Japan passed the US as the market with the highest monthly app revenue for iOS and Google Play combined in October, according to app analytics firm App Annie.
Although no financial figures were provided, App Annie said growth in Japan increased more rapidly than many other major markets over the past year.
Google Play now matches the revenue generated by Apple’s App Store in Japan despite having been at less than half the value in October 2012. The revenue gap has also narrowed in the rest of the world, but at a slower rate.
App Annie partly attributes Google Play’s success in Japan to the use of direct billing from the country’s major operators NTT Docomo, KDDI and SoftBank since early 2011. Direct billing is well-suited to the Japanese market as consumers traditionally prefer cash to credit cards.
Games powered much of the revenue growth in Japan, with a 3.9 fold year-on-year increase in revenue, compared with a 1.3 fold increase for other apps. The rest of the world saw a 2.7 fold growth for games compared with 1.9 for non-game apps over the same period.
Japanese developers dominated game revenue with the top five publishers — GungHo Online, LINE, COLOPL, Sega and Namco Bandai — based in the country. These five firms generated around two-thirds of total revenue.
With fairly advanced feature phones available in Japan, smartphone penetration started to catch up with other markets in 2013, according to data from market research firm eMarketer.
While smartphone penetration was 28 per cent in Japan in 2012, it is now 42 per cent. This puts Japan close to the US, where penetration rose from 39 per cent to 44 per cent in the same timeframe. Smartphone penetration in Japan is expected to overtake the US in 2014.
The mobile phone digital content market in Japan included virtually no revenue from smartphones in 2009, but they now represent slightly less than a half.