As a Senior Business Analyst, Stijn focuses on understanding how technology becomes value-creating innovation, how business models affect market dynamics, and the consequences of this for corporate strategy. He is the lead Internet of Things researcher in the VisionMobile team. He has been writing about IoT since 2012.
Appsfire Infographic shared figures for the iOS App Store in 2012.
W3i, the in-app offer exchange provider, released a report on December 6th showcasing recent trends in mobile app monetization. The W3iNSIDER Report breaks down data from its hundreds of game developer partners and 66 million monthly active users across iOS and Android.The data shows that smaller microtransactions ($0.99-$1.99), long thought to be the backbone of the freemium model, actually contribute significantly less revenue to mobile games than more expensive in-app purchases that range from $9.99 to $19.99.
When surveying the in-app purchase price points and how they contribute to the overall revenue of a sample of games, W3i found that, on average, 47 percent of total revenue comes from purchases costing $9.99 to $19.99. Smaller purchases from $0.99 to $1.99 only contribute an average of six percent to total game revenue.
The freemium model emerged as the foremost business model in mobile gaming with premium and subscription business models declining. The freemium model is built on the back of microtransactions with gamers spending a dollar or two to unlock virtual goods.
W3i is also reporting in-app purchasing trends from around the world:
“Although the U.S. learned about freemium gaming from Asia, it’s apparent that Americans are taking their own approach to it,” says Robert Weber, co-founder of W3i. “Where mobile games in Asia still depend on microtransactions, U.S. gamers play more like whales- spending larger amounts of money in mobile games.”
An issue on mobile app testing has published on”Testing Experience”, one of the world’s leading magazines for software testers and test managers. The magazine is full of in-depth insights on app testing, from context-dependent techniques to mobile network variability testing. A great resource for anyone who’s serious about how to test their apps!
App Annie Intelligence, which tracks more than 700,000 apps, reports that freemium apps – free apps that have in-app purchases – are experiencing impressive revenue growth worldwide, far outpacing premium apps in both iOS and Google Play stores. Over the last 24 months, worldwide revenues for freemium apps on iOS have more than quadrupled. In 2012, worldwide revenues on Google Play have grown 3.5X. Now, apps generate 69 percent of the worldwide iOS app revenue and 75 percent of global Android app revenues. Meanwhile, premium revenues for both app stores remained relatively flat in these time periods.
This confirms earlier reports of this trend by Distimo, IHS iSuppli and others.
From TechCrunch:
App measurement and ad company Flurry has revealed significant traction for its iOS and Android app advertising and targeting platform, AppSpot. The platform was made publicly available in October 2012 and has attracted more than 1,000 app publishers to sign up in just over three weeks, according to the company. Flurry described revenue performance of the first 500 applications already live as “very strong”, with an average eCPM of $5.80 across interstitial, video and banner ad formats.
This hackpad (a collaborative list composed by 150 people) has an impressive list of web and mobile revenue models, ranging from the classic ad-driven models and pay-per-download to intermediaries and commerce models.
For Your Inspiration.
In a previous article, we discussed revenue and costs for app developers overall. Here, we add some more detail for each platform individually.
The bar for successful apps is high: if you want your app to stick out among a million others, it needs to be well designed, user friendly and working flawlessly, all of this comes with significant development costs. In this article, we give an indication of the types of costs you need to take into account when planning your app.
Costs can differ wildly depending on your platform and type of app. A mobile game with 3D graphics will have a radically different cost structure than a weather app. The range goes from $5,000 for very simple apps to hundreds of thousands for extensive apps. Often cited, Twitterific estimated their development costs as high as $250,000 back in 2010. Use common sense when thinking about your costs, be realistic and plan for cost overruns.
Here are some costs you need to take into account.
Developers have a range of options to choose from when it comes to generating revenue. This choice is, to some extent, dependent on business model, scale and target market. Which revenue models are most popular, and which are most profitable?
Key insights and recommendations:
Related tools: In-app purchasing and virtual goods | Ad networks and mediation engines
Most app makers are not primarily in the game to make money. The primary reason for developer platform selection is not app monetisation, but reach; irrespective of platform, 54% of developers adopt a platform because of reach, while 43% cite low cost and 30% cite revenue potential. Moreover, out of the eight types of app developers we identified, only three segments (Explorers, Hunters and Guns for Hire) are directly motivated by money when committing resources to a new platform.
Among those of you that are in it for the bling, developer profitability is a hotly debated topic. Apple’s iOS is generally thought to support greater revenues per application, compared to Android, but the evidence is mostly anecdotal. Many stories of overnight successes circulate the internet, but it’s not clear if they are replicable.
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To stay above the app poverty line you need to make a sensible budget plan for your app. This requires that you have realistic expectations about the costs and revenues that you can expect. Based on VisionMobile’s Developer Economics 2012 survey, we can now offer you an informed opinion.