Google Play powers 23% app store spending jump in Q3, study says

Brief:

App store spending jumped 22.9% to $21.9 billion in Q3 from a year earlier as Google Play outpaced Apple's App Store in revenue growth, researcher Sensor Tower found. The sources of revenue included in-app purchases, subscriptions and premium apps.
Google Play revenue rose 24% to $7.7 billion with first-time app installs up 11.3% during the period to reach 21.6 billion. Meanwhile, App Store led revenue with $14.2 billion and saw first-time app installs bump up 5.3% to nearly 8 billion from the same time last year — again showing the outsized spending power of iOS users compared with consumers whose mobile devices run the more popular Android operating system, per Sensor Tower. The total number of app downloads rose 9.7% to 29.6 billion in Q3.
Dating app Tinder again generated the most revenue among non-gaming apps, as spending rose 7% from Q3 2018 to about $233 million. Social video app TikTok saw 177 million downloads to become the second-most popular app after Facebook's WhatsApp.

Insight:

Google Play's significant gain in revenue drove overall growth for the app economy, although it's not clear which categories of apps were standouts. Video streaming service Netflix was ranked relatively high — No. 2 behind Tinder based on app store revenue — despite changing its billing system to avoid paying millions in commissions to Apple's App Store. The ranking may reflect ongoing revenue from pre-existing subscribers.

Google-owned YouTube ranked No. 3 with a 16% revenue bump to an estimated $164 million, maintaining an unbroken growth trend for the video platform. The majority of the top 10 apps ranked by revenue were platforms surrounding video streaming or messaging, including Chinese video platform iQIYI, Tencent Video, Pandora, Google One, LINE Manga, LINE and Alibaba's Youku.

Meanwhile, mobile gaming revenue rose 20% to an estimated $16.3 billion in Q3 from the prior year, powered mostly by iOS users' spending a total $9.8 billion in Q3. Games made up 74% of total in-app spending, a slight decline from the 76% a year earlier, per Sensor Tower. Competition among app developers has driven growth in advertising on Google Play and the App Store, the dominant sources of mobile apps worldwide, to reach tech-savvy younger players who are more likely to play video games on smartphones than older generations and may be inaccessible to more traditional ad formats like TV and print.

For the first time, Tencent's PUBG Mobile became the top-earning game with a nearly sevenfold surge in revenue to $496 million in Q3 alone. Niantic's enduring augmented reality game Pokemon Go showed the fastest growth in Q3 from the prior quarter, with a 63% gain to $308 million, per Sensor Tower's estimate.

App downloads in China declined as its government slowed the pace of game approvals amid ongoing concerns about kids' video game addictions. The country last year imposed a nine-month freeze on game approvals that lifted in December. Ending the ban didn't lead to a recovery as downloads fell 6% to 2.2 billion in Q3 from a year earlier, although revenue has risen since Q2 2018, per Sensor Tower.