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Mobile App Economics: Should You Build An App in A Niche?

| August 2, 2020

It’s no secret that games dominate app stores. They get all the attention, they top the charts, and they make millions of dollars – no wonder everyone wants a piece of that app pie. The problem is, that pie isn’t very big. There’s not enough to go around. Most gaming apps don’t make it to the top of the charts, much less make developers lucratively rich.

So, what’s an appster to do?

It all comes down to mobile app economics and what that means for venturing into new territories of gaming. Be adventurous and try a different pie. And you can do this by building apps in smaller, less saturated niches.

Why Mobile App Economics Indicates You Should Consider Building Niche Apps

1. Less competition

When it comes to gaming apps, competition is stiff. Over 14 billion downloads of game apps occurred in Q2 2020 and games made up 22.4% of the total number of apps on the Apple App Store alone. Smaller niches have far less a share of the App Store:

Food & Drink: 3.4% of total number of apps
Finance: 2.4% of total apps
Health & Fitness: 3.3% of total apps
Medical: 1.9% of total apps

Where would you rather be? (I admit, the fighter in me wants to say games, but my Spidey sense is telling me otherwise)

Where would you rather be? (I admit, the fighter in me wants to say games, but my Spidey sense with a PhD in mobile app economics is telling me otherwise).

2. Mobile app economics 101: Spend less time and make more money

Top gaming apps make millions of dollars. Other categories don’t make anything close to that, but don’t underestimate their earning power. According to a SensorTower 2019 report, subscription video on-demand apps earned nearly $1.3 billion in revenue last year. Netflix is a great example: It’s the second-highest grossing app in the world, earning close to $184 million in gross revenue thanks to its subscription-based model.

Although many other categories and sub-niches make up less than Games, consider this: games take months to build – and they cost a lot of money. In that same amount of time, you can build multiple apps that are much easier to manage and cost far less to build. If you play your cards right, developing a portfolio of apps can make you more money than you ever could with a single game.

3. Freedom to build what you love, while giving value to an underserved market

What’s that saying, do what you love and love what you do? The great thing about building niche apps is that you get to build something that you’re actually interested in. It’s an aspect of mobile app economics that often goes overlooked but does matter. This isn’t to say that game appsters aren’t interested in gaming, but it’s not for everyone. When you’re building an app in an area you’re truly passionate about, you’re more likely to succeed because you know exactly what that market is begging for. You know the market because you are the market.

How to Find An App Niche to Apply Your Understanding of Mobile App Economics 

Niche markets are all about breaking things down.

Food & Drink

Food & Drink can be broken down into areas of interest like restaurants and recipes. Then, they can be divided into even smaller categories like wine, type of food, courses (e.g., appetizers, desserts, main entrees), and even tips & advice, such as entertaining and food design. Recipes alone cast a wide net, with everything from gluten-free diets to paleo dishes. Love coffee? There’s even a coffee niche! Check out CUPS, an app for iOS and Android that’s all about helping you find the perfect cup of coffee in your city while supporting local businesses.



The Lifestyle category has just over 20,000 apps. But, break that down into niches like fashion, hobbies, spirituality, etc. and you’ve got even smaller markets you can tap into with much less competition. Morpholio Board is an example of an app in the interior design niche. Using AR, this app lets you envision your home in an entirely new way. Plus, it’s received widespread positive reviews and critical acclaim, getting ranked among “Best Apps” by the likes of Architectural Digest and HouseBeautiful. Or how about taking beautiful photos using the power of AI? Spectre Camera lets you take stunning long exposure photos in as easy a way as possible. Having won the iTunes developer “Best of 2019” award and Editor’s Choice, this is clearly an app that’s doing something right.


Health & Fitness

Similarly, there are tons of Health & Fitness apps, but they’re made up of a wide range of smaller niches: healthy eating and dieting, self-care, sleep aids, habit trackers, and cooking apps just to name a few. Need to find your inner peace? Calm has both guided meditations and sleep stories for an all-in-one approach to mindfulness that earned it a 2018 “Best of” accolade from iTunes. Want to keep track of your runs, bike rides, hikes, etc.? Let Strava be your fitness tracker.

With the success of top gaming apps, it’s very tempting to try your luck. But before diving headfirst into the mobile app economics involved in game development, ask yourself: Do I even want to develop games? And am I willing to risk it? Or are there other categories with better prospects? Games may be the place for you, but don’t be afraid to explore other areas, too. There are other markets out there – think on-demand service apps or e-commerce – just waiting for that new hit app to come along – and it could be yours.

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