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Messaging apps now dominate Android app market revenue

Messaging App Gaming Analysis

Many angry readers ask me why I yammer on endlessly about messaging apps like LINE and Kakaotalk. Why would anybody care so much about this app market niche? Well, one reason to care is that these messaging apps are becoming game platforms that are starting to devour the global app market revenue base. The latest App Annie data shows that in June 2013, no fewer than eight out of the top-10 games in Google Play listed by global revenue were apps linked to LINE or Kakao. The only independent apps on the top-grossing game list were Candy Crush Saga by King and Puzzle & Dragons by GungHo.

This trend has not emerged in American app market yet, because the U.S. messaging market is still dominated by WhatsApp, which does not offer game tie-in applications yet. But in Asia, the app market revenue cake is being rapidly gobbled up by games that are marketed and distributed via popular messaging apps. In major markets like Japan and Korea, Android app revenue has soared ahead of iOS app revenue. Google Play’s growth in Asia is so robust that the global Android market is now being effectively dominated by the Japan-Korea axis.

Western app vendors have started hitting back — June 2013 was the month when the Finnish Supercell returned to being the world’s biggest app vendor measured by revenue. Supercell achieved this by finally breaking through with Clash of Clans on the Japanese iOS app chart. The app recently became the second biggest revenue generator on Japanese iPad market, which is a rare feat for a Western  vendor.

The global app market is now being split between Western vendors like Supercell and King that dominate iOS market across the globe, and Asian vendors that tend to get vast majority of their revenue from the Google Play and iOS markets in Japan and Korea. Both sides are now racing to cross over into enemy territory. In June, the most successful crossover company globally was Supercell with its conquest of Japan. So far, LINE, Kakao and GungHo have been unable to really crack the U.S. iOS app market.

The big global app market revenue question now is whether the messaging apps from LINE and Kakao can start making serious inroads into American market — and whether other Western vendors apart from Supercell can crack the tough Japanese and Korean markets. WhatsApp is facing considerable pressure to jump on the game platform bandwagon before the massive sales success of LINE and Kakao franchises bury it internationally.

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