The Realities of Selling On Apple's App Store 223
Owen Goss writes "Everyone is familiar with the story of the iPhone developer who spends two weeks of spare time making a game that goes on to make them hundreds of thousands of dollars. The reality is that with the App Store now hosting over 25,000 apps, the competition is fierce. While it's true that a few select apps are making developers rich, the reality is that most apps don't make a lot of money. In a blog post I take a hard look at the first 24 days of sales data for the first game, Dapple, from Streaming Colour Studios. The post reflects what is likely the norm for developers just getting into the iPhone development game."
Appstore apps are too limited (Score:4, Insightful)
The value of being brutally honest. (Score:5, Insightful)
What I am more interested in, is how many sales he gets after being "brutally honest" and then being posted on slashdot for doing so.
Crappy color matching game. (Score:5, Insightful)
What, a company makes YET ANOTHER crappy color matching game, and people are ASTONISHED they don't get rich?
What are they honestly expecting? If all you're going to do is repeat, for the nth time, yet another basic, basic, simple crappy puzzle game, you ARE NOT going to make much cash, or get much recognition.
Why is that a story? Just because it's an 'Apple's App Store' thing?
Release a crappy color matching puzzle game onto the web at large, and they'll probably do worse.
Gets right down to the most basic of basics: if you're not going to put the effort in, don't expect to get rewarded.
In terms of the story - make yet another crappy duplicate of yet another crappy puzzle game, become yet another crappy also-ran.
Color me shocked (Score:5, Insightful)
And how is that different from what happens IRL (or, as the cool cats are calling it now, AFK)? You enter a market, develop a product and compete with hundreds or thousands of similar offers. A couple will succeed, some will get by and most will flunk and disappear in its own mediocrity (averageness, ordinariness as a consequence of being average and not outstanding).
That is not the "[r]ealities of Selling On Apple's App Store", that's the reality of selling. People will copy your idea and sell. People will copy your product look and feel. The toughest ones will survive, the rest won't, but maybe will make enough money to keep the viability of their business choice. Or not. At all.
How is this different to any other market? (Score:5, Insightful)
The iPhone software market, like it or hate it, is like any other market. There is competition and only a few are successful. It's no different to the Windows software market or the Mac software market in this this.
Re:Very surprised and disappointed (Score:5, Insightful)
Don't think it alters your overall point, but I just wanted to make the point that there's a difference between mass-piracy (which may well be because your original product is too expensive) and one bored guy taking something and sticking it on a torrent site.
Re:Crappy color matching game. (Score:5, Insightful)
While the parent poster has clearly had too much coffee, the overall point made is valid. There are so many colour/pattern matching games available it's no surprise that this one failed to make an impact. It must be disappointing for the author, but he has to be honest with himself as to whether the game is actually any good and if there's any space in market for it at the chosen price point.
Obviously it would have been better if these questions had been asked and researched before spending six months and thirty-two grand on development; but what's done is done.
surprise (Score:5, Insightful)
While it's true that a few select apps are making developers rich, the reality is that most apps don't make a lot of money.
What a surprise. Not so different from the real world, is it? Where every now and then, some idea goes big and makes someone rich, and for every one such lucky guy, there's a thousand whose ideas never work out.
What's even the story here? "Some products sell real well, most sell average"? Why not take it further? "Bell curve distribution confirmed for the 4,000th time!"? :-)
Re:How Piracy Can Boost iPhone App Sales (Score:5, Insightful)
Reading an article on how piracy boost sales on torrentfreak.com is like reading about the Bush legacy on foxnews.com.
No surprise (Score:5, Insightful)
Wow, a color matching game. How incredibly groundbreaking. And it's only selling for five times the minimum application price. Sorry, but the value isn't there for a game of this simplicity. I've got two games under development, both immensely more complex than this, that I will sell for at most half the price.
So my appraisal:
1) Clone of a clone of a clone of the color matching / bubble popping games that can be written in less than a week. No surprise people aren't jumping up and down with excitement, or going out and buying iPhones so they can play this game.
2) Price is way, way too high for this game.
I do thank the author for his concise summary of sales though.
Re:article text (Score:5, Insightful)
If you do the math, you can see that I need to sell about 9,150 units in the U.S. before I break even on Dapple.
Then he should have done the maths before spending time developing the app, and either not bothered or worked out a way to reduce costs. Only a few apps get wildly successful and make everyone rich. Budgeting for over 1000 sales on a simple puzzle game running on a single platform is fantasy land.
Re:Appstore apps are too limited (Score:5, Insightful)
No the most telling thing about the Iphone store is that the app iFart has sold an insane amount.
Cater to the lowest common denominator and you got a goldmine. Cater to those that have a brain and you end up poor.
If you can figure out how to text real farts to other people no matter what phone they have, you have found a way to be far richer than bill gates.
Re:Very surprised and disappointed (Score:5, Insightful)
You think setting up bittorrent is easier than clicking buy on the appstore?
Bittorrent is *hard* for non-geeks who think port forwarding is something that boats do. Hell, I've yet to meet a non-geek who even knew what it is.
Re:Costs (Score:5, Insightful)
Seems a bit unlikely, but he says he paid contractors to do it.. that tells me he's not a programmer - a phone based puzzle game doesn't require multiple developers (and I'd love to know how they stretched development time to 6 months). So the project is paying at least two people, one of whom isn't actually doing any coding - effectively deadweight - and it goes on for far too long... and they wonder why it fails to make a profit. This isn't unique to the appstore, the world of business is full of ideas that failed in the same way. Hell, I've worked on a few...
Re:No surprise (Score:3, Insightful)
Although I wish you good luck with your two games, I don't think so directly correlating complexity and success is wise. Plenty of junk applications sell very well, and I'd argue that was more about pricing and image than complexity and quality.
I think the authors blog entry is a useful reminder that the app store isn't a way to print money, and that spending large amounts of cash on developing for it should be considered very carefully.
Re:Need feedback for LexLook! (Score:4, Insightful)
Look, the appstore is the market, not the advertising channel. Having a market available has simplified the process of getting your app to the user, and made it easier for users to find apps, but that is it. Compared to what things used to be like with Windows Mobile Apps and Symbian, it's a lot easier for me as a user to find what i am looking for, and the process of purchasing is a dream compared to anything in the past for any computing platform I have had.
But!
I still have to find out about your app. Which means YOU still have to market it. That isn't Apples job. I rarely rely on the whats hot tabs in the app store. I use references from other web sites, from searches, and from reviews. If you aren't out there doing your best to make sure someone else actually sees and talks about you app, then you have no reason to bitch.
Uless you consider bitching part of your marketing as the article poster seems to do. I am sure it might work, but considering the fact that he overpriced his app, and also seemed to overspend on something that couldn't reasonably recoup the cash makes me more likely to not by his game.
And you Mr. Xenodium, despite getting some points for highjacking a thread to sell your app, lose points for not even linking to it in you initial post. If all of the whiney app developers are as incompetent in marketing as you two, it's amazing they have managed any sales at all...
Re:Perceived value (Score:3, Insightful)
Re:Very surprised and disappointed (Score:3, Insightful)
There's always going to be people who can't afford something. In the past, sellers, as part of the free market, have had the freedom to set their own price to maximise profits and the commercial viability of their product. Not any more, thanks to piracy!
In a free market, a company has a lot of competitors and its prices are set by its costs, not its profits. I'll leave it as an exercise for the reader to consider how free various markets are (compare US and UK telecoms, e.g.)
Now, consumers can decide what they think is fair for the seller to have, regardless of the seller's wishes, needs, or financial health. While we're at it, we might as well make it legal (or at least morally A-OK) to run out of a retail joint with a physical object, leaving only the manufacturing costs behind.
"Profit" is a cost of manufacture; as Adam Smith so astutely pointed out, what we call 'profit' should rightly be called 'cost of capital', as it is normally either returned to shareholders who stumped up the capital, re-invested in staying competitive or some combination of the two. If companies didn't 'profit' they'd have no way to pay for capital and hence no company.
Paying the manufacturing cost is not simple; do you pay for the raw materials, the raw materials+cost of capital of machinery, raw materials+cost of labour, raw materials+cost of capital+cost of labour+cost of distribution? When you account for all the costs you have paid the market price.
I'm basically agreeing with you, but refining your argument.
No surprise it failed. (Score:5, Insightful)
Not sure why this is a shocker to anyone, lets look at the list:
If you notice, the one thing thats missing from that list when compared to your typical slashdot list is the 'Profit!' line.
The role of marketing. . . (Score:1, Insightful)
Everyone loves to hate marketter/marketing, but let's face it - no one is going to buy something they don't know exists.
10000 sales doesn't sound like that huge of a number to me. But, it's going to require marketing. I doubt this guy has money for a large/expensive advertising campaign, and if he did sink a lot of money into it, that would force him into the position of having to make lots more sales to cover the marketing investment, so he will need to be creative (and it sounds like he is trying to be).
Still, he *must* get his product more exposure to the iPhone consumer audience. There are what, several million iPhones in use around the world? If people really do like the game, as the author claims based upon reviews, then sales in the range of 10k to 50k copies seems like it should be an achievable objective without spending massive amounts of money on marketing, but some will definitely need to be spent.
Re:Very surprised and disappointed (Score:3, Insightful)
Yes, you can divide them that way, but it won't explain anything. The fact the very first sale was likely a pirate sale (I say likely, because an enterprising pirate would find someone on the inside to jack that file straight off the server) doesn't have anything to do with being able to afford it, but rather that _being the first to supply a pirate copy_ has value.
You can divide the group into purchased and "woulda-coulda", but the value of a pirated copy is different from that of a legitimate one. Unless the legitimate copy is intentionally crippled, it's worth more than a pirate copy. And cost isn't just a function of monetary price; it involves all the trouble needed to go through to get a copy.
In short: there are A. People for whom pirated copies are inherently better for whatever social value they bring (the pirate scenesters). B. People for whom pirated copies are so repugnant, they'll never consider it. C. People who are ambiguous about it, and will behave according to cost.
There's not much you can do about A. For B and C, however, the trick is to make as much value as affordable as possible while keeping revenue up.
The problem is that companies seem to think the trick is to sell as little value at the most competitive price. Cheapening the value of the (legitimate) purchase lowers the barrier to (illegitimate) distribution.
None of this helps the poor guy trying to sell his iPhone app.; I'm just saying that the dynamics aren't all unit price and piracy.
Re:Very surprised and disappointed (Score:4, Insightful)
Not that you're not right withthat sentiment, but just wanted to point out: five dollars is real expensive as far as iPhone games go, especially simple puzzle ones. The high price tag is probably the primary reason that he's not selling many of these things; I know plenty of devs that successfully sell simple games at the $1 level, and they are able to sell tons of them as long as the product is good (20 or 30 thousand is not unheard of, even if you're not a huge success). A couple hundred purchases means that you made some serious mistakes either in pricing or promotion.
The moment you charge anything for an app, you slash the number of "purchasers" to about 1/10 to 1/100 of what it would have been if it were free; if you go above $1, you're whittling that down much further unless your game has a whole lot of publicity or a brand name to prop sales up. Apart from Galcon, I can't think of many indie games that became even remotely popular for more than maybe $3 a pop.
I think the optimal price for almost every game on the iPhone (that is, every one without a franchise) is probably $1, but I'd really need to see more data to be sure of that.
Re:Textbook Case of Small Business Failure (Score:2, Insightful)
This guy took $32,000, built a product, launched it, and marketed it. He probably learned as much from this as he would in some class room. Not only did he learn something, but he is sharing what he learned. Its not easy to announce to the world that you were clueless, chased some hype, and took a bit of a beating.
Sticking $32,000 in the bank is a shameful alternative to growing some balls and jumping out into the "real" world. Next time he gets excited about something, he is likely to take a significantly better approach.
Re:Textbook Case of Small Business Failure (Score:4, Insightful)
I do wonder if this guy even knew Objective-C before starting this project. If he spent 6 months full time on this I could see that possibly he was first learning Objective-C and then working on the application. If he spent 6 months full time on this without any day job to get in the way I have to wonder what the hell he was doing all day long.
Re:surprise (Score:3, Insightful)
Sounds more like a power law than a gaussian. In other words, a few games are making most of the money, and then there's a lot of games making the rest of the money (long tail)
Re:Very surprised and disappointed (Score:3, Insightful)
Yah, because !free = too expensive.
Yah, because !free = too expensive.
No, seriously. It's not just the upfront cost, the $1 or $100 even, it's pulling out the credit card (not an issue for app store, but elsewhere), the EULAs, the non-returnability that makes you pissed when you bought the wrong thing, the time spent fighting its DRM, the time wasted in the future not able to fix the bugs on your own. Then consider than you have to try a few apps to find the one you really want.
Free apps don't have most of those hassles. They're all in the Debian archives (and similar would exist for any free platform) so install is seamless - zero-click simple. There's no DRM, no lock-in, no EULAs - they're totally benign in a business sense. There's no feeling of wanting to throw good-time after bad-money to make up for the purchase price - if you don't like it you move on with no regrets. The FOSS apps are coded to a standard - they don't leave crud all over your system. Most importantly you can get a third party to fix bugs or add features.
Can you imagine if anyone actually considered the cost of all this proprietary nonsense when doing TCO calculations. What does it really cost to read all the EULAs, check that they didn't change between versions, or re-read it from scratch, and actually follow the crazy restrictions, like figuring out how to prevent you employees from publishing unauthorized reviews (Oracle?), etc. Tracking installs, making sure a product isn't installed onto the wrong hardware (too many CPU cores, not an Apple-branded board, not allowed to run in a virtual machine, etc, etc).
Consider the case for switching to DRM if you weren't there already. "Hey boss, the publisher of ProgramX wants to install spyware with the app to make sure we use it correctly - can we do this and maintain confidentially for our patients?"
How about a kill-switch in the OS, or your critical apps. How much better would the program have to be than its competitors that you'd accept it despite being unable to guarantee it'll keep working. One bug with a licensing server marking your programs as invalid right in the middle of crunch time and you could be out of business.
So yes, non-free software is too expensive, even at $0.
Re:Very surprised and disappointed (Score:3, Insightful)
Not to arrogant, self-justifying pirates. To them, paying cost price is extremely simple. Just ignore costs of actually creating the original work, ignore any "profit costs", and there you have it! Free is a perfectly fair price for any digital work!
Re:Textbook Case of Small Business Failure (Score:2, Insightful)
My point also remains the same. He learned an important lesson about platform and distribution. If he is a fool for having learned the hard way, then so am I.
I had build a thin client website building tool that was far superior than anything on the market. I spent a tremendous amount of time on it (years) and spent money on resources. I invented an XML Object Request Broker because none existed and a dozen other technologies to make it work right. Only to discover that I couldn't compete with a simple page builder offered by Yahoo which probably didn't cost more than $15,000 for the initial version.
This guy tried to create a great color matching game where the market was flooded with other lesser (in his opinion) color matching games. I tried to create a great website builder where the market was controlled by other lesser (in my opinion) web building tools.
We both got fleeced. In hindsight, it seems easy to call. I believe the lesson's learned is more complex than what you are giving credit. The idea that you can simply launch an application, market it, and make money is very complex farce.
And yes, there is a "if every bar west of the Mississippi" scenario. Of course, I don't do games, but that is very much the game I play today. Its a game of chess and the customer is the king. Take a long hard look at Microsoft Office. Why do people buy that? Rinse, repeat (in a smaller market segment). You don't learn this game in school. $32,000 is cheap.