People love to splurge on games in app stores, even as other apps struggle to make money. But this is starting to change as companies figure out ways to monetize their non-game apps, says a new report from mobile market research firm Newzoo.
The share of revenue for non-game apps in app stores worldwide rose marginally from 15 percent in 2015 to 16 percent last year. But it’s projected to accelerate by 30 percent annually to reach nearly a quarter of total app revenue by 2020.
Chat apps Line and Kakao – from Japan and South Korea respectively – topped the revenue list on Google Play. Tinder – the leader in dating apps from the US – came in third, while French dating app AdoptAGuy, where women make the first move, climbed to number 8 after launching in the US.
Even as chat and dating apps made hay on Google Play, music and video apps dominated the iOS app store, with streaming services Spotify and Netflix leading the way. Chinese video-on-demand app iQiyi was eighth, with its American counterpart Hulu coming in tenth. Line and Tencent were other Asian companies on the iOS list, but these rankings are based only on direct revenues from app stores, and not secondary sources of revenue such as ecommerce on Tencent’s WeChat.
Top grossers on Google Play for non-game apps
Top grossers in iOS non-game apps
Apart from new ways of monetization, revenue growth for apps will come from the continuing rise in smartphone users from 2.6 billion currently to 3.6 billion in 2020. More than a quarter of the next billion smartphone users will be from India, which overtook the US last year to be next only to China in number of users – although it’s a long way behind in spending power.
The top four countries in terms of smartphone penetration are all from the Middle East – Qatar, the UAE, Bahrain, and Kuwait – reflecting the high incomes in their population. Qatar, for instance, has the highest per capita GDP in the world. Singapore is fifth in the list, with three-quarters of its population using smartphones. The biggest headroom for growth in number of users is in India.
“As smartphone penetration increases, we think it will become more and more important to understand the consumer side of the mobile market,” says Newzoo CFO Thijs Hagoort.
“Innovation in areas such as streaming, AR, mobile payments, and mini apps [like Google’s instant apps] will have a significant impact on the mobile economy. We also expect alternative app distribution channels, such as third-party app stores and direct downloads, to become more important in the coming years, especially in the Android market.” Advances in VR devices and non-gaming VR content, such as following live sports, hold great potential, the report pointed out.
The report’s data is derived from Newzoo’s mobile services which include the tracking of devices and app stores. It also partners with TalkingData, Priori Data, Pushwoosh, deltaDNA, and SafeDK for mobile data.
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