• by Karlene Lukovitz  @KLmarketdaily, June 16, 2023

In Q1 2023, TikTok became the first mobile app ever to surpass $1 billion in worldwide consumer spend across iOS and Google Play in a single quarter, according to apps analytics firm Data.ai. 

The “Honor of Kings” game came in second, at $570 million, followed by YouTube, with more than $530 million.

TikTok is something of a unicorn when it comes to its business model.

In contrast with most other non-gaming apps, which derive nearly 70% of their worldwide sales from subscriptions, TikTok depends primarily on one-time in-app purchases — many of which are purchased as gifts for friends and family.

“The social video giant has built a large and loyal fan base, allowing it to forgo the reliability of the subscription model and instead rake in billions of dollars with TikTok coins,” notes Data.ai. “This is likely to have caught the attention of other social platforms that have not yet cracked monetization beyond ads.”

TikTok was the only non-gaming title among the top 10 by one-time purchase revenue in the U.S. in Q1, earning more sales than some of the world’s most popular games, including “Candy Crush Saga,” “Roblox” and “Pokémon Go” (ranking at top of page).

However, for most non-gaming apps, subscriptions — particularly mid-priced ones — are more important than ever.

More than70% of non-gaming in-app purchase revenue in the U.S. in Q1 was from in-app mid-tier purchases (priced between $10 and $100) — up six percentage points from Q1 2022.

In contrast, mid-tier in-app purchases account for just 42% of spend in mobile games, because consumers are more likely to purchase many low-priced items or splurge on high-priced in-app purchases at $100 or above.

Nearly half (45%) of all in-app purchase revenue from games in the U.S. are priced under $10. However, a substantial portion still comes from the highest-priced in-app purchases, at more than $100.