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Thanks to subscriptions, iPhone apps finally made more money than games

Screenshot of App Store icon.
Enlarge / Apple’s App Store.

Throughout the short history of smartphone apps, games have consistently driven more revenue than non-gaming app categories. But that has finally changed in the United States, according to new data from app intelligence firm Sensor Tower.

The shift began in May 2022. By June, 50.3 percent of US consumer spending on apps was on non-game apps like TikTok, Netflix, and Tinder. Spending on non-game apps has recently grown at twice the rate as spending on games. Game spending was exploding at the start of the COVID-19 pandemic in late 2019 and early 2020, but by late 2020, non-gaming apps caught up, and they surpassed games in 2021.

This has been driven in part by the shift so many apps have made to a subscription-based model of late. For years, games generated more revenue not necessarily because they got more downloads (though they often did) but because their long-term monetization was clearer, more consistent, and more robust thanks to in-app transactions. Other types of apps didn’t have that going for them, and many were sold for one-time purchase prices or offered a limited number of premium upgrades.

In an effort to boost its revenue from the App Store, Apple reportedly met with developers to evangelize the recurring subscription model to them. Subscriptions have become more common in many types of apps.

Though the subscription model has at times been controversial with some users, it has become a boon for overall revenue on app marketplaces. Sensor Tower notes that 400 different apps managed at least $1 million in consumer spending in the second quarter of 2022 on Apple’s App Store. In the same quarter, 61 App Store apps reached at least $10 million, which is greater than the number that had $1 million in 2016.

It’s important to note, though, that this shift applies only to Apple’s iPhone and iPad App Store. Games are still generating more revenue on Google Play, the app store for the competing Android platform. In fact, it’s not even close: US consumers spent $2.3 billion on Google Play games in Q2 2022, but around $1 billion on non-games.

And even on Apple’s App Store, games still dominate consumer spending in most places outside the United States.

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