Home How Many Apps Did Apple’s Incentivized Install Policy Change Affect?

How Many Apps Did Apple’s Incentivized Install Policy Change Affect?

Many iPhone app developers, specifically, game developers, looking to increase their apps’ visibility among the hundreds of thousands of applications available in iTunes today, have been using incentivized installs to increase their download numbers. These programs allowed end users who didn’t want to pay for in-app purchases and virtual goods another way to continue playing their favorite games. All users had to do was simply download an app from another developer, in return for credits which could be spent in the game they were currently playing.

But Apple recently changed its policy in this area, and will no longer allow publishers participating in these sorts of programs into the iTunes App Store due to what Apple said was “an excessive influence in the listing order or ranking on the App Store.”

How many games were potentially affected by this change? A new report from app store search company Xyologic aims to find out.

The Mobile Gaming Market as a Whole

To date, Apple has sold over 189 million iOS devices to date, and has delivered over 10 billion downloads, according to Apple’s latest quarterly earnings report. Many of these apps are free.

According to Xyologic’s data, which comes from an index of over 610,000 apps in iTunes, the Android Market, and Windows Phone’s Marketplace, 80.8% of all iPhone downloads during March 2011 were free apps. Also in March, there were 99.9 million downloads of free iPhone games. 39.9% of those games were free.

Among the paid offerings, most paid games are priced below $3.99, says Xyologic. But even at these low prices, the industry is booming, Xyologic says, citing research from mobile analytics firm which estimates the iOS and Android share of the U.S. video game industry in terms of revenue is now at 8%, or more than $800 million in 2010.

Outside of simply charging for the download, many developers have found success by embracing the “free to play” business model. In these cases, the apps are free, but users can purchase in-app upgrades and virtual goods while playing using real money. Games that are “free to play” generally attract a larger audience than those that are paid.

Games with In-App Purchases

While Xyologic can’t specifically track how many games had been using incentivized installs directly, it has been tracking the market of games using in-app purchases. This gives an overview of the market that has potentially been affected by Apple’s change. Obviously, not all apps offering in-app purchases use incentivized installs, but those that do would be in this group.

As of March, out of the 8,017 iPhone apps offering in-app purchases, 2,156 of them were free games with in-app purchases. This number is up from 709 in September 2010. As a percentage, it’s 10.8% of all free iPhone games (in the U.S. App Store, it should be noted.)

While those games with in-app purchases many be a small group, they have a disproportionate share of the App Store’s highest rankings: 94 out of the top 150 top free games (63%) are those offering in-app purchases. They also contribute to 42.17% of downloads in this range. But were these ill-gotten rankings and download numbers, as Apple claims? We will only know the answer to that in time, as the after-effects of the ban play out.

What this change represents, explains Xyologic, is the biggest interference by Apple into the app economy itself in recent months. It puts the “free to play” model into question, and may even help swing momentum in Android’s favor, the company speculates. Xyologic notes that it saw 28,963 apps debut in the Android Market in March, while 18,787 arrived in iTunes.

For what it’s worth, these are the top ten game publishers using in-app purchases in March 2011.

This report and other research is available here from Xyologic.com.

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