Sub Club by RevenueCat · 2026-02-27

The Boom In Non-Game App Revenue And What's Driving It – Olivia Moore, Andreessen Horowitz

Short market-commentary episode (for RevenueCat's State of Subscription Apps report) with a16z AI partner Olivia Moore. Non-game app IAP grew 21% YoY and passed games; only ~$3.5B of the growth was generative AI, with short dramas, social, utilities and entertainment also growing. ChatGPT reset willingness to pay from ~$60/year to $20/month; AI apps monetize at ~2x pre-AI ARPU; usage-based and ultra-premium tiers (Grindr's AI matchmaker) capture whales. Advice: build opinionated vertical products that benefit when models improve. Few company-level tactics.

Play the episode

3 tactics

Grindr · B2C · gay dating app

Add a several-hundred-dollar monthly AI tier that does the swiping and matching

Dating app offers an AI that swipes and makes matches for you at several hundred dollars a month. Not aimed at the average user; aimed at the ~1% willing to pay for outcomes rather than product access, to narrow consumer surplus.

Unknownpricingupsell-expansion

Sub Club by RevenueCat · 2026-02-27

Short drama app startups Olivia has met

Make short dramas with AI to cut costs, then spend the savings on ads

Short drama apps now earn hundreds of millions; no per-company numbers

Several short-drama startups use AI to fully generate or edit their short dramas, producing them at much lower cost and spending more on marketing to distribute them.

Unknownfeature-developmentpaid-social

Sub Club by RevenueCat · 2026-02-27

AI consumer startups subsidizing model costs

Give costly AI features away free to grow fast

Fast growth, but unit economics usually catch up later

Startups grow quickly by absorbing model costs for end consumers, e.g. offering Nano Banana Pro image generation free ('giving away dollars for pennies'). Olivia compares it to the on-demand economy: works only with strong marketing/distribution and user lock-in so users can later be made profitable.

Mixedpricingproduct-virality

Sub Club by RevenueCat · 2026-02-27

Numbers mentioned

Who	Metric	Value	Context
marketNon-game (consumer) app in-app purchase revenue, worldwide, per Sensor Tower	growth rate	+21%/year approximate
marketPortion of non-game app revenue growth attributed to generative AI apps, per Sensor Tower	revenue	+USD 3,500M/year approximate
marketAI app in-app purchase revenue	growth rate	+3 x/year approximate
marketRatio of game to consumer (non-game) app in-app purchase revenue a decade ago; consumer apps have now passed games	share	6 x approximate
marketShort drama apps revenue	revenue	hundreds of millions of dollars approximate
benchmarkTypical ceiling of a pre-AI consumer subscription price	price	USD 60/year approximate
ChatGPT	price	USD 20/month	Anchored consumer willingness to pay
Grindr	price	several hundred dollars a month approximate	AI tier that swipes and makes matches for you
Grindr	conversion rate	1% illustrative	Share of users expected to buy the ultra-premium AI tier
aggregatea16z's top 50-100 consumer AI apps list vs pre-AI consumer app counterparts	arpu	2 x approximate	AI apps monetize at 2x (or more) the ARPU of pre-AI counterparts
aggregateSome AI companies a16z has seen or invested in	arr	USD 1Mper employee approximate	'a million plus in ARR per employee'