The global in-app purchase market size reached a value of USD 195.74 billion in 2024. The market is expected to grow at a CAGR of 20.70% during the forecast period of 2025-2034 to attain a value of USD 1284.55 billion by 2034. Factors boosting market growth are increasing smartphone penetration, the growth of mobile gaming, and the rise of subscription-based models. As mobile applications continue to dominate the digital landscape, in-app purchases have become an essential revenue model for developers, offering a way to monetize free apps while providing consumers with a seamless, convenient purchasing experience. In this blog post, we will delve into the key factors driving the in-app purchase market, examine its segments, and explore the opportunities and challenges that lie ahead.
Global In-App Purchase Market Overview
In-app purchases (IAP) are digital goods or services that users buy within a mobile app. These transactions are an essential monetization tool for app developers, especially in the context of free-to-play apps, where users can download the app for free but are encouraged to make purchases within the app to enhance their experience. In-app purchases can include consumable items (like virtual currencies, boosts, or extra lives), subscriptions (like premium content or services), or non-consumable items (such as unlocking a feature or an item permanently).
The in-app purchase market has gained massive popularity due to the explosive growth of mobile apps and the increasing shift toward mobile-first experiences. With more businesses and industries embracing mobile technology, in-app purchases have become a core aspect of digital business models, contributing to both the app ecosystem’s financial success and user engagement.
Market Segmentation
By Operating System
Android
Android holds a dominant share in the global mobile operating system market. With millions of apps available on the Google Play Store, Android users make up a significant portion of the global in-app purchase market. The affordability of Android devices and their prevalence in emerging markets have contributed to the widespread adoption of in-app purchases. Gaming apps, especially in the Android ecosystem, see a high rate of in-app purchases, such as virtual currencies, character upgrades, and additional features.
The Android platform’s extensive reach, combined with its popularity in regions like Asia Pacific and Latin America, means that in-app purchases on Android devices will continue to grow, especially in categories like mobile gaming, social networking, and e-commerce.
iOS
iOS is synonymous with premium quality, and its loyal user base often has higher disposable incomes, making it a key player in the in-app purchase market. While Android leads in global market share, iOS apps often generate higher revenue per user, particularly in regions like North America and Europe. In-app purchases on iOS devices, such as subscription-based services, exclusive content, and virtual goods, are increasingly popular.
Gaming apps continue to dominate the iOS in-app purchase segment, with mobile gaming proving to be a major revenue driver. Additionally, apps in categories like entertainment, health and fitness, and e-commerce also contribute significantly to in-app purchase revenue.
Others
While Android and iOS dominate the market, other operating systems like Windows and HarmonyOS have smaller shares but are still notable contributors to the overall in-app purchase market. As these platforms grow in popularity and expand their user bases, especially in emerging regions, their contribution to in-app purchases is expected to increase.
By Type
Consumable
Consumable in-app purchases include items that users can buy and use once, such as virtual currency, lives, power-ups, or additional content. This segment is particularly prominent in mobile gaming, where players buy consumable items to progress in the game. The rise of microtransactions, where users spend small amounts repeatedly over time, has significantly contributed to the growth of consumable purchases.
As more users engage with mobile games and apps, the consumable segment will continue to thrive, driving market revenue and user engagement. The low-cost nature of consumables encourages frequent purchases, making them an attractive option for developers and a key driver of the overall market.
Subscription
Subscription-based in-app purchases are becoming increasingly popular across various app categories. With a growing preference for “pay-as-you-go” services, subscriptions allow users to access premium content or features for a specified period. This model is prominent in entertainment (e.g., streaming services), health and fitness (e.g., personal training or meditation apps), and productivity apps (e.g., cloud storage services).
Subscription models benefit both developers and consumers. For developers, they provide a consistent stream of revenue, while consumers enjoy continued access to services without needing to make repeated individual purchases. As more industries adopt subscription-based models, particularly in non-gaming apps, this segment will experience significant growth in the coming years.
By App Category
Gaming
Gaming is by far the largest and most lucrative app category for in-app purchases. The mobile gaming sector continues to explode globally, especially in regions like Asia Pacific, where gaming culture is strong. In-app purchases in gaming include virtual currency, upgrades, skins, premium characters, and other game enhancements. These purchases help enhance the gaming experience, which drives both retention and revenue.
As the popularity of mobile gaming continues to rise, in-app purchases in this sector are expected to account for a significant portion of the overall market, with mobile games being the primary driver of in-app purchase revenue.
Entertainment and Music
Apps in the entertainment and music industry have seen a rapid rise in subscription-based models. Users are increasingly turning to music streaming services, video-on-demand platforms, and digital entertainment apps. In-app purchases in this category often come in the form of monthly or yearly subscriptions to access premium content or exclusive features.
With the global demand for digital entertainment rising, particularly in light of recent shifts toward home-based activities during the pandemic, the entertainment and music segment will see continued growth, contributing significantly to the in-app purchase market.
Health and Fitness
Health and fitness apps, particularly those offering personalized training programs, meal plans, and progress tracking, are increasingly adopting subscription models. These apps may also offer consumable in-app purchases such as workout plans, virtual fitness classes, or nutrition supplements.
The surge in demand for health-related apps, accelerated by the global pandemic, has resulted in higher consumer spending on fitness services. As consumers become more health-conscious and continue to embrace technology for wellness, in-app purchases in this sector are poised for steady growth.
Travel and Hospitality
Travel and hospitality apps, including those related to booking hotels, flights, tours, and rentals, are also tapping into in-app purchases. While consumable purchases like exclusive deals or added services are common, subscription models in the travel sector are emerging as well. For example, users may subscribe to receive regular travel discounts, access to premium travel experiences, or membership-based services.
As the travel and tourism industry rebounds, especially in post-pandemic years, the role of in-app purchases in this category is expected to grow.
Retail and E-Commerce
In-app purchases have also revolutionized the retail and e-commerce industry. With the shift towards mobile shopping, users are increasingly purchasing products, digital goods, and exclusive offers directly within mobile apps. This trend is particularly evident in fashion, consumer goods, and e-commerce platforms like Amazon, where users frequently make purchases in-app to streamline their shopping experience.
Education and Learning
The online education and e-learning market is growing rapidly, with many platforms offering in-app purchases such as premium courses, educational materials, and virtual tutoring sessions. As the demand for online learning continues to rise, education apps are expected to increasingly rely on in-app purchases to generate revenue.
Regional Analysis
North America
North America, led by the United States, is a key player in the in-app purchase market. With a highly developed app ecosystem and a tech-savvy population, North America dominates in categories like gaming, entertainment, and health and fitness. The subscription model is particularly prevalent in this region, with users spending on streaming services, gaming apps, and productivity tools.
Asia Pacific
Asia Pacific is the fastest-growing region for in-app purchases, driven by countries like China, India, and Japan. The rise in smartphone penetration, coupled with a booming mobile gaming industry, makes this region a hotbed for in-app purchase activity. As more users in emerging markets embrace smartphones, in-app purchases will experience tremendous growth.
Europe
Europe is another significant region for the in-app purchase market, with steady demand for gaming, entertainment, and productivity apps. As consumers shift towards subscription models, in-app purchases in Europe are expected to increase across various app categories.
Market Dynamics
Key Drivers
- Smartphone Penetration: With increasing smartphone usage globally, more consumers are engaging with mobile apps, resulting in greater opportunities for in-app purchases.
- Mobile Gaming: The mobile gaming industry continues to grow, driving significant revenue through in-app purchases, such as virtual goods, upgrades, and consumables.
- Rise of Subscription-Based Models: Consumers’ growing preference for subscriptions (e.g., music, streaming, fitness) is fostering the growth of subscription-based in-app purchases.
Key Challenges
- Security Concerns: Ensuring secure transactions and protecting consumer data remains a critical challenge for app developers and platform providers.
- Regulatory Scrutiny: The rise of in-app purchases, particularly in mobile gaming, has attracted regulatory scrutiny in some markets. This could impact market dynamics and revenue generation strategies.
Opportunities
- Emerging Markets: As smartphone penetration continues to rise in emerging markets, developers have the opportunity to tap into new user bases.
- Innovative Technologies: Augmented reality (AR) and virtual reality (VR) are introducing new ways for consumers to interact with apps and make in-app purchases, opening new revenue streams.
Competitive Landscape
The competitive landscape in the in-app purchase market is dominated by major app developers, including companies like Apple, Google, Tencent, and Facebook. These players are constantly innovating to offer new and enhanced monetization models, including microtransactions, exclusive content, and personalized offerings.
