Tired and disgusted with free apps that try to hawk in-game purchases and ads to you at every turn? There is no escape; the entire app market is going freemium. The reason for the rapid transition is spelled out by App Annie’s new survey. It claims that revenue from paid apps dropped by a drastic -29% in 2013 from the previous year. Over the same one-year period, freemium app revenue growth topped 210%. This explains the speed with which the entire mobile content industry has migrated to the freemium model. The app revenue information covers both Apple’s iOS ecosystem and the Google Play content empire.
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The portion of the entire global app revenue generated by paid apps tumbled from 8% in 2012 to merely 4% in 2013. App Annie believes that in-app advertising is going to grab a growing piece of revenue generated by freemium apps in coming years, rising as high as 60% in USA, Europe and Brazil by 2017. An interesting exception is the largest app market in the world – in Japan, ad revenue may remain at around 40% of in-app sales. This can probably be attributed to the free-wheeling spending of Japanese consumers on in-app purchases, a trend that turned the country to the world’s most lucrative app market at the end of 2013.
Of course, there are always exceptions to the rule – and in the mobile app market, Swedish powerhouse developer Mojang has demonstrated that it is still possible to generate massive revenue with a premium-priced app. The cult hit world-building game “Minecraft” has turned into an evergreen mainstream cash machine despite its $7 price tag, clinging to Top 20 status on US iPhone revenue chart over the past year. But at the moment, “Minecraft” and “Grindr” are the only paid apps in the US iPhone Top 80 revenue chart; all other items are free downloads.