Apple says “headwinds in mobile gaming” held back the App Store in its latest quarter, and expects this to continue into the holiday quarter.
Speaking on the company’s earnings call, CFO Kevan Parekh said the App Store’s performance for the three months to September was “similar to the prior year”, suggesting there’s been little growth.
“At the same time, we did see some headwinds in mobile gaming that we’ve talked about before and expect to see those continue into the December quarter,” Parekh said.
He also pointed again to “changes to the App Store business model in certain countries”, adding that in the US, Apple continues “to operate under a court ruling impacting the link-out transactions”. Apple flagged both factors in July, with the US ruling allowing developers to take payments outside the App Store without Apple taking its usual cut.
Apple doesn’t break out App Store revenue, but it is one of the biggest parts of its services business, and games are one of the biggest categories of App Store spending. Services revenue hit a record $31.6bn in the quarter, up 10% from $28.75bn a year earlier, but down from 15% growth in the same quarter last year.
Third-party estimates suggest the impact is already showing: US App Store spending fell 6% year-on-year in Q2, the first decline in a decade, according to Sensor Tower figures.
Apple expects services growth to slow again to between 8% and 9% in the December quarter, which it put down mainly to third-party licensing and foreign exchange.
Apple did, however, add that the App Store saw a record of nearly a billion average weekly visitors, and that paid subscriptions to third-party apps grew by double digits to a new high. Apple Arcade is also now bundled into iCloud+ plans in more than 100 countries and regions.
Overall, Apple posted revenue of $114.5bn for the quarter, up 12% and a record for the September quarter.
