Global app spending surged on Christmas

This story was delivered to BI Intelligence Apps and Platforms Briefing subscribers hours before appearing on Business Insider. To be the first to know, please click here.

Global consumer spending on apps reached $196 million on December 25, 2017, up 12% from $175 million on December 25, 2016, according to Sensor Tower.

This spending was across in-app purchases (IAP), subscriptions, and premium apps in both Apple’s App Store and the Google Play Store. Insights into app spending on Christmas Day is significant as many consumers are activating new smartphones, installing and purchasing new apps, games, and subscriptions, which can set the tone for the year ahead. Sensor Tower’s data excludes Android revenue in China.  

Here are the key findings from the data:

• Games continue to generate the lion’s share of app spending. Spending on gaming apps grew 5% year-over-year (YoY) to hit $158 million, up from $150 million in 2016.
• But other app categories are growing faster than the gaming segment and are growing their share of total app revenue. Worldwide consumer spending for non-gaming apps surged the most, with spending on non-gaming apps growing 66% YoY to hit $38 million on Christmas 2017, up from $24 million on December 25, 2016.  
• Entertainment apps in particular are seeing significant growth. Worldwide consumer spending in entertainment apps grew 98% YoY on Christmas 2017. It is estimated that entertainment apps accounted for 5%, or $9.5 million of total app spend during this time, up from roughly $4.8 million in 2016. Growth in the entertainment app category makes sense since entertainment apps such as Netflix and HBO Now are typically subscription-based. 

Non-gaming apps accounted for a fifth of all app spending on Christmas 2017, an increase over 2016 that highlights the success of new app models. On December 25, 2017, worldwide consumer spending on non-gaming apps accounted for 20% of the total spend in apps, up from 14% on Christmas in 2016. Increases in non-gaming apps’ share of total app spend is likely a result of subscription apps becoming more popular among developers because they generate more steady revenue.

Rather than having to rely on the sporadic purchasing behavior of app users, subscription revenue comes in on a regular basis. The growth of non-gaming app spending indicates that monetization of this app category is improving, likely due to the growing popularity of app subscription models.

To receive stories like this one directly to your inbox every morning, sign up for the Apps and Platforms Briefing newsletter. Click here to learn more about how you can gain risk-free access today.