Gaming apps are among the most profitable out there. If you want to really make good revenue from apps, then welcome to the gaming industry!
Mobile applications continue to generate billions of dollars in revenue year after year. Besides, the mobile app market continues to grow with no signs of slowing down. In 2023, mobile devices represent a whopping 55% of the overall internet traffic in the US.
So, it comes as no surprise why so many businesses are looking to develop their apps. But if you have a great app idea that you think will click with users on the Android and iOS markets, you know you’ll need a huge sum to get things started.
And so, this leads you to the question, “How much money do apps make?” So, let’s discuss how much money apps make per day, which apps have the biggest earning potential, how they generate revenue, and which platform they should be developed on.
How Much Revenue Do Mobile Apps Generate?
Without a doubt, today’s most profitable revenue-generating entities are mobile applications. A Statista report suggests that global mobile app revenue is expected to be around $935 billion by 2023.
A majority of these figures come from the successes of many top gaming apps, which are some of today’s top-grossing apps.
In 2019, PUBG Mobile’s revenue per month was around $146 million, which was more than $4.7 in daily revenue. The app has over 100 million users worldwide in 2023.
Other game apps have impressive figures as well. In 2023, Fortnite from Epic Games raked in around $2.7 million in daily revenue.
But with a wide range of applications around, it’s hard to put a single finger on how much money an app can make per day.
For instance, the apps on the top 200 list make an average of $82,500 per day. And those on the top 800 list make around $3,500 daily.
On average, gaming apps make around $22,250 per day, while entertainment apps make only $3,090 daily. Hence, we can not determine exactly how much money an average app makes.
Which Types are the Top-Grossing Apps in the Mobile App Market?
With millions of mobile applications on both Google and Apple platforms, it is safe to say that the app market is vast with plenty of opportunities to generate revenue. Since its conception, the app market has been growing substantially.
In light of this, the biggest contributors to global app revenue are gaming apps.
In 2022, the app revenue of the Google Play store for mobile games stood at $31 billion. By comparison, the revenue of the Apple App Store for gaming apps exceeded the $86 billion mark. Games accounted for around 62% of estimated app revenues out of a worldwide app market calculated to be around $431 billion.
The advances in technology in gaming such as better graphics, control, and gameplay contributed to the boom of the mobile industry. The rise of esports is another major contributing factor as well. The US accounted for 29% of global mobile game spending in 2022, and statistics show that 63% of mobile gamers are women.
IoT and Other Verticals
E-commerce mobile apps have given brands the means to be recognized globally. To cash in on this market, mobile applications require the integration of a payment gateway within the apps. This integration allows businesses to sell products on their mobile apps.
Also, the Internet of Things (IoT) is being prepared as the next big thing in the mobile app development space. The number of IoT devices is expected to increase by 64 billion in 2025. The market was valued at around $2.48 trillion and was estimated to reach $16 trillion by 2025.
And thus, many businesses are also considering Smart Watches and Smart TVs as another vertical that may generate a huge amount of revenue down the road.
There are currently 70 million American homes connected to Smart TVs. Likewise, smart speakers such as Google Home and Alexa also dominate the app market.
Therefore, diversifying by making their apps compatible with smart devices, businesses can make more money and expand their existing user base.
Which is the Best Platform for Apps to Generate Revenue?
How much money mobile apps make will depend entirely on the platform they will be built on.
Currently, the Android platform has a 75.82% market share, which is the largest in the mobile industry. In comparison, the iOS platform is only 22.9%, which makes Android the dominant platform in terms of app revenues in the current environment.
According to a SensorTower report, from 2018 to 2023, the expected Compound Annual Growth Rate (CAGR) of user spending on both platforms is 16.8%. Combined user spending in the App Store and Google Play could reach $186 billion U.S. dollars by 2027.
Choosing the right platform and making that decision on how you monetize your app to generate revenue is a crucial strategic action. With this in mind, we present to you 4 of the most used revenue models in the industry. You can choose any of these based on your niche.
Revenue Models for Mobile Applications
1. Premium Apps (One-time payment)
Premium mobile applications on the Google Play Store and Apple app store charge a one-time download fee. This one-time payment model seems to work well for education apps. WolframAlpha, a paid app, recently generated $30,000 in revenue in February 2022. With over 1 million downloads, this app is a powerhouse in the educational category.
2. Subscription Model (Recurring payments )
The subscription model is popular in the industry with successful apps such as Netflix, Hulu, and Amazon being the most well-known operators in the media streaming services niche. This model requires its users to pay a recurring fee so they can continually access the application’s services. A giant in this category, Netflix generated $8.9 billion in revenue in the 2nd quarter of 2023. Spotify generates roughly $3.2 billion in gross profit each year.
3. In-app Purchases (Freemium apps)
The in-app purchase model is also an excellent way to generate revenue. It works by allowing users to download the app and use basic features for free. Users will need to pay if they want to access the premium features.
Fortnite is a popular mobile game that uses the in-app purchase model. While downloading and playing the app is free, Fortnite managed to generate a revenue of $5.8 billion in 2021.
Conclusively, this trend exhibits the power of mobile applications when it comes to revenue generation. The trend also showcases how apps help businesses make money through the digital landscape.
Sponsorship is one of those monetization models that involves connecting with popular brands in the same market niche. Through in-app ads, brands can have a more integrated presence which often translates to stronger results when it comes to generating revenue.
Do free apps get paid?
Free apps rely entirely on in-app purchases to generate revenue since they are free to download and use. Many consider this app revenue model as a highly profitable one. In 2023, the projected figure that in-app purchases in game apps could potentially make was $145 billion.
Thus, if you’re thinking of creating a free app for your business, then you should consider adding in-app purchases as one of your revenue models. Many of today’s highest-grossing apps get 98% of their income from this model.
What is ad revenue?
Mobile advertising revenue is the monetary income or money that apps earn from an in-app purchase.
Game apps advertising revenue is the money apps earned from in-game ads or in-app advertising such as offerwalls, rewarded video ads, playable ads, interstitial ads, etc.
Ad revenue also powers many of today’s free-to-play apps. But you shouldn’t just focus on ad revenue alone. It’s also a good idea to maximize your chances for a revenue stream.
How much money do apps make per ad?
How much money apps make depends on the ad unit and app genre.
With in-app advertising, it is around $0.02 for the average revenue per ad impression. For the average revenue per completion, interstitial ads range from $1 to $3, and an overwall can cost around $2.50.
For banner ads, the average revenue per click is around $0.10 and longer video ads range from $5 to $10.
On average, app earnings per download range between $0.60 and $1.20.
Which Platform Should App Developers Use to Make More Money?
Among audiences, every platform has a completely different market and different levels of popularity. And so, it is crucial to determine which platform your app will be developed on since it can directly affect how much money it can potentially earn.
Because there’s always a demand for app development, app developers generally earn well in this domain. That being said, Android app developers potentially earn more than iOS developers.
Android developers earn an average salary of around $97,600. Android apps have a higher earning potential since there are more users as well as a higher market penetration compared to iOS apps. But this doesn’t mean iOS developers aren’t fairly compensated.
Salaries of mid-tier iOS developers are around $96,000. iPhone app developers often charge more than developers for Android apps. But still, how much money mobile apps make depends heavily on their success.
What’s the Best Monetization Strategy for Mobile Apps?
Moreover, even free apps can generate revenue through the deployment of various monetization strategies. Finding the right mix of monetization methods is an important piece of a puzzle that will lead to your app’s success. Here’s how you can do that.
1. Determine your app’s essential business purpose
Apparently, finding out the exact problem your app is trying to solve and which platform it will be deployed on is the best way to discover the right monetization strategy for your mobile app.
For example, if your app is intended to make learning different languages a lot easier, placing ads would be a bad idea. Why?
Users trying to learn a new language will find the ads too distracting. Overall, it may result in a poor app user experience.
The best solution is to apply a monetization strategy that blends well with your app’s business purpose.
Also, for apps that provide language learning, implementing the in-app purchase model would work wonders for you. You can offer audio lessons or language learning toolkits that users can acquire through in-app purchases.
2. Gain the right kind of traffic for your mobile app
Gaining traffic is not an app owner’s primary goal. But what you should focus on the most is gaining the right kind of traffic for your mobile app.
Here, we’ll continue using the language learning app as an example. Based on what problem the app is trying to solve, we can conclude that its traffic are most likely immigrants.
These may be people who want to use the app as they live and work in a new country. But there may also be people who will use the app for personal or social purposes.
Once you have identified your user persona and target audience, your next step is to create a marketing funnel, which converts your app’s traffic into revenue.
3. Know what your competitor’s app is doing
It’s not surprising to find apps operating in similar niches you’re targeting. But what you need to do instead is examine their revenue models and current earnings. This way you’ll understand what’s working and what’s not in certain niches.
Research is important in making sure you have prepared your app’s monetization strategy before you launch it in the market.
4. Introduce a set of new technologies
Introducing a set of technologies can make your app stand out from the rest of the competition. It also improves the app user experience. Additionally, it could also boost its earning potential.
For instance, incorporating blockchain technology into your app may help deliver more total profit share than traditional app monetization models.
Which Types of Mobile Apps Generate Revenue?
The journey to mobile app development doesn’t end after you’ve decided to create your app. You still need to clarify the type of mobile application you want to develop.
Also, a common mistake app owners make is to create a mobile application based on what they like, think, or prefer. But this is not a great way to get started with a mobile application.
The best approach is to:
- Research & analyze the market
- Streamline the missing parts
- Take advantage of the gap through your app and
- Ensure success & stability early on
Study Other Successful Apps
The Liftoff company, for instance, published a report that made our lives easier. The report is about the details of gaming applications that have become the leader out of all the apps generating around $34.4 billion in annual revenue. With this report, you can easily bring out the type of application you want to develop.
Consequently, we’ve rounded up the types of popular apps that are surely making a lot of money. This will give you an idea of the types of apps you can develop to generate high revenue.
- Social Media apps (Facebook, Twitter)
- Personalization apps (Zedge)
- Health & sports app (My Fitness Pal)
- IoT app (Vialatm)
- Shopping/eCommerce apps (eBay)
- Music streaming app (Spotify)
- Performance optimization app (CCleaner)
- News/magazine app (Forbes)
Among the above-mentioned applications — social apps, eCommerce apps, and music apps are the ones users seem to spend most of their time on.
What Does the Future of Mobile App Development Look Like?
With regards to revenue generation opportunities, there are still many untapped potentials in the Android and iOS markets. But the question, “How much do apps make per day,” still has no definite answer.
Nevertheless, with the facts and stats we provided in this blog, we believe you can reach a ballpark figure for your app development project.
Dom&Tom has been helping businesses accelerate their growth and transformation using our mobile, web, and app development expertise.
Reach out to us if you’re stuck wondering how much investment is needed to launch your app in the digital market.