Report: $32 Billion Spent on In-App Purchases in Q1 2021

As mobile phones become more ubiquitous parts of people’s lives, and technology continues to advance, it would conceivably follow that consumers are spending more money in phone applications. It was confirmed that miHoYo’s Genshin Impact is the fastest mobile game to make $1 billion last month, but this also applies to non-gaming apps. One report from mobile market data analyst App Annie says consumers spent $32 billion USD on in-app purchases during the first quarter of 2021.

While the analyst does not break down what apps have received the most attention, it suggests global lockdowns and stay-at-home orders resulting from the ongoing coronavirus pandemic are a big contributor to “unprecedented” growth in the smartphone market. This can be seen through case studies like Pokemon GO spending reached its highest peak since launching in 2016 during Pokemon GO Fest 2020; retrofitted to work for players who were not going outside. Similarly, in November 2020 the dating app Tinder saw revenue 15 percent higher than in Q3 2019, according to Business Insider.

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Compared to Q1 2020, described as the “first period of global lockdowns” by App Annie, Q1 2021 revenue was up 40 percent. Smartphone users on iOS and Google Play (not including third-party Android stores) reportedly spent $9 billion more than the year prior. Of the total $32 billion spent on in-app purchases for mobile games, about $13 billion came from iOS users, meanwhile $9 billion came from Google Play users, according to a deeper breakdown by GamesIndustry.biz.

This increase of in-app purchases resulting from COVID-19 lockdowns coincides with a wider reliance on smartphones in general, which may lead to other issues. A review of studies published in July 2020, later archived by the US National Library of Medicine’s National Institutes of Health (NIH), suggests there may be more, faster onsets of myopia (nearsightedness) due to an increase in digital screentime that could be aggravated beyond the pandemic outbreak period. Certain in-app purchase systems like loot boxes have also been linked to problematic gambling that predominately affects children and low-education users.

Of course in-app purchases are not only a concern with mobile applications. Systems like loot boxes are seen in console or PC games like Overwatch as much as gacha systems appear in mobile apps like Genshin Impact. Titles like Marvel’s Avengers are also using premium purchases for in-game cosmetics.

Given the increase in revenue from in-app purchases seen during Q1 2021, it’s unlikely they will dissipate anytime soon. During a recent interview with Geisha411, Ninja Gaiden: Master Collection Producer Fumihiko Yasuda talked about smartphone support being one major change in gameplay environments that developers like Ninja Theory see affecting the industry. The industry simply needs to figure out how it wants to handle the rise in mobile apps and in-game purchases.

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Sources: App Annie, GamesIndustry.bizBusiness Insider, NIH

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