Proof, if proof were needed, that the apps gold-rush has resulted in the majority of the riches being concentrated in a few developers’ hands: analyst house Canalys says just 25 developers accounted for half of app revenue on the two dominant U.S. app stores, Apple’s App Store and Google’s Play, over a 20-day period last month.
The finding is an estimate based on Canalys’ daily App Interrogator surveys, and refers to revenue generated in the U.S. in these stores during the first 20 days of November. Between them, the 25 developers accrued $60 million from paid-for downloads and in-app purchases over this period, according to the analyst. All the top-grossing developers — bar one — are games developers. The exception is the Pandora music streaming service with its Pandora Radio app. Games developers in the list include Zynga, Electronic Arts, Disney, Kabam, Rovio, Glu, Gameloft and Storm8’s TeamLava — with Canalys going on to note:
During the same period, games accounted for 145 on average of the top 300 paid apps in the Apple App Store and 116 of Google Play’s top 300 paid apps. Games also accounted for 94 of the top 300 listed free apps for Apple and 110 for Google Play.
It follows that developers not making games have an uphill battle to get their wares noticed and monetized. “Discoverability is a particular issue in the Apple App Store and in Google Play given the huge inventories they boast,” noted Canalys Senior Analyst Tim Shepherd in a statement. “With top game developers’ content so prevalent in the stores, it can be hard for other good quality apps to get the attention they deserve. Developers of other kinds of apps need to consider how to promote them. Depending on the type of app, they should consider how best they can exploit social media and social recommendations, tactical sales promotions and discounts, branding tie-ups and targeted in-app advertising.”
If there are any lessons here for striking it lucky by making money with games apps, successful game developers “almost invariably have multiple titles generating revenue,” says Canalys — so, in other words, don’t put your (Angry Birds) eggs in one basket. The analyst notes that Zynga had 15 titles in the list of top 300 grossing iPhone apps “on average” in Apple’s App Store every day, and nine titles in the equivalent list in Google Play. Even Angry Birds’ maker Rovio had “multiple game variants” in the list.
As for games developers who aren’t on the list for November — there’s more bad news ahead: the analyst expects many of the top 25 developers to consolidate their dominant position over the holiday season by “employing discounts and special offers, taking advantage of their ability to cross-promote within their app portfolios.”
“This is expected to ensure that over the Christmas period in the US, the dominance of key game developers will only increase,” added Canalys VP and Principal Analyst, Chris Jones, in a statement.
A recent report by analyst ABI Research predicts that cumulative global app revenues will exceed $30 billion by the end of the year.