Apple set an advertising record in the week regulators came for its fees
One week held a shrinking in-app purchase pool, a record quarter for Apple's advertising line, and a British regulator proposing to cap what Apple may charge when a user pays somewhere else.
The pool is shrinking and the price of entry is rising#
A fox reads a field by its edges. When the quarry thins in the open and the hedgerow fills with competition, the calm animal changes ground rather than running harder at the same patch. App monetisation is standing in exactly that field this month, and most plans are still running harder.
Sensor Tower's H1 2026 Gaming Digital Market Index puts global mobile gaming in-app purchase revenue at 40 billion dollars, a 2 per cent decline period on period. Over the same half, gaming digital advertising spend reached 7 billion dollars, up 8 per cent, on 1.4 trillion ad impressions, up 14 per cent, measured across 41 markets and 18 channels, per Sensor Tower's own report page.
Read those three numbers in order and the squeeze is obvious. The money coming out of users fell. The money going into acquiring them rose. The volume of advertising needed to move that money rose faster still. Any mobile app marketing plan that held its cost per install flat this year was, in real terms, paying more for a smaller prize. That is the scent worth following, because app monetisation models built in 2024 assumed the opposite trail entirely.
Where the decline actually sits#
The fall is not evenly spread, which matters if your users are not evenly spread. PocketGamer.biz's read of the index records in-app purchase revenue down 7 per cent in the United States, down 10 per cent in both Japan and South Korea, flat in China and up 10 per cent in Europe. By genre, strategy took 9.3 billion dollars, puzzle 8.1 billion, role-playing 6.1 billion and casino 5 billion.
Europe growing while the United States falls is not a rounding error, it is a media plan. Note also that download figures were reported inconsistently across outlets covering the same index, so we have deliberately left them out rather than publish a percentage we could not settle.
Apple's advertising line just had its best June quarter ever#
On 30 July 2026, Apple reported quarterly revenue of 109.4 billion dollars, up 16 per cent year over year, with a gross margin of 50.1 per cent and diluted earnings per share of 2.02 dollars, up 29 per cent. Tim Cook called it "our strongest June quarter ever, with double-digit revenue growth across iPhone, Mac and Services, and in every geographic segment", per Apple's newsroom release. Roughly two percentage points of that margin came from tariff refunds, and 11 cents of the earnings figure with it.
The line that matters to anyone buying app store ads sits inside Services. Chief financial officer Kevan Parekh said the company "set revenue records in every services category, with June quarter records in advertising, the App Store, Apple Care, music and video", with Services revenue at 30.739 billion dollars, up 12 per cent, as PPC Land reported on 3 August.
Quarterly revenue
Up 16 per cent year over year, with double-digit growth in every geographic segment.
Services revenue
Up 12 per cent from 27.423 billion. June-quarter records in advertising and the App Store sit inside this line.
Gross margin
Includes roughly two percentage points attributed to tariff refunds.
Diluted EPS growth
Earnings per share of 2.02 dollars, of which 11 cents is attributed to tariff refunds.
Apple publishes no separate dollar figure for advertising. PPC Land notes third-party estimates placing Apple Ads at roughly 8.5 billion dollars a year, and we flag that as an outside estimate rather than a disclosure, because the difference matters when you are modelling a bid. What is disclosed, and what should shape your apple search ads plan, is the direction: a record June quarter for advertising inside a Services business growing at 12 per cent.
Britain proposes to cap the fee on app monetisation outside the store#
Into that squeeze walked the Competition and Markets Authority. Its consultation on a proposed steering conduct requirement for Apple's mobile platform ran from 8am on 30 June 2026 to 11:59pm on 28 July 2026, per the consultation listing on GOV.UK. A parallel call for evidence on near field communication access closed on 21 July.
The proposal would let developers steer users out of the app to complete transactions, and it does not stop at permission. The CMA's announcement states that it expects any steering fee to be lower than current app store charges, with the saving passed to UK customers or reinvested by developers. The case timeline, including final commitments dated 1 April 2026, sits on the CMA's Apple case page.
Writing on the Kluwer Competition Law Blog, Anush Ganesh of the University of Leeds sets out the framework's three principles: a cost-based element, a value-based element and administrative simplicity. The CMA's own view, quoted there, is that "a cost-based fee is likely to be significantly lower than Apple's current App Store fees, given the low-cost nature of operating a high-volume, platform-based app store". The framework leans on Kent v Apple [2025] CAT 67, in which the Competition Appeal Tribunal found Apple had set "an arbitrary fee".
Apple's filing is in, and Apple admitted that under the Ninth Circuit's definition of "necessary costs" they would charge 0% for purchases made via linkouts to the web. Apple proposed linkout fees of 15% for standard apps and 5% for Small Business Program apps.
One toll, taken at the gate
A purchase happens inside the app, the store takes its commission, and the developer's only lever is the price. Steering users to a cheaper route is restricted, so app monetisation is a single negotiation the developer does not take part in.
A toll that has to justify itself
Developers may link users out to complete a purchase. The platform may still charge, but the fee must be fair, reasonable and, on the CMA's stated expectation, below current store commission, with the saving passed to customers or reinvested. Price becomes a lever the developer shares.
Apple objected on 29 July. It called the proposed role for the regulator "highly intrusive" and argued the rules would "undermine innovation and investment", framing the fee restriction as price regulation. Apple also put numbers on the table: the App Store facilitated more than 46.5 billion pounds in UK billings and sales in 2025, of which Apple commissions accounted for less than 3.5 per cent of total transactions, as MacRumors reported and 9to5Mac covered the same day.
Apple is not alone in pushing back. In a filing dated 28 July 2026, Joseph V. Coniglio and Jack Nicastro of the Information Technology and Innovation Foundation argued the requirements would harm innovation without curing a real market failure, citing evidence that developers "maintained or raised their prices 90 percent of the time" after Apple reduced commission in March 2024. That figure is the sharpest argument against the CMA's savings logic, and it deserves to be answered rather than ignored.
Two networks now hold two-thirds of the money#
While the fee fight runs, the buy side has quietly concentrated. AppLovin and AdMob together command roughly two-thirds of gaming advertising revenue, and their combined share moved from 61 per cent to 65 per cent between January and May 2026. YouTube took 27 per cent of channel share globally over the same index period.
Concentration is not automatically a problem, but it removes the escape route that used to make app marketing forgiving. When two buyers hold two-thirds of the liquidity, a bad quarter on one of them is not diversifiable by shifting a slider. It has to be planned for in advance, with tested inventory sitting outside the pair before you need it.
| Region | Change in IAP revenue | What it changes in the plan |
|---|---|---|
| Europe | Up 10 per cent | The only growing major region. Localisation and EU pricing earn their cost here first. |
| China | Flat | Holding. Treat as a defend-the-base market, not a growth line. |
| United States | Down 7 per cent | Highest ad costs against a shrinking pool. Re-test payback windows before scaling. |
| Japan | Down 10 per cent | Steepest fall alongside South Korea. Review whether user acquisition still clears payback. |
| South Korea | Down 10 per cent | As Japan. High-ARPU assumptions written in 2024 need re-running. |
Put the pieces beside each other and the shape of the year is clear. Revenue per user is under pressure in three of five major regions, the cost of reaching those users is climbing, two networks control most of the inventory, and the one lever developers have never held, the store's cut, is now genuinely in play for the first time. App monetisation has been a fixed cost pretending to be a market, and the thicket is finally thinning.
Five moves before the app monetisation rules change#
A decision from the CMA is expected later in 2026, per Bratby Law's tracker of the steering requirements. That is enough runway to prepare and not enough to dawdle. The patient prowl beats the late scramble.
Rebuild your unit economics with commission as an input rather than a constant. If a steered transaction carried a materially lower fee, which of your currently unprofitable acquisition channels would clear payback?
A steering right is worthless without a payment flow to steer into. Stand up and test the external route now, while it is a project rather than a scramble against a compliance date.
Split your revenue forecast across Europe, the United States, Japan, South Korea and China. A single blended growth assumption is now wrong in both directions at once.
With AppLovin and AdMob near two-thirds of gaming ad revenue, run a standing test budget on alternatives so you have a proven fallback rather than a theory.
Put the CMA's expected decision in the roadmap with an owner. The commercial upside of a lower steered fee only lands for teams whose pricing and checkout are already built to take it.
None of this is a bet on the regulator winning. Apple may prevail, the fee may barely move, and the ITIF critique may prove right that savings never reach the customer. The point is that app marketing teams who model both outcomes will be ready either way, and teams who model neither will be repricing in a panic.
A cost-based fee is likely to be significantly lower than Apple's current App Store fees, given the low-cost nature of operating a high-volume, platform-based app store.
That sentence is the whole argument in one line, and it is why this is the most consequential month for app monetisation since the store model was built. Work the edges of the field now, while the ground is still moving, and keep the den stocked for either outcome.
Frequently asked questions#
What are the CMA's steering conduct requirements?
They are proposed rules that would require Apple, and in a parallel proposal Google, to let developers direct users out of an app to complete a purchase elsewhere. Apple could still charge a fee, but the CMA has said it expects that fee to sit below current app store commission. The consultation closed on 28 July 2026 and a decision is expected later in the year.
Is mobile app revenue actually falling?
In mobile gaming, yes. Sensor Tower's H1 2026 index puts global in-app purchase revenue at 40 billion dollars, down 2 per cent period on period, with the United States down 7 per cent and Japan and South Korea both down 10. Europe was the exception, growing 10 per cent.
Why did Apple object to the proposals?
Apple called the rules highly intrusive and argued they would undermine innovation and investment, characterising the fee restriction as price regulation. It said the App Store facilitated over 46.5 billion pounds in UK billings and sales in 2025, with commissions accounting for less than 3.5 per cent of total transactions.
How much does Apple make from advertising?
Apple does not disclose it. Its Q3 FY2026 release confirms June-quarter records in advertising and the App Store inside Services revenue of 30.739 billion dollars, up 12 per cent, but gives no advertising line. Third-party estimates put Apple Ads near 8.5 billion dollars a year, which is an outside estimate rather than a company figure.
Should I build an external payment flow before the rules are final?
Building it is low risk and the option has value regardless. A steering right delivers nothing without a tested checkout to steer into, and the teams that benefit fastest from any fee change will be those whose pricing, payment and support flows already work. Treat it as optionality, not as a bet on the outcome.
What does network concentration mean for user acquisition budgets?
AppLovin and AdMob together took roughly two-thirds of gaming advertising revenue, rising from 61 to 65 per cent between January and May 2026. That reduces the practical ability to move budget quickly when performance drops, so keep a standing test budget on alternative inventory rather than discovering options under pressure.
Read more on this topic#
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Want the unit economics modelled before the fee moves?
folkfox plans app marketing for products in awkward categories: app monetisation modelled with commission as a variable, acquisition tested outside the duopoly, and payback windows rebuilt region by region.