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New research shows free-to-play on mobile isn't slowing down

New research shows free-to-play on mobile isn't slowing down

February 21, 2014 | By Mike Rose

Is the free-to-play business model showing any signs of slowing down on mobile? Quite the opposite, says Distimo, as most recently in-app purchases in iOS apps accounted for 81 percent of total U.S. revenue taken on the App Store.

That's according to a new report from Distimo and Chartboost. Distimo says that "free apps with IAP are still on the rise," and revenues from IAPs reached a new all-time high in November 2013.

Notably this share then dipped back down in December, but Distimo says this is because paid apps tend to sell better during December -- most likely because of the holiday season.

In January 2014, the free-to-play revenue share on the App Store was 79 percent. That compares to revenue share of 66 percent in January 2013, and 46 percent in January 2012.

But if you think there's no more room for free-to-play to expand, you should still the figures for China and Japan. In both countries, IAP revenue share makes up a whopping 94 percent of all spending on the App Store.

In fact, Chartboost lists Japan as the most lucrative App Store right now for both free-to-play and paid games, with Australia, South Korea, the United Kingdom and the U.S. following closely behind.

That's because the average revenue per download is much higher in these countries compared to others, meaning that smaller markets can still provide large revenues. In Australia for example, the ARPD for TeamLava's Jewel Mania was $6.65 -- exactly double that of the U.S.

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