Games are dominating the app stores. But what does this mean for you?

Posted 2014-07-09 16:41:50 by Dan Page

A new report published by research firm Midia Research shows that games are completely dominating the app market. The report, named The Superstar App Economy: Dissecting the Global App Store Marketplace and commented on by the Guardian yesterday, shows games account for a whopping 84.9% of the top 700 grossing apps in the Google Play Store and Apple’s App Store.

The data was gathered from the top 50 grossing apps on Apple's App Store and Android's Google Play store in the US, UK, Canada, Germany, France, Spain and Italy, so there are duplicate entries, but still, these are figures not to be sniffed at. The remaining apps were largely social networking (4.1%), dating (3.9%), navigation and travel (2.3%).

While the dominance of games in the app sphere isn’t surprising if you’ve gone in and had a look at the basic metrics in the stores yourself, the report’s figures and analysis might still come as a bit of a wake-up call for those looking to monetise apps or games.

"The app economy is, for now at least, a games economy" say authors Mark Mulligan and Karol Severin, which we, as games developers, should be pretty happy about. The issue though at hand for smaller developers however, is muscling into a space dominated by very few companies; the aforementioned “superstars”, and doing so without a starting with a gigantic advertising budget.

Midia points out that 81% of the top grossing apps in the two stores are made by just 50 companies. The 350 top grossing apps on the Play Store were made by just 81 companies, while the App Store doesn’t fare much better at a total of 105 developers.

Clash of Clans creator Supercell, whose game frequently sits at the top grossing leaderboard, has a marketing spend reported to be at around $1 million a day, with a reported return of $5 million a day.

So what does this mean for game developers?

At a minimum, it’s about understanding your audience and the marketplace you’re in as a mobile games developer. Perhaps it’s about re-evaluation; is the shoe shop simulator you were hoping to sell for $3 going to be a safe return on investment or will you slip into the cracks like the majority of mobile game developers outside the free-to-play app space tend to do? Are you really going to get people to pay $20 for the gibbon costume in your new platformer? Perhaps not.

It’s worth considering your options in terms of free-to-play monetisation. You don’t have to make a game that’s unplayable or dull without spending cash. If it’s multiplayer it needn’t be pay-to-win. Team Fortress 2, World of Tanks and Planetside 2 are great examples of games you can play forever and have a great time with without spending a penny, but people certainly do.

Give it some thought; sit down and brainstorm different ways you might be able to monetise your game, and if you don’t want to, be careful with your spending and make sure you recognise the risk your company is taking.

People are becoming more and more accustomed to getting their games for free, and, sometimes, spending a little money once they come to like them. If making a free-to-play mobile game isn’t something you’re interested as a mobile games company, it’s very possible you’ll be facing an uphill struggle in the times ahead.

Like it or not, the mobile market has moved on and, to put it very lightly, full price titles are significantly lagging behind. Free-to-play developers are creating closed loops by growing their fanbases with revenue generated by smart monetisation, and only a colossal paradigm shift in the industry is likely to change this.