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Sensor Tower · Abraham Yousef · January 2025
AppLovin Bets Big on Casino Titles to Drive Future Apps Revenue
Though the majority of AppLovin’s top line performance is driven by ad delivery powered by AI, a significant portion of the company’s revenue still comes from in-app purchases in its many titles. Sensor Tower’s IAP revenue for AppLovin at the portfolio level generally moves in line with the company’s reported apps segment revenue. Casino titles have bolstered IAP revenue performance over the past year, particularly as the company ramped up its allocation of US digital ad spend towards promoting these titles. Conversely, its Lifestyle & Puzzle titles, which were extremely popular during the pandemic, have experienced significant declines in MAUs, engagement and IAP revenue.
Key Takeaways:
ST portfolio-level IAP revenue for AppLovin is highly correlated with the company’s reported apps segment revenue, boasting a correlation coefficient of .86 from 1Q20-3Q24
While AppLovin (and other mobile game publishers) saw tremendous growth in IAP revenue during the pandemic, that growth has largely decelerated over the past few years. Per ST data, AppLovin’s portfolio level IAP revenue from 1Q24-4Q24 declined an average of 2% YoY, per quarter, compared to an average of ~50% YoY growth, per quarter, in the same period in 2021 (1Q21-4Q21)
ST data shows that AppLovin’s Casino titles performed the best over the past year, with total IAP revenue for these titles up 12% YoY in 2024, compared to -4% for titles in its largest genre, Lifestyle & Puzzle, and -27% for Action & Strategy titles
Project Makeover, AppLovin’s top overall title by IAP revenue from 2020-forward, has seen a consistent decline in US MAUs over the past few years, which may have contributed to a commensurate deterioration in IAP revenue for the title in the same period. ST data shows that Project Makeover’s US MAUs and IAP revenue decreased an average of 27% and 20% YoY, respectively, per year, from 2022-2024
Project Makeover, Wordscapes and Matchington Mansion have struggled to retain users in the post-pandemic period, as evidenced by material declines in key engagement metrics. Average daily user time spent and sessions on Project Makeover, Wordscapes and Matchington Mansion in 2024 were down a collective average of 14% and 17%, respectively, compared to 2021
ST data shows that AppLovin may be more focused on growing mobile app adoption in its Casino titles rather than its Lifestyle & Puzzle titles. AppLovin allocated far less of its total US ad spend to Project Makeover in 2024, at 29%, down 12ppts YoY, while it increased its allocation of spend towards Casino titles (namely Cash Tornado Slots, Jackpot Master Slots and Jackpot Friends Slots) by 15ppts in the same period
For more information, request the full report from reports@sensortower.com.
Written by: Abraham Yousef, Senior Insights Analyst
Date: January 2025