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Half of all app store revenue goes to just 25 developers

Top app earners carve up $60m pie

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Apple's App Store and the Google Play store each claim to offer over 700,000 apps to choose from, but only a tiny fraction of them bring in significant revenue for their developers, according to research from analyst firm Canalys.

In fact, the company says, of the $120m in total revenue generated from paid app downloads and in-app purchases in the US during the first 20 days of November 2012, fully half was split between just 25 developers.

All but one of those top 25 earners were game developers, including Disney, ​Electronic Arts, Gameloft, Glu, Kabam, Rovio, Storm8, and Zynga, among others.

On average, Canalys found that 145 of the top 300 apps in the Apple App Store were games during its sample period, while the format accounted for 116 of the top 300 apps on Google Play.

The one exception on the top-earners list was Pandora, which markets the popular Pandora Radio app for its personalized music service.

In most of the other cases, however, Canalys found that the top-selling game makers managed to dominate the charts by offering multiple products through the app stores at once, to strengthen their respective brands.

For example, Rovio currently markets eight different variants of its Angry Birds franchise through the Google Play store, in addition to spinoffs such as Bad Piggies. Electronic Arts, on the other hand, publishes some 962 games for iOS, either under its own brand or those of its subsidiaries.

"With the holiday season now underway, we expect to see many of these top game developers employing discounts and special offers, taking advantage of their ability to cross-promote within their app portfolios," says Canalys principal analyst Chris Jones. "This is expected to ensure that over the Christmas period in the US, the dominance of key game developers will only increase."

Given the huge volume of apps available in both major app stores, developers who don't already have a strong brand presence will find it increasingly difficult to crack the market, the company says, citing discoverability as a particular problem.

To get ahead, Canalys says small developers – and makers of non-game apps in particular – should explore as many marketing avenues as they can come up with, including discounts, brand tie-ins, social media promotion, and in-app advertising.

The good news, though, is that there is definitely a growing market for paid apps. A November report by analyst firm App Annie showed revenues from the iOS App Store up 12.9 per cent from January through October 2012, while Google Play revenues more than tripled over the same period. ®

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