As we wrap up 2012 celebrating 50 years of James Bond we thought it would fun to share some insights and trends from this year on the Android app ecosystem. Keep reading to see where and how developers are making their money.
Breaking it down
Licence to Bill
Most Android developers on our network generate 78% of their revenue off in-app purchases. What's interesting is that even though Google IAP is available there is almost 20% of transactions being processed through PayPal. Of the remaining 22% of revenue that comes from advertising, a little over 60% is from selling non-incentivized advertising on Papaya's cross-promotion network AppFlood.
Freemium social game developers often sell in app content that can be categorized as a durable or consumable good. A durable virtual good would be something that benefits the player permanently throughout the game such as increasing attack points. A consumable good is the opposite. It gets used up quickly and examples include bullets, cash, and energy. Even though the average price of consumables and durables aren't very far apart, 97% of all in app purchase revenue come from consumables.
2012 was a huge windfall for Casino app developers. Currently 28% of the top 25 grossing apps on Google Play are Casino genre. What's even more amazing is how unpopular these apps are - only 2% of the top 150 free apps are Casino. Don't read too much into this - gambling is extremely popular and this genre is bound to catch fire once real money gambling legislation is resolved. Expect to see another big wave of casino app clones in 2013.
As mobile advertising and cross-promotion networks evolve we start to see new ad formats being rolled out in order to push engagement higher. You may have noticed interstitials (full screen advertisements) are popping up on your favorite free applications. All for good reason too - interstitials are providing developers a 300% increase in click through rates over standard mobile ads. Additionally, some of the highest CTRs on AppFlood are from mid-core fantasy players.
The World's Enough
The average revenue per paying user is a key metric for any developer. In 2012, with the rise of Android smartphones around the world, we have seen unexpected countries become a top priority for localization.
From Droids with Love
Google I/O 2012 promised us all device fragmentation would be a thing of the past with new carrier and OEM initiatives. Six months later and we have seen little change to one of Android's biggest problem. You could always try to develop for every device and OS but you'll probably need a few martinis... shaken not stirred of course.