Playing is big business
The report found that 40% of all app downloads in Q1 of 2013 for both Apple Inc. (NASDAQ:AAPL)’s App Store and the Google Inc (NASDAQ:GOOG) Play store were games. More importantly, games made up 70% of all App Store revenue and 80% of all Google Play store revenue in Q1 2013.
Apple Inc. (NASDAQ:AAPL)‘s game app revenue increased by 25% from the previous quarter and Google Inc (NASDAQ:GOOG)‘s skyrocketed by 90%. Part of the increase may have come from China’s surge from 10th-largest app revenue contributor a year ago to fourth place now.
So games are going gangbusters in both app stores, but what about the actual app revenue each company is making?
Back in February, Apple CEO Tim Cook said in a conference call that the company has paid $8 billion to developers since the app store opened. As The Wall Street Journal reported a few days ago, based on Apple’s 30% take from all app sales, this would translate into about $3.4 billion for the company over the past five years.
Google Inc (NASDAQ:GOOG)’s app revenue is much harder to nail down and it hasn’t said how much it has paid out to developers. What we do know is that Apple made 2.6 times more in app revenue than Google Inc (NASDAQ:GOOG) in the last quarter, according to App Annie. Keeping this in mind, as well as the fact that Google Play launched after the App Store, it’s likely Google is bringing in less than Apple Inc. (NASDAQ:AAPL)’s app revenue estimate.
Not the only game in town
Although Android and iOS are the dominant players in the app market, we can’t forget about Microsoft Corporation (NASDAQ:MSFT)‘s Windows Phone Store or the Research In Motion Ltd (NASDAQ:BBRY) World app store.
According to a recent Canalys report, the App Store, Google Inc (NASDAQ:GOOG) Play, Windows Phone Store and the Research In Motion Ltd (NASDAQ:BBRY) World app stores increased paid app and in-app purchases by 9% overall in Q1 2013, compared to last quarter. The total revenue for all of four app stores in the quarter, before revenue sharing, is estimated at $2.2 billion.
Obviously, the Windows Phone Store and Research In Motion Ltd (NASDAQ:BBRY) World are bringing in much less than Google and Apple because they have a much smaller percentage of smartphone market share. Right now, Apple Inc. (NASDAQ:AAPL) has about 74% of the revenue market share in the app market — leaving just 26% to split between Google Inc (NASDAQ:GOOG), Microsoft and BlackBerry.
When it comes to apps, the potential to add additional revenue for companies is an important aspect for tech investors should think about. But more importantly, investors should consider who’s dominating the app world, because that could translate into smartphone and tablet stickiness among consumers. So far, it appears Apple Inc. (NASDAQ:AAPL) is winning in the app world, but with Android’s huge global platform market share, it could be anyone’s game in a few years.
The article America, We Know What You’re Downloading originally appeared on Fool.com and is written by Chris Neiger.
Fool contributor Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft.
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