Last week, Apptopia published an interesting study about the apps in the top grossing charts. You can read more about it here. This report triggered some interesting thoughts about the mobile eco-system and particularly about games.
1st Thought – 2,624 games in the top 50 – wait, what?
One of the most interesting points of the study is that over 4 years, 2,624 have been in the top 50 grossing chart in US. That’s a bit counter intuitive since one might expect only 50 games in the top 50. However, there is obviously games coming in and out of the charts which increases the number of companies that have been there.
When thinking about the size of the mobile game ecosystem, people tend to think it’s highly concentrated in a small number of companies but this study means there are at least 2,624 meaningful games which clearly indicates the existence of a strong mid market. We can also play around with the numbers and extrapolate what would happen if the analysis was to be made on the Top #200. Based on the shape of the curve, this is a power function and so the same number of games in the top #200 might have been 50,000 different games. I think it’s safe to assume that all these games made significant revenue taking into consideration that they generated money in other countries and not only from IAP.
Here is the extrapulation.
2nd thought – App intelligence companies still focus on IAP
Looking at the analysis that Apptopia made about the top grossing games immediately led me to think “what would happen if they made the same analysis for the top downloads chart. This chart has more games come and go and while these games don’t show up in the top grossing charts most of them make very nice revenues from advertising.
As noted in this Pokcet Gamer article, one of the biggest trends of the last 2 years in mobile was hyper-casual. An analysis that is more focused on the top downloaded chart or one that would fix the top grossing one to include ad revenue would be much more interesting. However, this is exactly where app intelligence companies come short as noted by Eric Suefert. and also on our blog post analysing AppAnnie’s top 52 publisher report.
3rd thought – Who will win the app intelligence race
If you look at the app intelligence market there is a very clear winner today – Appannie. An evidence to the lack of a true contender is that it charges annual licenses of $500K – only a monopoly can do that. Their leadership position hasn’t stopped other companies from trying and there are multiple providers who try to compete: Priori Data, Sensor Tower, Apptopia, Similarweb and probably others
The weakness of this space as mentioned above is in tracking ad revenue and this weakness could also be the biggest opportunity. More than half of the revenue in mobile today is made by placing in-app ads inside the app. While the half that is made by IAP is pretty well covered, the half that is made with ads is not covered at all.
It’s not an easy task but some companies already made some progress in this direction. Apptopia specifically are offering estimations for ad revenue but those might not be accurate enough to win yet. If they were, maybe Apptopia’s study would have been about ad revenue.