Google Play sees strong growth driven by freemium model

As the Google I/O developer conference kicks off, a report has emerged charting the stellar growth of the Google Play app store over the past year. According to research and analytics firm App Annie, Google Play has steadily made gains as one of the largest app stores and app publishers are taking note, with the Google app store recently reaching over 1.5 million apps after adding 200,000 more in just six months.

Google Play has expanded rapidly across a range of markets over the past year and advancing economies are leading download growth among the store’s top markets. The USA remains the market leader, experiencing 1.2x growth between the first quarter of 2013 and the first quarter of 2014, while Brazil made significant gains to become the second largest market for Google
Play downloads, experiencing 2.6x growth over the same period, followed by Russia, South Korea and India.

However in terms of revenue growth, Japan dominates the market, having experienced 2.4x growth over the year period, followed by the USA, South Korea, Germany and the UK.

Although games are accelerating revenue growth, with games in Q1 2014 accounting for almost 90 per cent of Google Play app revenue, up from around 80 per cent a year earlier, apps outside of games provided about 60 per cent of Google Play app downloads in the first quarter of this year. Messaging apps supported high revenue growth for communication and social media categories although tools and communication categories displayed particularly rapid download growth.

Revenues tell a different story. Although games dominate revenue gains in Google Play, growth is almost universal across all categories. In terms of revenue generation, it’s the freemium model that continues to dominate growth. Freemium apps contributed almost half of Google Play downloads in May 2014, according to App Annie, with revenue from freemium apps growing to around 98 per cent of total worldwide Google Play revenue in May 2014. As you might expect, based on the revenue leaders, Asian markets have a exceptionally high proportion of revenue from freemium, while emerging Google Play markets such as Brazil, Mexico and Turkey tend to have a slightly lower proportion of revenue from freemium apps.