The app store is one of the fundamental pillars supporting the truly massive smartphone ecosystem that omnipresent everywhere today. It is not only a massive source of revenue, but it is also a major driver in the consumer smartphone investment decision. As one of the two major competing app stores in the world today, the iOS App Store is critical to the well being of both Apple, and the larger smartphone ecosystem as well.
Well, according to a new report by App Annie, the iOS App Store is now raking in record revenues driven by gaming apps, even if app downloads have been gradually stagnating.
According to the report, gross consumer spend on the iOS App Store rose to an all-time high of $42.5 billion in 2017, registering almost 100% growth in only 2 years. From 2011 onward, consumer spending has grown steadily at a very impressive CAGR of 52%.
On the other hand, app download growth has been relatively disappointing. In 2017, the Apple App Store saw 30.5 billion downloads in total, not a huge improvement over the previous year. From 2011 onward, downloads have grown at a more sobering CAGR of 15%.
The lowering app downloads growth rates have a lot to do with the saturation of key markets like North America and Europe.
So the bottom line is – iOS users are not downloading many more apps than before, but they are are definitely spending more.
However, the spending is not distributed evenly across different app types and genres. In fact, games accounted for a massive 75% of all consumer spending in the App Store in 2017! This is even more impressive when you consider that games only about made up 31% of all App Store downloads in 2017. The increased revenue generation prowess of gaming apps can be partly attributed to the rise in purchasing power of users in the APAC region.
The Boom of Gaming Apps on iOS In APAC Region
APAC accounted for nearly 59% of global consumer app spends in 2017, up from only 23% in 2011. Gaming apps are the single largest driver of consumer spending, with nearly 84% of all revenue (iPhone and iPad) from the APAC region being generated from games alone.
Considering that games only make up about 28% of all downloads (iPhone and iPad) in APAC, it is clear that gaming apps are the most profitable for developers in the region. In contrast, in the Americas and EMEA, games accounted for 33% of all downloads but only about 62% of all consumer spending.
It can be said that the rise of mobile gaming has had a direct and positive impact on Apple App Store spend in the APAC region. This idea is also backed up by the top games by download/revenue charts. There is only 1 game made by a Chinese company (Honour of Kings) in the top ten most downloaded games of all time list on the iOS App Store.
However, despite this, there are 5 games by APAC developers in the top 10 games by consumer spend list. There are also 5 APAC companies in the top 10 companies by revenue generated in the games list.
The app ecosystem, app revenue and app downloads clearly portray the promising scenario of the gaming industry in the APAC region. Though the APAC region has a smaller (by proportion), but much more hardcore gaming demographic that is willing to spend more than the global average on popular gaming products.