Revenue figures for game developers for the App Store have hit an all-time high according to Apple. It has been reported that developers selling their apps via the App Store channel have seen a 40 per cent increase in earnings versus last year - a staggering $20 billion in recorded earnings.
Apps on the best sellers list were popular games including Pokemon Go and Super Mario Run by Nintendo. According to Chief Analyst at Jackdaw, Jan Dawson, in-app purchases were central to the increase in sales – an example of which being the upgrade of game characters.
App Store, first launched in 2008, has witnessed a total revenue figure of $60 billion for its developers. The figure for last year in isolation stands at $20 billion –accounting for a third of the total sales figure since 2008.
Mr Dawson believes that the access consumers have to free apps, leading later to paid upgrade downloads, is a major reason for the increase in sales. This reasonably new business model enables consumers to also buy access to new levels or to gain access to new powers via download.
Apple also made changes to its revenue sharing breakdown allowing for developers to receive 70 per cent of revenue, with Apple receiving the remaining 30 per cent. Alterations to revenue sharing deals have taken place with Netlix and HBO Now – among a number of developers of subscriptions. Part of the terms and conditions of these new agreements includes a reduced cut for Apple, where subscriptions extend to a second year. This is thought to incentivise developers to continue to hold the interest of their customers.
Apple also made the decision to widen the reach in terms of who can offer customer subscriptions to Apple products. In the past major categories like magazines and music made available the service, however 2016 saw Apple extend this to all 25 categories which includes game developers.
In 2016, revenue generated by subscriptions increased by 74 per cent – reaching $2.7 billion. In addition to this, the range of apps available via Apple increased by 20 per cent, to 2.2 million.
Mr Dawson confirmed that subscriptions create a more “predictable” flow of revenue in light of slowing iPhone, iPad and Mac sales.
App sales so far in 2017 are looking strong – with consumer spend on New Year’s day confirmed at $240 million.