In-App Purchases Make More Money Than Selling Apps

Here's a slightly depressing statistic for developers: you're far more likely to make money from a free app with optional in-app purchases than by trying to sell your app in the first place.

Figures from app analytics platform Distimo suggest that in November 2013, in-app purchases from "free" apps accounted for 98 per cent of revenue on Google Play, and 92 per cent of revenue on the iTunes app store. That was up from 89 per cent and 77 per cent respectively at the beginning of the year. In-app purchases from paid apps accounted for another 1 per cent on Google Play, and 4 per cent on iTunes.

One thing to note: the study didn't include ad revenues, so the option of offering a free version with ads (and potentially a paid upgrade to remove them) wasn't factored in. Even so, it suggests two things: consumers are becoming resistant to paying for apps, but are still willing to spend within apps, even though that might actually prove more expensive.

In-App Purchases Take Over App Revenues [eMarketer via Business Insider]


Comments

    If you ask me, app developers should do both.

    Offer a one-time paid version that gives you everything, and also offer a free version with in-app purchases. Win win. Those who prefer one or the other can get what they prefer.

    Personally I seem to be in the minority that would rather pay for a game once to get all of the content.

    Last edited 07/01/14 2:34 pm

    If it's a great game like Game of War - I may make more in app purchases than a normal RRP of a pc game for example. I know people who spend a fortune - over a long period - in games like candy crush. For the right game, In app purchases are definately good business model.

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