Apple has seen its App Store revenue drop for the first time.
New data from Sensor Tower suggests revenue from the app marketplace dropped 5% year-on-year. Games revenue dropped by 14% as consumers began spending less time playing games.
According to Morgan Stanley, the drop in gaming revenue was the biggest reason for the overall fall in revenue. In its last earnings call, Apple said that year-on-year comparisons were still being influenced by strong demand for at-home entertainment during the COVID-19 pandemic, meaning that it was natural sales would begin to slow or drop off.
Another reason for falling sales is the rising cost of living around the world, with consumers tightening their belts amidst higher energy prices, gas prices, and food. It’s believed that most consumers are becoming more cautious over their spending, anticipating more challenging economic circumstances ahead.
The news comes at the same time as Apple hikes App Store prices in some markets, which could result in consumers cancelling their subscriptions and spending less on apps and in-app purchases.
Apple does not issue data on App Store sales, but analysts can read between the lines when the company announces revenues for its services arm. According to Morgan Stanley, the company will still see an 8% increase in revenue over the quarter, demonstrating growth in other areas despite falling App Store sales.
Are you surprised to hear this news? Let us know and check back soon for more!