Mobile apps are fairly easy to monetize. You can insert ads, you can put in microtransactions, you can garner sponsorships or even simply charge up front for your app or game. Mobile games in particular are quite susceptible to the “freemium” model, often garnering huge amounts of money through a combination of ads and microtransactions for a title that costs nothing to download. The top grossing apps shown in the Play Store as of this writing, in fact, are freemium games. To be specific, Clash of Clans, Game of War – Fire Age and Candy Crush Saga are the top three. According to app performance analytics firm App Annie, mobile gaming has grown to encompass a staggering 85 percent of all app revenue in all forms. The exact figure? A mind-blowing $34.8 billion, with growth to an even more incredible $74.6 billion projected for 2020. To put that in perspective, Alphabet’s total gross revenue in 2015 was about $74.5 billion.
One such game, Clash of Clans, has found an international audience after an incredible marketing effort. Following in its footsteps, many games have begun to gain a following in mature markets such as China, Japan and Korea. With international growth factored in, the mobile gaming industry looks poised to match or even beat its console and PC counterparts in some markets. Gaming in general is expected to become an industry worth over $115 billion by 2020, according to analytics firm Digi-Capital. This means that, if App Annie’s projections hold true, gamers using touch controls and Bluetooth controllers will make up over two-thirds of the entire gaming market, beating out every other sector.
It stands to reason that the gaming industry’s approach to DLC and selling premium titles to begin with may be a bit less profitable than the freemium model, however some console and PC online games have adopted freemium, possibly indicating that the model seems to just work better when it’s hand-in-hand with the ubiquity of the mobile platform. According to App Annie’s report for 2015, the total app market for the year hit about $51 billion, but is expected to hit $101 billion by 2020, almost matching the gaming industry. With the mobile sphere exploding as new tech such as virtual reality and artificial intelligence hit the scene, only time will tell if those projections will hold any weight.