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Games to remain top mobile app revenue generator in app stores

11 July 2018 Jack Kent

Games will continue to be the most lucrative mobile content category for the foreseeable future, dominating consumer spending on mobile app stores, even though its total share of market will decline slightly during the next four years, IHS Markit research and data show.

Of the $109 billion in worldwide consumer mobile spending projected by IHS Markit for 2022, games will account for a massive 75% share, worth some $83 billion. And while that represents a slight decline from the 80% share games commanded last year, the category retains its preeminence as the leading generator of mobile content revenue and spending, an honor it has enjoyed dating to the pre-app store era of the early and mid-2000s.

A key factor in the projected decline of the games category in the next few years is the rising adoption of in-app subscriptions from other categories, notably on-demand music and video, as well as dating apps. Even so, the games category will continue to grow, especially in the still-growing Chinese market and in rapidly expanding Southeast Asia. In comparison, growth will be more modest in North America, Europe, Japan, and South Korea as smartphone penetration reaches saturation and as the mobile games market matures.

Among regions, Asia Pacific will represent the biggest share of global mobile app spending, with 64% of the worldwide total by 2022. Japan will remain the world's top spender per capita, generating $120 per person in mobile app expenditure.

In app stores, Apple will maintain a clear lead even by 2022, although Google has been working to narrow its revenue gap with the market leader. Apple's increased focus on driving in-app subscriptions through its app-store billing will be a major driver of its ongoing dominance in the global mobile apps space. In key markets, Apple will continue to enjoy high-value monthly subscription content, growing the average revenue per account.

In China, where the Apple App Store is present but where Google Play is absent, Tencent is the top mobile games purveyor, with revenue in 2017 exceeding $9 billion, IHS Markit data show.

For more details, see the latest IHS Markit report on this subject, Mobile apps and games outlook: 2018, part of our Games Intelligence Service and Consumer Platforms & Ecosystems Intelligence Service.

Jack Kent is Director, Operators & Mobile Media, at the IHS Technology Group within IHS Markit.

Posted 11 July 2018

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