There are literally millions of apps available from the various app stores on the market today – Apple, Google Play, the Intel AppUp® Store, Amazon, etc., with 700,000 available alone between Google Play and Apple. However, a surprisingly low number of these apps actually bring in any kind of significant revenue for the people who have created them.
In a study released this week from research firm Canalys, it was found that from November 1 to November 20, $120 million dollars in total revenue was generated from both paid app downloads and in-app purchasse. However, that money went primarily to 25 top grossing developers, with everyone else on the long tail picking up the crumbs.
All of the top 25 save one are game developers, including Zynga, Disney, Rovio, Kabam, Glu, Gameloft, and Electronic Arts. 145 out of the top 300 apps in the Apple Store are games, and 116 out of the top 300 apps on Google Play are also games. The only non-game app on the top list was Pandora, a streaming radio app that offers a premium subscription for 3.99 via in-app purchasing.
More than one app
Most of the top earners on that top 25 list don’t have just one iron in the fire. They offer several different games in several different stores, thereby gaining more market share and making their reputation stronger; building a franchise, if you will. For example, how many versions of Angry Birds are you currently carrying on your smartphone, tablet, and PC (to my surprise/embarrassment, I have four)? That’s an example of branding done right: there’s Angry Birds Seasons, Angry Birds Classic, even the phenomenal Angry Birds Star Wars. Plus, don’t forget the spin-offs: Bad Piggies, Angry Eagle, etc. Here’s what Canalys had to say about multiple games across platforms:
“Part of the story here is that successful game developers almost invariably have multiple titles generating revenue,’ said Canalys VP and Principal Analyst Chris Jones. ‘Zynga, for example, had 15 titles in the list of top 300 grossing iPhone apps on average in Apple’s App Store every day, and nine titles in the equivalent list in the Google Play store. Even with its singular focus on its Angry Birds franchise, Rovio has multiple game variants in the list.” - Source
It might be a bit discouraging to developers with limited resources to read about hundreds of apps from one studio flooding the market. However, there’s also a good takeaway here: obviously, a branded family of apps makes a bigger splash than just one standalone, and while games definitely are dominating the market, there’s still room for other kinds of apps that aren’t necessarily play-focused.
In addition, this is admittedly a very small window of recovered data, only measuring revenue from 20 days in November 2012 – so it should be taken with a large grain of salt. However, it does give us insight into what is working (and what might not be working) within app stores.
Specific app store stats
According to App Annie, an app analytics firm that released reports coinciding with the Canalys report this week, apps in the Google Play store have tripled their revenue over 2011, growing 311 percent from January to October of 2012. For the Google Play store, Japan is first in generating revenue, growing by ten times over since January 2012.
When you consider that the Apple store app revenue is measured at an average of four times that, the money starts to become almost make-believe. Free downloads account for most of this growth, and those grew by 48 percent.
These statistics are from a study of 150,000 apps that subscribe to App Annie’s analytics services tracing sales and downloads in hundreds of different countries across the globe. Games are the number one sellers in both the Apple Store and Google Play.
The issue of discoverability
Discoverability continues to be the biggest problem facing developers when getting their apps to market. There are just so many apps, and there’s not really an intuitive structure in place within app stores to help users find the apps that aren’t on curated top ten lists. Why are these top 25 developers so incredibly successful? There are a couple reasons:
- Tie-ins to other games make it easy for users to download “just one more”
- Games are traditionally the top grossing downloads in any vertical, not just apps
- Multiple titles across categories, app stores, and platforms make it easy for users to discover them
- Branded family of games (like the afore-mentioned Angry Birds) naturally promote each other
- Consumers seem to be more willing to pay more with in-app purchases in order to level up, buy special privileges, or get past a difficult play stage
Until app stores improve internal discoverability and make it easier for users to find the apps that will suit their needs, it’s going to be up to the developer to make sure that they are discovered. The biggest obstacle facing developers isn’t necessarily coming up with an idea, building a prototype, and then getting the app to market; rather, it’s simply making the user aware of what is available:
“Discoverability is a particular issue in the Apple App Store and in Google Play given the huge inventories they boast,” Canalys senior analyst Tim Shepherd said in the report. “With top game developers’ content so prevalent in the stores, it can be hard for other good quality apps to get the attention they deserve. Developers of other kinds of apps need to consider how to promote them. Depending on the type of app, they should consider how best they can exploit social media and social recommendations, tactical sales promotions and discounts, branding tie-ups, and targeted in-app advertising.” - Source
Beat 'em at their own game
Developers that don’t have the brand recognition or deep marketing budget pockets that the top 25 tap into can still do quite a bit to compete in the app store ecosystem. Creativity, persistence, and the ability to reach underserved markets is the key. There are several different ways that developers can increase the chance that their app will be discovered in app stores, including:
- Social media outreach
- Website tie-in
- Discounts, both seasonal and otherwise
- In-app rewards
- App store optimization
There’s also this somewhat obvious fact: Apple and Google Play are definitely not the only fish in the sea. There’s the Intel AppUp® Store, a relatively new app store offering that is quietly emerging as one of the biggest opportunities for developers on the market today – especially developers who are looking to take advantage of the emerging Ultrabook™ market. There’s also a massive app development opportunity inherent in the release of Windows* 8, a system that is scheduled to launch on literally millions of PCs, tablets, and phones in the next couple of years, offering a developer opportunity too huge to ignore.
Still plenty of room for savvy developers
We know that hundreds of thousands of apps are launched every week, some good, some bad, some mediocre. There is a major signal to noise problem, and in-store app discovery is at its earliest stages. How do developers get their apps to rise above the rest? Merely building an app doesn’t translate into getting people to notice your app. How do you get consumer to notice the app, and what will they do with it once they get it? How do developers start connecting with their users more, and getting their app into the hands of the people who really want to use it?
The best way to get people to notice your app is simply to build a good product; however, it doesn’t stop there. App store optimization, social media outreach, influencer/thought leader outreach, adherence to current usability standards, and other marketing efforts are important influences on whether or not an app will survive in an increasingly crowded marketplace. App discovery is being driven more and more by search and word of mouth, and not by the walled gardens of app stores with their curated lists, which makes app store optimization especially an important practice. These practices are crucial for any developer who is looking to compete at a meaningful level in the app store ecosystem.