98% of Google Play Revenue Came From Freemium Apps in May

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Image: Mashable Nina Frazier Hansen

By Katie Nelson2014-06-27 00:30:19 +0800

More than 1.5 million apps are available for download on Google Play, but the store's main source of revenue isn't the apps that you pay for upfront.

Business analyst firm App Annie released a report this week, which shows that 98% of the platform's income in May came from freemium apps. A portmanteau of "free" and "premium," the term refers to apps that are free to download but require payment to add levels or other in-game perks.

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However, while the majority of revenue stems from freemiums, the same cannot be said for the number of monthly downloads. The report showed that only about half of May's downloads were freemium apps; the other half are free apps with no strings attached. The reason for the spike in freemium revenue was not explained in the report.

Many freemium apps are gaming models, aligning with the need to buy higher levels or virtual goods. During Google's first quarter of this year, 90% of revenue came from games. The use of real money to buy virtual objects has drawn criticism for giving people with more money a higher gaming advantage, but the App Annie data shows that although the jury is out on whether freemiums are unethical. It is clear, however, that they are commercially successful.

The average Google Play app earns $1,125 in profit. By comparison, the average app on Apple's App Store brings in $4,000; the average app on the Windows Phone Store only brings in $625 for Microsoft. While Google Play is far behind Apple in terms of profits, it is quickly making strides, especially in parts of Asia, Brazil, Russia and Mexico.

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Topics: apps, Apps and Software, Google Play, Mobile, Tech