Feeds

Virtual products rake in more cash than ads

In-app gear now worth more than advertising for social media

Designing a Defense for Mobile Applications

Social gaming and networking applications are now making more money selling virtual merchandise than displaying adverts, which is good news for closed shops that make such things simple.

This may also have implications for developers, who may find themselves following the breadcrumbs to iOS platforms.

The figures come from Flurry, and are gathered from more than 2.2 million active users. The numbers show that in January this year the amount of revenue generated from installed applications tipped over from advertising to in-game purchasing, with virtual goods now generating around 85 per cent of the almost $20m the sampled users generate every month.

Graph showing revenue sources

Blue is advertising; red shows people buying virtual stuff.

Flurry gathers its figures from code embedded in mobile applications. In this way, developers who embed the code get insight into application use, while Flurry gets to gather valuable demographic data like this. However, it's worth noting that this study is limited to "social networking and social gaming" applications - which obviously present greater opportunity for in-game acquisitions. Despite that, the data demonstrates the importance of in-application transactions, and bodes badly for fragmented platforms which have more difficulty supporting them.

In fact, the figures all come from iOS devices, as Apple's iTunes store supports such transactions pretty seamlessly. Nokia's Ovi also enables in-app buying, as demonstrated by the Symbian version of Angry Birds, which enables the player to call in an air strike for a reasonable fee.

But the Android Marketplace has no such mechanism, and Google's devotion to supporting multiple marketplaces makes it difficult to add one. Users are already confused by the various places from which one can buy Android applications; one can only imagine the additional complexity of having to tell each application where in-game transactions should be routed. Android might be open, but with that openness comes complexity.

The solution would seem to be to declare openness, then make oneself the default source of applications and services. That's what Nokia is trying to do with Symbian, and might work for Google too, but if developers see that iOS apps have a revenue stream that's denied them on other platforms, then they'll obviously follow the money and supply users will all the virtual tat they want to buy. ®

HP ProLiant Gen8: Integrated lifecycle automation

More from The Register

next story
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
Apple orders huge MOUNTAIN of 80 MILLION 'Air' iPhone 6s
Bigger, harder trouser bulges foretold for fanbois
Bring back error correction, say Danish 'net boffins
We don't need no steenkin' TCP/IP retransmission and the congestion it causes
GoTenna: How does this 'magic' work?
An ideal product if you believe the Earth is flat
Samsung Z Tizen OS mobe is post-phoned – this time for good?
Russian launch for Sammy's non-droid knocked back
Telstra to KILL 2G network by end of 2016
GSM now stands for Grave-Seeking-Mobile network
Seeking LTE expert to insert small cells into BT customers' places
Is this the first step to a FON-a-like 4G network?
Yorkshire cops fail to grasp principle behind BT Fon Wi-Fi network
'Prevent people that are passing by to hook up to your network', pleads plod
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.