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China Now Largest Market for App Store Revenue, Surpassing the US

| Oct 23, 2016 10:39 PM EDT

Pokémon Go was the most downloaded app on the App Store and Google Play during the third quarter in China, now the world's largest market in iOS App Store revenue.

China is now the largest market for App Store revenue in the world, surpassing the U.S., according to a new report released in Oct. 21 by the app intelligence firm App Annie.

A report by techcrunch.com said that China earned more than $1.7 billion revenue in the third quarter of 2016, overtaking the U.S., which has been leading the iOS market since 2010.

Chinese consumers were found to be spending more than five times the amount they have spent in the previous two years, which the report predicted that China will have the largest absolute revenue growth by 2020.

At the beginning of the year, App Annie had estimated that if China's App Store revenue growth continues at its rapid pace, it would surpass the U.S. before the end of the year, which has now occurred.

According to App Annie, the growth in China is largely driven by games as the gap widened in the past quarter. About 75 percent of the App Store revenue may be attributed to games, even though the majority of those distributed in Apple's mobile marketplace were non-game apps.

The report however, said that non-games may regain the growth in revenue with the introduction of newer revenue streams such as in-app subscriptions. Other than games, Entertainment, Social Networking, Books and Photo & Video applications were the top-grossing categories in China, which revenue have tripled year-on-year.

Games became the second fastest-growing category in the country due to video streaming apps such as Tencent Video, iQIYI, and Youku. In China's communication apps, like Momo, QQ, and Inke, video streaming is also being inroduced.

App Annie's report also evaluated the current popularity of the game of the year, Pokémon Go, which reached $600 million in revenues faster than any other app to date.

The report said that Pokemon Go has achieved the milestone 2.5 times faster than Candy Crush Saga; 5 times faster than Puzzle & Dragons; and over 6.2 times faster than the highly successful Clash of Clans.

The report said that the game accounts for 45 percent of total time spent in-app compared with the rest of the Top 20 games. It is also included in the top 5 apps on Android and 4th place behind the giants, Chrome, Facebook, and YouTube.

In a report released by Sensor Tower this week, Pokémon Go was also found to be the most downloaded app on the App Store and Google Play during the third quarter, both worldwide and in the U.S. Niantic Labs, Pokemon Go's publisher, which was unranked before, is now the number 5 publishers by iOS downloads in the third quarter.

Next to Pokémon Go, the other top downloaded apps on the iOS App Store were Messenger, WhatsApp, Facebook, Hero MOBA (China), YouTube, Instagram, Snapchat, Uber, and Google Maps. The list also included top Chinese apps, such Youku, Snake Wars, iQIYI, Tencent Video, Didi Chuxing, National K Song, and Meituan.

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