The Apple App Store experienced its biggest drop in revenues last month as gaming installs and subscriptions stabilised following a surge during the pandemic. Revenues on the App Store dropped 5% year-on-year, representing the steepest drop the company noted since recording its data.
Revenues across top markets are decelerating
Gaming was the main reason for the decline, plunging 14% year-on-year. Net revenues across the top leading markets including China, Taiwan and South Korea were flat or increased. The top 10 markets make up 87% of App Store spending.
As previously reported by Sensor Tower, app revenues dropped 4.8% across the Apple App Store and Google Play following a drop in consumer spending on in-app purchases and subscriptions. Apple reported $6.9 billion in revenues for September, down from $7.2 billion in 2021.
Financial uncertainty to blame
“We believe the recent App Store results make clear that the global consumer has somewhat de-emphasized App Store spending in the near-term as discretionary income is reallocated to areas of pent-up demand,” Erik Woodring, an analyst at Morgan Stanley, wrote.
The analysts believe that the holiday season may lead to better results and an uptick in revenues again.
Apple increases prices
One way the company may be making up for losses is by increasing prices for app purchases, in-app purchases and subscriptions from the App Store. In light of rising inflation and currency fluctuations, Apple announced rising store prices in Chile, Egypt, Japan, Malaysia, Pakistan, Poland, South Korea, Sweden, Vietnam and all places that use the euro. This means an app costing €0.99 will cost €1.19 as of October.
The changes won’t affect subscription renewals, the company said.
- App Store revenues fell 5% year-on-year
- Gaming revenues dropped 14% year-on-year
- Declines in App Store revenues are led by waning consumer interest