App Annie: Japan overtakes U.S. in app store revenue

Japan has knocked the United States out of the No. 1 spot in terms of monthly app store revenue, according to a new report from App Annie. The analytics firm's latest report showed Japan nearing $350 million in combined revenue across iOS and Google Play in October.

App Annie shows Japan passing the United States in monthly app revenues.

"If 2013 was the year where Japan's smartphone penetration caught up with the U.S., 2014 will be the year where it completely obliterates things," App Annie said. "The impact this will have on app downloads and revenue is a mouth-watering prospect for businesses invested in that region of the world."

In other findings:

  • Japan is catching up quickly with the United States in terms of smartphone growth, reaching 42 percent in 2013 vs. 44 percent in the U.S.
  • App spend on Google Play has skyrocketed in Japan to more than $200 million in monthly revenue, far outpacing growth in the rest of the world and closing the gap with iOS.
  • Spending on games grew 3.9x in Japan this year vs. 2.7x in the United States.
  • The leading mobile games publisher in Japan, GungHo Online, passed the 20-million download mark in October.

Does this mean developers should all start localizing their apps for the Japanese market as quickly as possible? Maybe. But App Annie's report points out that it's a bit more complicated than that. 

The most successful publishers in Japan are domestic and have local knowledge of the country's customer preferences. And some forms of marketing, like TV ads, seem to be more effective in Japan as well, as evidenced by the success of GungHo Online, Namco and others. Carrier billing also seems to be a powerful monetization model, now that Google Play has introduced it for some of Japan's major mobile carriers.

Finally, with DoCoMo now offering the iPhone, expect to see a lot more activity on the iOS app side as well.

For more:
- download the complete App Annie report here

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