Google Play In-App Purchase Revenue Growth Jumps 7X In One Year, Subscription Revenue Growing 2X Each Quarter

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Google held a session today at I/O 2013 about how to make money on Android, and in the initial few minutes it shared some updated stats around Google Play revenues and how those are progressing. Not surprisingly, the big growth is coming with in-app purchases, though Google’s recently launched subscription model is also making headway.

Google said that its in-app revenues through Play are up 700 percent since the same time last year, which is reflected in the top apps as listed by highest grossing titles in the Play rankings. Subscriptions, which just launched around 12 months ago, is also making headway, doubling inbound revenue each quarter according to Google. Some apps which use subscription as their exclusive revenue model are now cracking the top grossing list, like Pandora.

The momentum is still clearly behind in-app purchase, and as a result Google suggested that there’s good reason to consider that as a revenue model when building apps. Session host and Google Play Product Manger for Commerce and Monetization Ibrahim Elbouchikhi said that while the team likes to play a game called “Where’s Minecraft?” where they spot the world simulation sim from Notch, which continues to sit high on the charts despite being a one-time purchase paid app, the trend is overwhelmingly favoring freemium experiences.

Other key trends identified include a higher propensity to buy things on tablets vs. phones. Google framed this in light of its attempts to get developers to build tablet-optimized experience, saying that there’s a 1.7x higher purchase rate on tablets than on phones for apps. Also, updated versions of apps that take advantage of recent platform additions like the new capabilities unveiled at I/O this year have a 2.2x advantage at monetization vs. older versions, on average.

For Google, spelling that out is a way of it being able to show devs that it makes financial sense to invest the resources and efforts needed to convert apps to tablet versions, or to make them available with as many new features as possible that show off Android’s system improvements. And it does look to be having an effect on Google’s efforts to improve Android user monetization; Elbouchikhi said that average revenue per user (ARPU) among the Android install base is up 2.5x versus the same time last year.