2/28/2014 10:12:15 AM
Latest Window Store Trends Show Developers Best App Monetization Opportunities
Windows store, app marketing, app monetization, game revenue, Windows Phone
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App Developer Magazine

Latest Window Store Trends Show Developers Best App Monetization Opportunities



Stuart Parkerson Stuart Parkerson in Windows Mobile Friday, February 28, 2014
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Microsoft has released a report detailing its latest findings as part of a recurring series that provides details about recent trends in the Windows Store across categories, markets, and more. The report was provided by Bernardo Zamora, Senior Business Manager, Windows Store and Windows Phone Store.

Included are statistics about the categories, country differences, languages, and sources of revenue in the Windows Store app catalog using download and purchase data from January 2014, as well as looking at monetization trends throughout 2013.

Downloads per category

In January, Games accounted for nearly 40% of all downloads, followed by other categories with smaller but still significant download share which include Entertainment, Tools, Social, and Music & Videos.

Categories with highest incremental download opportunity

Even though the Games category is the most-downloaded category, the report also shows which categories have the highest ratio of downloads per app. This is a function of total downloads vs. total available apps in that category.

Mirroring recent trends, the Social category is the top category with nearly 2x average downloads per app than the second category. Photos, Games, and Productivity are the next categories with the highest opportunity.

It is obvious that while the Games category has the highest number of downloads, there are also more games available in the catalog so the competition is higher. As a result, there is a lower number of average downloads per app in Games than in Social or Photos.

Categories with highest incremental revenue opportunity

In addition to understanding the categories with highest download opportunity, it helps to understand which category has the highest ratio of revenue per app. Games is the #1 category for highest revenue per app, though other categories, including Productivity, Photos, and Music & Videos, offer a good opportunity with less competition due to smaller number of apps in the category.

In-app purchases by app category

Another important element to help decide which type of app to build is evaluating which app categories use the paid model vs the in-app purchase model. In January, in-app purchases were the main revenue source for monetizing games, and drove more than 30% of the revenue in Entertainment, Lifestyle, News and Weather, Photos and Productivity apps. Some categories where in-app purchase was used less frequently, for example Tools, Social and Health Fitness, might benefit from in-app purchase opportunities to potentially increase revenue.

Markets with highest in-app purchase trends

The Windows Store team looked at the 25 top-grossing Windows Store markets for January and calculated percentage of revenue generated from in-app purchases. Of those top-grossing markets, 17 generate 50% or more of their revenue from in-app purchases.

Customers in these markets made in-app purchases more frequently, so developers offering apps in these markets, may want to consider adding in-app purchase to help increase revenue.

The markets included Australia, Austria, Belgium, Brazil, Canada, China, Denmark, France, Germany, Italy, New Zealand, Norway, Poland, Russia, Sweden, Switzerland, and United States

Downloads by market

Windows Store is available in 200 plus markets. As developers localize apps for Windows Store consumers outside their home market, one factor to consider is which markets are generating higher number of downloads. 

In January, the top Windows Store markets were the United States, Canada, Germany, France, UK, followed by Western Europe and Latin America. That doesn’t mean, however, that developers shouldn’t consider other markets. A specific app may have characteristics that make it perform differently in these markets.

Languages of Windows Store customers

Language is a key driver of downloads and adoption. As a developer evaluates which languages to support in their apps, they can extend the reach of existing apps by adding support for more languages.

Offering an app in English only, for example, covers almost 40% of Windows Store customers. Adding Spanish, French, and Mandarin increases coverage to 60%, and adding German, Russian, Brazilian Portuguese, and Italian covers the large majority of Windows Store customers.

Monetization options

Another important decision is what monetization model or models to adopt - an app -paid apps, in-app purchases, or in-app advertising. The total 2013 Windows Store revenue shows that all three models are generating revenue and thus are good options to consider.
Paid apps and Microsoft advertising generated 70% of the 2013 revenue, and in-app purchases were the fastest growing revenue model, reaching to 30% of all store revenue in the year. The in-app purchase model is growing quickly, so much that in Jan 2014, in-app purchases surpassed paid apps revenue. In-app purchase consumables were added with Windows 8.1, and the new capability to have items that can be purchased, used, and then purchased again, has been one of the drivers of the increased in-app purchase revenue growth.

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