Consumers worldwide spent $167 billion on in-app purchases (IAPs) in 2025, equivalent to roughly $318,000 every minute. According to Sensor Tower’s State of Mobile 2026 report, this spending was broadly split between non-gaming applications and games.
Of the total, non-gaming apps accounted for $85.6 billion, while games generated $81.8 billion. Generative artificial intelligence (AI) applications emerged as the biggest growth driver within the non-gaming category.
What is an in-app purchase and why does it matter
An in-app purchase is any digital item, feature or service that users buy within an application after downloading it. These purchases can range from game skins, battle passes and virtual currencies to AI subscriptions, cloud-storage upgrades, premium streaming plans and productivity tools.
Unlike traditional software, where users paid a one-time fee upfront, IAPs allow developers to generate recurring revenue by offering additional content, services and features over time.
The model has become a cornerstone of the mobile economy because it shifts the focus from acquiring new users to generating greater value from existing ones. It has also transformed how applications are designed and monetised, allowing companies to offer products free initially before encouraging users to pay for premium experiences, exclusive content or added convenience.
AI apps lead non-gaming revenue growth
Global IAP revenue from non-gaming apps rose from $70.5 billion in 2024 to $85.6 billion in 2025, representing 21 per cent year-on-year growth.
Of the roughly $15 billion increase:
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Generative AI apps contributed $3.5 billion -
Movies and TV applications added $2.2 billion -
Social media apps contributed $2.1 billion -
Utility applications generated $1.8 billion -
Multimedia and design software accounted for $1.4 billion
According to Sensor Tower’s report, ChatGPT dominated the AI category, both in terms of usage and revenue generation.
Of the $3.5 billion in additional IAP revenue generated by generative AI applications, approximately $3.4 billion came from ChatGPT alone.
Where does India stand?
India is emerging as one of the fastest-growing markets for generative AI applications.
According to the report, downloads of generative AI apps in India nearly tripled in 2025 compared with 2024. As usage rises, opportunities for monetisation increase as well.
Indian consumers spent $14.2 million on IAPs in generative AI applications in 2024. In 2025, that figure rose to $48.4 million, representing a 3.4-fold increase in a single year.
The trend suggests that Indian users are not only adopting AI rapidly but are also increasingly willing to pay for premium AI capabilities.
What is driving the growth?
One of the biggest drivers appears to be the industry’s shift beyond text generation into image and video creation.
In 2025, companies such as OpenAI and Google turned visual-content generation into a major battleground. Features such as ChatGPT’s GPT-4o image generation and Google’s Nano Banana model attracted millions of users.
These tools provided consumers with clearer reasons to subscribe, whether for creating AI-generated images, editing visuals or producing social-media content.
The launches were supported by extensive marketing campaigns and app-store promotions highlighting practical use cases, helping convert curiosity into paying customers.
If adoption continues to rise and usage increasingly translates into subscriptions and purchases, revenue growth could accelerate further in the coming years.
Beyond AI: Where else are users spending?
Movie and TV applications generate IAP revenue primarily through subscriptions, rentals and content purchases.
For social-media platforms, spending is largely driven by premium memberships and subscription services.
Utility applications monetise through premium features, ad-free experiences, cloud-storage plans and subscriptions. Google One is a prominent example.
Multimedia and design software, such as Filmora, generate revenue through digital add-ons, premium tools and advanced editing features purchased within the app.
Gaming shifts from acquisition to retention
The gaming industry saw a different trend in 2025.
According to Sensor Tower, global gaming revenue continued to grow for a third consecutive year, but downloads declined and user engagement remained broadly stable.
As a result, gaming companies increasingly focused on retaining existing users rather than acquiring new ones.
Developers relied more heavily on battle passes, virtual goods, premium content and re-engagement campaigns to maximise the lifetime value of existing players.
Global mobile game downloads fell from 53.4 billion in 2024 to 50.4 billion in 2025.
IAP revenue, however, rose modestly from $80.7 billion to $81.8 billion.
Which games generated the most revenue?
While casual and mid-core games continued to generate the highest IAP revenue globally, hybrid casual games emerged as one of the strongest growth categories.
The category recorded sharp revenue growth despite declining downloads, suggesting developers were becoming more effective at converting existing users into paying customers.
Hypercasual games were the only segment to record download growth in 2025. Titles such as Block Blast! and Mahjong Vita demonstrated that simple gameplay experiences continue to attract large audiences.
At the genre level, strategy games delivered the strongest revenue gains globally. They were also the only genre to record download growth across both Asia and Europe.
Puzzle games posted strong revenue growth in Europe, driven by titles such as Royal Match and Gossip Harbor. Meanwhile, shooter games gained momentum in Asia following launches such as Delta Force.
India’s gaming market
India largely mirrored global trends.
Mobile game downloads declined from 8.4 billion in 2024 to 8.18 billion in 2025. Despite the decline, IAP revenue increased from $339 million to $389 million.
Hypercasual games generated the highest number of downloads, while mid-core games remained the largest revenue category.
In 2025:
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Hypercasual games recorded 4.07 billion downloads -
Casual games recorded 2.3 billion downloads -
Hybrid casual games recorded 1.04 billion downloads -
Mid-core games recorded 613 million downloads
Revenue remained concentrated in mid-core titles, which generated $252 million in IAP revenue, followed by casual games at $125 million and hybrid casual games at $9.6 million.
What do the numbers suggest?
The data points to a broader shift in the mobile economy.
Whether it is a ChatGPT subscription, a premium productivity feature, a gaming battle pass or a cosmetic skin, consumers are becoming increasingly comfortable spending money on digital products and experiences.
Importantly, this shift is no longer confined to gaming.
For years, game developers refined strategies for monetising virtual goods and retaining users. Today, AI applications, streaming platforms, social-media services and productivity tools are adopting similar approaches.
The result is an app economy where success depends less on attracting millions of new users and more on convincing existing users that digital products are worth paying for.
As generative AI, subscriptions and premium digital services continue to evolve, the distinction between how gaming and non-gaming applications generate revenue is becoming increasingly blurred.
The $167 billion spent on in-app purchases in 2025 suggests consumers have already embraced that shift, and developers are likely to build further on it in the years ahead.
