For years, major platforms like the Apple’s App Store and Google Play have dominated the market. However, recent regulatory worldwide changes are challenging this duopoly, opening the door for alternative app stores and a more competitive ecosystem.

This transformation benefits all players in the market. Developers and startups gain new opportunities for distribution, lower fees, and greater control over their monetisation strategies. Consumers, in turn, will enjoy more choices, better pricing, and access to a wider range of apps tailored to their preferences.

At GEM Capital, we are actively participating in this shift through our portfolio company, Skich, which recently announced its launch as an alternative iOS store. This has given us insights into how this new era of mobile distribution will shape the industry that we want to share.

The impact of regulatory changes

Recently, regulatory changes have been transforming app distribution by reducing the dominance of major platforms worldwide. This transformation began last year with the European Union's Digital Markets Act (DMA), which requires Apple to allow third-party app stores and sideloading on iOS devices within the EU.

This shift was followed by similar laws in Japan and Brazil. In the US, Google is now required to permit third-party stores within Google Play, further diversifying the market.

These regulations provide developers with more distribution options, lower commission fees, and better opportunities to reach a more ideal audience. This global shift marks a significant step toward a more competitive and open app ecosystem, transforming app distribution and enhancing the overall user experience. As a result, new app stores are emerging, offering specialised content to meet specific needs. For instance, Skich helps quench midcore players' thirst for new midcore games.

Opportunities for developers and entrepreneurs

For developers and entrepreneurs, these changes mean new business opportunities. The first thing that comes to mind here is store commission fees. Even industry major players like Epic Games and Microsoft are moving towards alternative stores to reduce those costs.

Naturally, for much smaller teams, it’s even more important. With lower fees from new stores, they can reinvest more funds into app development, enhancing user experience, or offering more competitive pricing.

Beyond lower fees, this shift allows developers to experiment with innovative features and target niche markets without the restrictions imposed by traditional app store guidelines. It enables a more personalised experience for users, fostering greater user loyalty and opening new doors for building a dedicated audience.

Benefits for consumers

The growing competition among app stores not only creates new opportunities for developers but also gives consumers greater choice, better pricing, and a more diverse selection of apps. With multiple stores available, users are no longer restricted to a single place, allowing them to explore a wider range of apps tailored to their preferences.

This shift mirrors the PC and console gaming market, where competition among platforms benefits users. For example, if you want to jump into Fortnite with your friends, you turn to Epic Games Store, while those seeking classic titles, like the first Heroes of Might & Magic games, head to GOG for nostalgia. Deal hunters take advantage of Steam’s seasonal sales or bundle discounts on Humble Bundle, while Nintendo fans stick with its ecosystem to access its exclusive titles.

As alternative mobile app stores gain traction, mobile gamers will experience the same freedom and flexibility enjoyed by their PC and Console counterparts. They’ll gain access to better deals, exclusive content, and specialised stores that cater to their specific gaming interests, enhancing their overall experience.

Innovation, monetisation, and user acquisition

Changes in app distribution are poised to redefine the industry's future, fostering greater innovation, diversified monetisation strategies, and new user acquisition (UA) approaches. Increased competition among app stores will encourage unique innovations in areas such as game discoverability, tailored personal recommendations, and social features, as platforms strive to differentiate themselves in a more dynamic market.

As part of this evolving landscape, developers are increasingly focusing on enhancing their monetisation strategies to remain competitive. According to a recent AppMagic's report on casual games, many are leveraging LiveOps and deeper monetisation techniques to boost long-term value. The emergence of alternative app stores further amplifies these opportunities, offering developers new distribution channels to diversify both their monetisation and UA strategies.

These new platforms can specialise in casual, midcore, or niche gaming segments, providing developers with the ability to tailor their strategies to each platform’s unique strengths. By leveraging these specialised stores, developers can target highly specific audiences, circumventing the limitations of traditional app stores.

This shift in distribution models becomes particularly valuable as developers navigate the post-IDFA era, offering them more flexibility in how they distribute, market, and monetise their apps.

We can certainly call it a revolution in app and game distribution. It’s just starting, but its impact is already transforming the industry. The future of app distribution is shifting toward a more diverse, competitive, and user-centric ecosystem – one that fosters innovation and creates new opportunities for all players in the mobile market.