• Tue. May 28th, 2024

Data.ai: Mobile game app revenue split evenly between ads, IAP

Bynewsmagzines

May 16, 2023
Data.ai: Mobile game app revenue split evenly between ads, IAP

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Data.ai — formerly App Annie — has released a new report the focuses on its new total app revenue metrics. The company’s new total app revenue metric — that combines advertising and in-app spending data — will allow more direct comparisons and context on the $500 billion mobile app economy. Additionally, the report focuses on comparing the performance of mobile games to other kinds of apps.

Overall, advertising revenue drove nearly $2 out of ever $3 spent on mobile apps in 2022 according to Data.ai’s report. Despite changes to user data privacy protections, mobile ad spend grew 14% year-on-year to $336 billion. Of this total, roughly $116 billion of this went towards games, capturing about 35% of mobile app ad spend.

In contrast, games drive about two thirds ($110 billion) of the $167 billion spent on app store purchases. The vast majority of game spending is for one-time in-app purchases. Other apps tend to rely on recurring in-app subscriptions.

As a result, the composition of total app revenue is different for mobile games compared to other apps. The $226 billion of total app revenue for games is roughly evenly split between ad revenue ($116 billion) and app store revenue ($110 billion). On the other hand, mobile ad spending accounted for the majority of revenue in other apps. Consumers spent $275 billion total on other apps, but advertising accounted for $218 billion — or 80% — of total app revenue.

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Diversifying mobile revenue streams

Data.ai’s total app revenue figure helps to highlight how apps are diversifying their revenue models. 65% of the top 20 highest earning apps use a mixed monetization approach that incorporates both ads and in-app purchases. In particular Data.ai points out the growing number of OTT streaming platforms that offer a “basic with ads” tier.

In gaming, there is a distinction between hyper-casual titles and other genres. Hyper-casual games are more likely to earn significant revenue from ad placements than other titles. As a result, Candy Crush Saga was the only game among the top ten apps by total revenue globally.

Similarly, the top five genres by ad spend were hyper-casual, puzzle, simulation, tabletop and match — all of which are relatively casual. Together, these five genres accounted for the majority of all ad revenue for mobile games.

While gaming app revenue is split evenly between ads and IAP, this is only true for the category as a whole. Publishers will need to factor in details like genre and geography to draw more direct comparisons.

Data.ai’s full report — including more data on hypercasual mobile monetization and Q1 2023 insights for total app revenue — is available here.

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