Since its introduction more than ten years ago, Apple’s App Store Subscription Model has been a game-changer for the mobile game market. It enables developers to charge a monthly fee in exchange for access to premium features, services, and content in their games.
What Is Apple’s App Store Subscription Model?
Introduced in 2011, Apple’s App Store subscription model allows developers to generate revenue by charging consumers a monthly fee to access premium features, services, and app content. The customer must regularly pay the price for continuous access to these premium services.
The Apple App Store offers a subscription model for various apps, including games. By giving users access to exclusive content and services, the subscription model seeks to improve the user experience while giving developers a more reliable and predictable source of money.
Let’s take a closer look at the impact of Apple’s App Store subscription model on mobile game revenue and what it means for game developers.
Long-term Revenue Stream
The Apple App Store subscription model provides developers with a consistent monthly income, strengthening their business and allowing for future growth. This is because the subscription model allows developers to predict more accurately how much money they will make. Because of this predictability, they can plan for the future and test new features and ideas, resulting in a better and more successful app.
In-app subscriptions are one of the most effective ways to monetize an app, and the App Store subscription model makes it even more effective. Subscription fees account for a large portion of revenue from non-gaming apps that offer subscriptions, so having this model in place can lead to long-term success for the app and its developer.
Higher Average Revenue Per User (ARPU)
Subscription-based mobile apps typically generate higher Average Revenue Per User (ARPU) than other types of apps. This is due to the recurring nature of the subscription model, which encourages users to commit to the app and its content, services, and features over time. Developers can generate additional revenue from users willing to pay for a more premium experience by offering exclusive premium content, services, and features that paying subscribers can only access.
Subscription apps on the App Store receive a higher revenue share for subscription fees than non-subscription apps, driving higher ARPU. Developers benefit significantly from this because they receive 70% of subscription revenue, which increases to 85% after one year. This increased revenue share ensures that developers receive more of the app’s revenue and can build a more sustainable business model.
Greater user engagement and brand loyalty.
A subscription app can increase user engagement, resulting in a better user experience and a more successful app for the developer. Users are more invested in getting the most out of subscription apps, so they have higher engagement rates. This requires the developer to provide regular content and updates, which helps develop a positive and personalized relationship with the users. As a result, users are more likely to remain hooked on the app and discover new and exciting things to explore regularly.
Increased engagement can also lead to increased brand loyalty and a greater likelihood of referrals. This and increased regular users may result in a higher lifetime value (LTV) for the app. A higher LTV can result in more exposure and a higher ranking in the app store.
Closing Thoughts
Apple’s App Store subscription model gives game developers a revenue stream and a more predictable income. The subscription model can be a profitable monetization strategy if game developers focus on providing unique and valuable experiences for users.
It’s worth keeping an eye on this model and how it continues to shape the mobile game industry, whether you’re a game developer or just a fan of mobile games.