Over 70% of App Store purchases are for games; some explanation why

Buster Hein, Cult of Mac (via. Michael Rockwell) :

App marketing firm Sensor Tower estimates that Apple had 110 million active iPhones in the U.S. by the end of 2015. The fact that games were the top app category isn’t a shocker, but the difference between how much users spend on the top category and second category is pretty surprising.

Of the $35 users spend annually on apps, approximately $25 goes to games, while the second-place category, Music, receives only $3.40, which is less one sixth the amount spent on games.

Assuming this data is accurate and correct, the U.S. demography is probably an ideal state of app sales in populous markets. Other countries probably have it worse when seen through the indie developer’s eye.

According to the study, the top 5 categories where money is being spent are, in order: Games, Music, Social Networking, Entertainment and Lifestyle. It’s hard for anyone to argue with that order. But the astute among you may see a trend: users pay for experiences and feelings. One may even argue that these categories roughly (ignoring how each category is monetised and also ignoring the actual sum of money or the relative price differences) represent how much a user values this experience.

I, like Michael, would love for indie developers (at least the ones who make productivity apps and the like) to see their apps climb the charts too. But an excellently designed calendar app just doesn’t make enough users feel the same way as winning a game against a friend. So when it comes time to choose between spending $5 on a better calendaring system or spending those five dollars in beating a friend at a game, which developer you think is buying themselves a coffee that evening?

The App Store is broken in a lot of ways. There are systems Apple can construct to reduce the gap between categories and give indie developers a helping hand. But the chances of this order being changed (again, ignoring monetisation concerns) are few and far between.

Lastly, I’d like to touch upon a topic Marco Arment talks about with Overcast — his podcasting app. To paraphrase, Marco suggests in-app purchases should be placed at a point that unlocks an app’s ‘full functionality’ (eg. Overcast used to provide Smart Speed as an in-app purchase). This point – let’s refer to it as a sore point – should be lucrative enough to cause a user to trigger the in-app purchase but not so bad that the user gets frustrated without it. And this makes perfect sense. But the drawback here is that the user is aware of this deal — ‘There is a feature that this app offers and you don’t have and won’t have until you pay up’. (It feels as if there’s a negative connotation hiding behind a haze to that narrative.)

Games – specially the Clash of Clans types –  however, implement this ‘sore point’ (and therefore the deal) as a guise, inherent to the structure. Say a game lets you build a town-hall faster by buying 100,00 gems 1. Building it faster is the difference between losing or winning a match against an opponent. In this case, the deal becomes : ‘Do what you do now but faster, if you pay up’. This narrative doesn’t have a similar negative connotation to it since there is nothing you’re deprived of if you don’t pay up.

The trick the game pulls off – and the reason why I alluded to it being a ‘guise, inherent to the structure’ – is that it encourages impatience. Worse, it habituates you to it. You can upgrade your town hall from level 1 to level 2 in one minute. A user’s subconscious gets used to this. Then, when it comes time to upgrade your town hall from level 29 to level 30, you’re waiting days and the habit of impatience sets in. At a coffee shop nearby, the coffee brews…


UPDATE: I’ve a little more to add. As mentioned above, music is second among the top scorers. I’m sure you’ve heard someone say ‘Music makes me feel [an emotion]’ at some point. Games are better still; games are interactive. You’re a part of the game. Connect was supposed to bring interactivity to music with Apple Music but it’s pretty much botched for now.

  1. It’s well documented that people treat tokens that represent money, differently, from real money. So, a dollar’s worth of gems are spent way more generously than an actual, physical dollar. This article talks more about this phenomenon. ↩︎

In Uncategorized by Mayur Dhaka