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In-App Purchases Take Over App Revenues

Free apps with in-app purchases account for nearly all nonadvertising revenues

In-app purchases have long contributed a significant amount of the revenues earned by app stores like Apple’s or Google’s. Based on research from app analytics platform Distimo, the share of those revenues coming from in-app purchases has increased dramatically over the past year.

Leaving aside ad revenues earned by app developers and focusing only on revenues to app stores, Distimo found that 98% of Google Play store revenues and 92% of Apple App Store revenues in November 2013 came from free-to-download apps that offered in-app items for purchase. That compared with 89% and 77%, respectively, just 11 months earlier.

Distimo also found that while Apple’s store is still tops around the world in terms of revenues, Google Play did gain share during 2013, suggesting faster growth in in-app purchases made on Android-based devices than iOS-based ones.

eMarketer estimates that for mobile games in particular, 41.4% of all revenues—including ad revenues—came from in-app purchases this year. We expect that share to reach 47.5% by 2017.

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