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Google Play: Developers Make More From In-App Purchases Than App Sales

In 2012, developers using Google Play have pulled in more revenue from in-app purchases than from the sales of the apps themselves, a validation of the “freemium” model and digital purchases.

Google Play engineering director Brad Yerga disclosed the news in an afternoon session here at Google I/O, where Google announced it had surpassed 20 billion app downloads in total at its morning keynote. All told, there are more than 600,000 apps on the Play Store, with more than 1.5 billion downloads per month. Those figures still lag Apple, which claims that of the 650,000 separate apps included in its own app store, users have downloaded 30 billion.

But the real moneymaker, Yerga said, has been the “almost magic combination of carrier billing and in-app billing,” Yerga said, that has appealed on an international level and revolutionized the way app developers make money.

Google announced the Google Play brand last year, which encompasses both its app store, e-books, music, and movies. Google’s Android platform is also the world’s largest in terms of smartphone market share, giving Play a proportionally large share of the world’s consumers.

Although the United States still represents the largest market for Google Play app downloads, more and more overseas customers are downloading apps as Android aggressively expands overseas. About 67 percent of Google Play revenue comes from overseas markets, Yerga said; besides the United States, the largest Play markets are Japan, Korea, Germany, than France, he said.

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