We all know Apple makes a ton of money from its App Store and iTunes Stores sales, but Google’s Android app revenue is not too far behind. At a Google I/O 2013 session, the company revealed figures related to Google Play revenues and as expected a huge chunk of the revenue is coming from in-app purchases.

Google's in-app revenues through Play Store are up a whopping 700 percent over the same period last year. A cursory look at the highest grossing apps in the Play Store will reveal several free apps which rely on in-app purchases for progress or game extras. Apps that use subscription models such as Pandora or any number of music streaming services have also seen a rise in revenue. According to Google, subcription apps are doubling inbound revenue quarter over quarter.

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Selling well

The session host and Google Play Product Manger for Commerce and Monetization Ibrahim Elbouchikhi said that the revenue trend would suggest in-app purchases or ‘freemium’ apps is the way forward. Elbouchikhi said his team plays a game called “Where’s Minecraft?” referring to the world-creation app, to compare how other apps with the same in-app revenue model are faring.

At I/O Google revealed a bunch of new additions to the Android platform and the company says that apps which make use of newer additions to the development tools have a much better chance at making more money. Google also said apps made for tablets have a higher purchase rate, up to 1.7 times higher, than those apps which work best only on phones. Of course, Google’s purpose is to make the Android tablets platform more attractive for developers. In this regard, now there's a special drop-down menu which shows apps optimised for tablets in the Play Store.

Elbouchikhi also said that the average revenue per user has also shot up 2.5 times in comparison to the figures for the same time in 2012. As Google looks to increase monetisation of apps, at least in comparison to Apple, it will need to spell out more such ‘incentives’ for developers.

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