Report: In-app purchases generating record revenue | iLounge News


Report: In-app purchases generating record revenue

In-app purchases generated a record 76 percent of total App Store revenue in the U.S. in February, according to a report from Distimo, a company that tracks app performance and metrics. The new report tracks revenues generated through the App Store, so ad revenue is excluded. At least 90 percent of all Asian market revenue came from in-app purchases, Distimo claims. Despite this, freemium apps were found to generate the least amount of revenue per download — just 93 cents per download based on the top 250 apps in the U.S. App Store, which might suggest that developers are hurting themselves by giving away apps in hopes of subsequent purchases, apart from building larger user bases. Paid iPhone apps without in-app purchases generated an average of $2.25 per download, and paid apps with in-app purchases generate even more revenue. iPad paid apps average $4.04 in revenue per download.

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Who comes up with these conclusions? A special needs otter at the bottom of a well?

$0.93/download when you generate 100X more downloads is TON better than $0.99/download. In fact, it’s a ton better than $9.99/download. This is precisely the entire idea behind the sales model, make the barrier to get people to download your product nil so you can capture as much of your potential paying audience as possible.

Never mind that anyone with eyeballs can see that for the past two-plus years at least half of the top grossing apps are “free”.

Unfortunately, the stereotype of people paying several hundred dollars for high tech devices so they can play free games isn’t far from the truth. Developers are almost forced to go $0/$0.99 if they want downloads, but then have to balance the game such that a IAP ‘coin doubler’ or something similar will grease the wheels to make it flow faster and funner.

You want to see a welfare state, the app store is it. People who don’t mind paying a few dollars to be entertained subsidize the lion’s share of the “customers”.

Posted by Code Monkey on March 29, 2013 at 6:54 PM (CDT)


@Code Monkey,

Maybe I don’t represent the majority, but I much prefer the business model of offering a free but very limited demo, and a full version for a fair price, not just pocket change. A good demo can let me know if I’m actually interested in buying the app, and once I’m past worrying about wasting money on software I won’t like, I’m willing to actually pay something for it. I dislike the “freemium” model because it results in software that’s limited and tedious to use unless you shell out money for partial fixes, and you can end up paying far more that way than just buying the full version outright. I have seen some apps that look appealing to me, but due to their new business model, I’m not interested.

It seems a very unhealthy state of affairs how much mobile software has been devalued, and rather sad that developers are seemingly having to invent ways of tricking people into paying for it.

Posted by Jerome on April 2, 2013 at 12:06 AM (CDT)

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