Publication: How The Most Successful Apps Monetize Their User Base

This month’s report examines and analyzes the business models and revenues per download in the Apple App Store for the period from January 2012 through March 20, 2013, and looks at the development of the revenue generated by in-app purchases over time, along with the differences in monetization. It also analyzes the average revenue per download (ARPD) for top apps, and shows how this differs per country and devices. Analyzing the ARPD can be important for investors to make analyses of user engagement and market potential.

All numbers mentioned in this report are based on an analysis of the all-time revenues and downloads of the top 250 highest grossing applications in February 2013 that have been released since January 2012, unless otherwise noted. The analysis covers revenues generated through the App Store, and therefore ad revenue is excluded. The estimated downloads and revenues of these applications are available in Distimo AppIQ, on which the analysis is based.

All-time average revenue per download for top grossing apps

The table below contains the top most grossing iPhone applications in the U.S. in February 2013, which were released since January 2012. For the top 10 apps below, the all-time revenues per download are shown in the table, and shows there are large differences per app. The ARPD ranges from $0.37 for What’s the Word? to $7.04 for Rage of BahamutClash of Clans, the top grossing app on iPhone in the US in February, generated $4.66 per download on average to date. Candy Crush Saga, the second most grossing app for iPhone, still generates less revenue per download than Clash of Clans though. Of course, it should be noted that Candy Crush Saga has had less time to monetize as it has been released about four months after Clash of Clans. Hay Day, Supercell’s second hit app generated $3.29 per download on iPhone in the US. Rage of Bahamut generated most revenue per download of top these top grossing apps and MARVEL War of Heroes, another top Mobage app, generated $2.93 per download on average on iPhone in the US.

Popularity of in-app purchases seems unstoppable

In-app purchases (IAP) now generate the majority of the revenue in the app stores. This has been the case for some time now, and it continues to rise as displayed in the graph below. In-app purchases generated only 53% of revenue in the Apple App Store for iPhone in January 2012 in the U.S., but  generated a record 76% in February 2013 clearly demonstrating the success of this monetization method.

 

Average revenue per download

To examine the average revenue per download (ARPD), we have taken the top 250 grossing applications from February 2013 for the U.S. iPhone App Store

as our sample, that have been released since January 2012. Regardless of the business model used, the ARPD is $0.99 for all apps together for iPhone. Distiguishing between business models, the ARPD for all paid apps in the analysis was $2.25. For free apps, the ARPD is much lower at $0.93. Of the freemium apps, 92 apps made less than $0.99 per download, which is the lowest price point for paid apps.

 

ARPD compared between countries

It is also interesting to compare the ARPD between countries. Similar to the analyses above, we analyzed the total revenues divided by the total downloads of the top 250 apps in February released since January 2012 in several countries in the Apple App Store for iPhone. The graph shows that while the ARPD in Germany, UK and U.S. are quite similar, it is much higher in Japan.

 

Download the full Report

In the publication you will find much more detailed information about revenue per download and business models. Please download the full report here.

The press kit including all image files is also available.

 

Hendrik Koekkoek