Analyst: the decline in game revenue led to the biggest drop in Apple's App Store revenue in history

CTOnews.com, Oct. 4, it is reported that Apple's App Store revenue took a hit last quarter due to a decline in gaming revenue, but Apple's services as a whole will continue to grow.

Erik Woodring, an analyst at Morgan Stanley, an investment firm, reported Monday that net income from App Store fell 5% in September. His report is based on data from Sensor Tower, a company that tracks app downloads and sales.

As for the reasons behind the decline, Woodring pointed out that Apple customers may spend less on soft goods such as software because of inflation and other economic problems. Mainly, game revenue fell by 14%, while overall revenue fell by 5%, the biggest drop since 2015.

"We believe that recent App Store results make it clear that global consumers are reducing App Store spending in the short term as disposable income is redistributed to areas where demand is suppressed," Woodring said in a note.

Instead of reporting sales of the App Store App Store separately, Apple uses it as part of its services business. The company takes 15% to 30% of app purchases and in-app purchases on its devices.

CTOnews.com learned that Apple's services business generated $19.6 billion in revenue in the June quarter of 2022, up from $17.4 billion a year earlier.

Typical during the outbreak, Apple did not provide formal revenue guidance for the upcoming September quarter. However, Luca Maestri, Apple's chief financial officer, said the company did not expect its services division to grow by more than 12% in the quarter.

Morgan Stanley expects apple's total revenue from services to grow by 8% in the quarter ended September 30, 2022.

Apple's services include a range of products, such as AppleCare, maintenance, Apple One subscription, Apple Music, Apple TV+, Apple Card, and so on.