s average spending level of $79 represent a 36% increase on 2017.

US iOS in-app spending 2015-2018

Source: Sensor Tower

Gaming, as we hinted above, dominates – accounting for $44 of this total. While the increase in gaming spend stands at 22% compared to entertainment’s 82%, the latter accounts for a mere $8 of spend for the average US iOS user.

US iOS in-app spending by category 2017-2018

Source: Sensor Tower

It’s not just the US or games, however. Tencent’s Game for Peace­ brought in $14 million in the Chinese iOS App Store within 72 hours. And TikTok had brought in $75 worth of revenue, as of March 2019.

In-app advertising

eMarketer predict that total global digital ad spending will come to $333.25 billion in 2019. While spend will continue to grow over the next years, reaching $517.51 billion by 2023, the rate of growth for digital ad spend will gradually slow as the numbers get bigger.

We’ll also see digital ad spend coming to account for a greater and greater proportion of total advertising spend. Indeed, if eMarketer’s predictions are borne out, we’ll see digital ad spend account for over half of total ad spend for the first time this year.

Note that these figures include desktop and laptop advertising as well as in-app figures.

Forecasted total digital ad spending

Source: eMarketer

Unsurprisingly, Google is pegged as the biggest seller of digital ads, selling a predicted $104 billion of ads. Second-place Facebook can only manage around two-thirds of that.

Alibaba leads the way for non-US companies (well, we should just say Chinese, because no other country is represented beyond the world’s two biggest economies), outdoing local competitor Tencent by some distance.

We might note that, at nearly $3 billion, Twitter may not compete with the biggest figures here, but still is included in the top-10 biggest global digital ad sellers.

The same caveat applies – this includes desktop figures as well.

Biggest sellers of digital ad revenues

Source: eMarketer

Nearly three quarters of media buyers favour programmatic in-app ads, citing customer targeting and engagement, according to the above-mentioned PubMatic survey.

Tightening the focus a little to mobile advertising spending, mobile ad spend figures published on Statista predict we’ll see mobile ad spend of $188 billion this year, increasing to $250 billion by 2021. This is somewhat conservative in comparison with the eMarketer stats, which set a prediction of $480 billion digital ad spend by the same year.

This graphic also lets us see the huge increase in mobile ad spending in the past decade. Indeed, we might note that the 2019 estimate is a little more than 1,000 times greater than the 2007 figure.

Mobile ad spending, 2007-2019

Source: Statista

And in an even closer tightening of the focus, ad-monetisation enterprise Fyber reported in October 2018 that a commissioned survey (conducted by Sapio Research) showed 77% of brands are planning to invest in in-app advertising. These same brands believed that such ads can improve campaign ROI by 41%.

A February 2019 study from PubMatic, showed that 56% of media buyers believed in-app advertising saw better audience targeting, while 54% said they saw better customer engagement. These buyers were allocating 45% of spend to mobile platforms, evenly divided between in-app and web placements. 52% said ad-fraud was their biggest concern related to in-app advertising.

We see an interesting phenomenon arising in connection with in-app advertising in the App Annie report. A greater proportion respondent base report that video ads generate the most revenue than any other form of in-app advertising. 34% of respondents, however, say that such ads have a significant negative impact on user experience – a figure only exceeded by those who say that static full screen ads have such an impact (43%).

On the revenue generation side, no other option really comes close to video ads, with second-placed static banner ads only chosen by 22% of respondents when asked to identify the most-lucrative form of in-app advertising.

The least offensive form of in-app advertising in terms of user experience, in the view of app developers, is native ads, which only 10% believe have a significant negative impact on user experience.

If we include those who think certain forms of advertising have a minor as well as a significant negative impact, video ads actually come off second best, after native ads. At the other end of the scale, rich media ads come off second-worst after static full screen ads (the third-most commonly chosen option in terms of revenue generation).

In app ad formats: revenue vs. impact on user experience 

Source: App Annie

To sell in-app inventory, it seems the most popular option with both games and non-game apps by some way is ad networks.

Mediation platforms are second for both, though considerably more popular for games, while twice as many respondents say they sell direct to advertisers for apps excluding games than do for games.

Which ad channels do developers use?

Source: App Annie