Earnings from a mobile app in 2021

The mobile gaming market is growing rapidly, and more and more companies are finding a place for themselves in this "Blue Ocean". According to Sensor Tower, 2020 was a record year for sales of mobile apps and games and exceeded the $100 billion mark. At the end of the year, this trend continued and during the Christmas period, users around the world spent more than $ 430 million in the App Store and Google Play.

Despite this growth in sales, the number of applications in stores is growing at a slower rate compared to the number of websites on the Internet, due to the high cost of developing mobile software. However, let's see what the effectiveness of seemingly so small software is, in comparison with the cost of it.

Reports and forecasts of the App Store and Google Play.

Based on SensorTower's reports and forecasts, by 2023, user spending on mobile apps running on the iOS and Android operating systems will reach $ 156 billion, representing an increase of 120% over 2018, and a total annual growth rate (CAGR) of 16.8% through 2023.

These indicators are approximately the same as the existing data until 2021, so we can safely rely on them. But it is worth noting that such a turnover is formed to a greater extent by the TOP 200 applications in stores.

There are many ways to maximize revenue from a mobile app, but this requires costs that will need to be borne throughout the life of the product-analytics and marketing, support and improvement of the product based on the analysis of the data obtained.

Mobile applications require regular improvement and development, otherwise the application will slowly but surely go down the search in the mobile store, which will reduce page traffic in the store, the number of downloads, and accordingly revenue. Therefore, be prepared for additional costs that will allow your project to remain profitable for a long time.

Ways to earn money

The profitability of your mobile app can be predicted before you start pouring money into its development. To begin with, you can determine what results will be achieved based on the performance of similar products available on the market.

Let's start by looking at which categories of mobile apps exist and are the most profitable.

Mobile Games

The most profitable are gaming applications — more than 60% of all profits from online stores fall to their share, but this category is less predictable. Game trends are quite blurry, and development can be delayed indefinitely (as the founder of Epic Games, Sweeney Tim said “In game development, the first 90% of the project is much easier than the second 90%”). You can also read about the problems in the timing of game development in the book “Blood, Sweat, and Pixels: The Triumphant, Turbulent Stories Behind How Video Games Are Made" by author Schreyer Jason, because in a nutshell it is impossible to describe why this area is so unpredictable.

As Newzoo points out, the global gaming market is developing very actively and by 2022, consumer spending on games will reach $ 196 billion.

If we talk about the already known income from games, then as an example, the casual game Flappy Bird earned $ 50 thousand a day only on one advertisement (this kind of game is done for 1-2 months). And as for the giants, the well-known online shooter PUBG Mobile brought in $ 2.6 billion in 2020, the strategy Honor of Kings — $ 2.5 billion, Pockemon Go — $ 1.2 billion, Coin Master and Roblox — $ 1.1 billion, and Monster Strike — $ 958 million (such games are being developed for 6 months and above). Therefore, the potential of mobile games is very great and tempting.

To reduce the risks when releasing a mobile game, many indie developers or companies resort to cloning already existing successful projects. Of course, this is plagiarism and bad manners, but do not forget that such giants as Facebook and Google are also clones of their predecessors. Full cloning will certainly have a negative impact on the existence of your application in the mobile marketplace, but after changing the plot or graphics, you can quite achieve good results — from $ 10 thousand to $ 100 thousand per month.

Online dating

It's no secret that dating services are quite legal, and most importantly very profitable (in 2020, the global online dating market grew to $12 billion). Also, in addition to the classic Badoo, Tinder, eHarmony, eDarling and Match, niche services focused on a strictly defined target audience (by income level, location, nationality, occupation, appearance, food preferences, political beliefs and even religion) are gaining popularity. The variety of topics, internal functionality, and monetization methods are very attractive for investors. If we talk about the leaders in the market, Badoo is now one of the three most successful developers in Europe (the two most popular applications of this company are the dating apps Badoo and Bumble App), and the most profitable dating service in 2020 is the American Tinder.

Entertainments

We should definitely mention the entertainment industry, which seemed to have suffered very much during the pandemic. Travel was no longer available, and movie theaters, parks, recreation areas, and other public places where people could meet and enjoy live communication were closed. Concerts and various event events have moved to the online space with the help of existing services, such as Zoom,Google Meet, Wherever, Discord, Skype, etc. Thanks to the restriction on movement, users began to actively use other formats of recreation - online cinemas, games, online libraries, social networks, music services, funny services that put masks on faces, insert your photo in popular videos, and much more. This whole category of apps captured the hearts of a large number of users in 2020 and changed the way they look at leisure.

As one indicator, let's look at the most popular apps by revenue level in the first half of 2020.

Apptopia TikTok's revenue statistics record app revenue in 2020 at $540 million (excluding revenue from Chinese third-party companies). According to investors quoted on Reuters, TikTok's revenue in 2020 was $ 1 billion (the same investors estimated TikTok at $50 billion).

Relative to 2019 (in December, there was a peak of revenue of $ 43 million), we see how rapidly the social network has gained momentum and every month it is only more popular.

The most popular app for watching videos was the app from Netflix. It is installed not only on mobile phones and tablets, but also on TVs with built-in operating systems or supported set-top boxes like Apple TV, NVidia, etc.

Thus, Netflix's revenue in 2020 was almost $ 25 billion dollars, which is 25% more than Netflix's revenue in 2019 ($ 20 billion). If you pay attention to all their reports since 2011, there will be not only a desire to buy shares of this company, but also to develop something similar.

Fitness and Health

Due to the closure of fitness clubs, limited access to sports grounds and the motivation to lead a healthy lifestyle, the mobile app market has boomed for fitness apps, as well as all health and nutrition trackers. According to Reports And Data forecasts, the global market for this segment will reach $ 14.64 billion by 2027.

As an example, the Fitbit app (fitness tracker for smartwatches). Fitbit's revenue in 2020 was $ 1.13 billion, and ranks fourth in in-app purchase revenue at $ 4.4 million (according to Apptopia).

Another app for sports fans is Strava. Initially, it positioned itself as a mobile app for cyclists, where users can organize a bike ride, share their knowledge and training with other cyclists, and most importantly compete with other members of the community. In 2017, Strava added more features, GPS tracking of running during the marathon, tracking exercises such as ”treadmill“ and ”rowing". As a result, Strava's revenue in 2020 was $ 72 million, and according to the forecasts of the company itself, it is planned to increase revenue by 30% in 2021.

What conclusions can we draw from these indicators for 2021?

The year 2020 showed that people's interest in the services of mobile platforms has increased dramatically and created the habit of using such services. And of course, the world economy has experienced many global crises over the past 30 years, but none of them has changed people's lives so dramatically — people's very attitude to life has changed, as well as their interests. Therefore, the financial forecasts of companies in this market segment will only improve. There are more and more startups and investors who want to grab a tasty piece of the pie.

So if you've been harboring the idea of a mobile app for a long time, now is the time to bring it to life. Go ahead and good luck in all your endeavors!