In-depth: 'Ignore Android at your own peril!'

[Industry consensus says that iOS beats Android hands down for app revenue, but is it true? Sean Thompson, VP of production with developer Mobile Deluxe shares iOS and Android numbers to find the truth.] The widespread industry consensus is that iOS handily beats Android as a revenue generating platform for game makers. For example, app store analytics company Distimo published a report last December stating that the iOS App Store has generated 6 times the revenue of Google Play (or The Artist Formerly Known as Android Market as we call it 'round these parts). Around the same time, Flurry released an analysis of several top cross-platform apps that showed Android generating only 24% of the revenue of iOS. The same Flurry report shows that "Developer Project starts" (the number of new projects started by developers) skew very heavily toward iOS, proving that the developer community at-large agrees that iOS is the place to be. So, is the conventional wisdom correct? No, based on the results we see here at Mobile Deluxe. In the case of ad-supported apps (where an app monetizes via banner ads/interstitials and doesn't ask players to spend their own money), iOS appears to be the superior platform. But in the case of in-app purchase (IAP) supported apps (where the experience is ad-free, but players are asked to spend money to supplement their experience), Android is the clear winner. The fact that Android outperforms iOS on a per user basis for our IAP-supported apps stands in stark contrast to conventional wisdom. Furthermore, the iOS advantage for ad-supported apps may be short-lived, but the Android advantage for IAP-supported apps is here to stay. Read on to find out why. About the Data Our primary ad-supported app is Solitaire Deluxe. We have over 1.5 million downloads on iOS and are approaching 1 million downloads on Android. Our most popular IAP-supported app is Big Win Slots. Big Win Slots has almost 1 million downloads on iOS and about 200,000 downloads on Android. All data for this analysis came from 2012 YTD results for those two apps. Revenue data used is ARPDAU (Average Revenue per Daily Active User). Solitaire Deluxe results – Ad-supported favors iOS As the chart above shows, iOS beats Android in ARPDAU by 35%. Why? The data points to two specific reasons: 1) iOS players generate more ad impressions per daily active user (DAU) and 2) The amount of revenue we make for every ad shown (aka eCPM, which is technically the net revenue we make for showing 1,000 ads) is significantly higher on iOS for part of the period. Speaking to the first reason, higher ad impression per DAU figures appear to be caused by the iPad Effect. As I called out in my 2012 predictions post, 30% of our iOS ad impressions come from the iPad. Tablets have longer play sessions and generate more ad impressions for an ad-supported app. Because there is not a true Android equivalent to the iPad in terms of popularity, Android does not see the same overall level of engagement. This accounts for two-thirds of the difference between platforms. The other one-third of the difference is attributable to higher eCPMs on iOS in the month of March. The eCPMs were equivalent for the first two months of the year, but the quarter-end is seeing good results for iOS. Android, not so much. This speaks to the general volatility one should expect with an ad-supported app. However, we have never seen Android eCPMs higher than iOS, but we have often seen eCPMs on iOS higher than those on Android. iOS takes the prize in this category as well. Overall, iOS is the clear winner for our ad-supported app. However, there is no structural reason for that to continue ad infinitum. Long term, there has to be a viable Android tablet solution. Amazon’s Kindle Fire was a great first step for a mass market Android tablet, but Google needs to improve its operating system before Samsung, Asus and the other OEMs can compete with Apple in the high end. As for Ad eCPMS, we saw two months of similar results across the platforms. If not for the March uptick in iOS (which I am very happy about), the eCPMs would have been the same. Big Win Slots results – IAP-supported favors Android In the case of IAP-supported apps, Android wins the ARPDAU race by 24%. This difference can be attributed to two distinct influences: 1) IAP revenue per DAU dipped on iOS in January and 2) TapJoy's Marketplace provided significant incremental revenue on Android above and beyond IAP. For standard IAP revenue, February and March month-to-date were very similar across the two platforms: Android is ahead by approximately 2%. The month of January is a different story, as iOS lagged behind Android by 22%. That is enough of a difference to give Android a 10% advantage for the whole Q1-to-date period. Even if we exclude January as an anomaly and call it a tie, that's big news. On a per user basis for our IAP Supported apps, Google Play is just as strong, or stronger, than Apple's App Store. To see the impact TapJoy's Marketplace has, let's look at a slightly different version of the IAP-supported chart: TapJoy accounts for a full 14% of the difference between Android and iOS revenue for IAP. On Android, TapJoy's Marketplace features incentivized app installs, which means the player can get free virtual currency in exchange for downloading an app. Players are happy to download another app, especially when it is free, and give it a try in exchange for free coins. It's a win-win-win (player gets free coins, we get revenue, 3rd party app maker gets installs) as far as I am concerned. And it makes a significant revenue difference for Android. In my opinion, this points to a key difference between iOS and Android moving forward. As we all know, Apple banned TapJoy's incentivized app installs from iOS last year (and thank goodness they did, because now the Top lists in the App Store are completely pure). There is far more risk in Apple suddenly changing their policies and forcing app makers to adjust. Thus far, Google seems to be relatively hands-off. One thing we know for sure is that Apple values its secrecy far more than its relationship with its developer community. Witness the recent launch of the iPad 3 (don't care, that's what I'm calling it) and the nine days’ notice we were all given to get our apps resized and live before device launch. Final Verdict In the end, the final revenue score is iOS 1 - Android 1. However, given the widespread opinion that Android monetization lags far behind iOS, Android's victory in IAP Supported apps is notable. The additional monetization methods that Android currently allows are the difference maker. Because Google is more accommodating than Apple, I expect Android to see the lion’s share of TapJoy and other monetization market leaders’ continued innovation; Android only stands to improve over time in this regard. Additionally, better Android tablet hardware and software could help close the gap between Android and iOS on the ad-supported front. One hopes that Google has that at the top of their to-do list. As I finished writing this post, an Appcelerator/IDC report was released that shows that developers are slowly losing interest in Android. The main reason cited is Android device/version fragmentation and the better revenue opportunity on iOS. The fragmentation gripe is legitimate. Game makers accustomed to dealing with the limited number of devices that iOS requires are in for quite a shock when they start working with Android. In spite of that, I cannot say this to my fellow mobile developers strongly enough: ignore Android at your own peril! Planning an iOS only release strategy is short-sighted and disastrous in the long run. Android is too big of an opportunity to leave undeveloped. There are ample resources out there providing best practices for developing for both iOS and Android. If you’re still struggling with it, feel free to reach out to us here at Mobile Deluxe and we can share some of our experiences creating and maintaining a cross-platform engine.