Here is an interesting article, fresh and brand new: Full Analysis of iPhone Economics It's a long read but well worth it, especially for the developers that seem shocked by the state of the industry. It's too late to ask questions AFTER you fail, do the research beforehand. In most respects, Flickitty performed above average and my development costs were nowhere near the $35,000 stated in the article.
On the other hand, half of the apps on the store are quite poor quality with poor marketing behind them... Also I think the $35,000 development costs are also skewed somewhat... As our own games are relativley cheap (under $20,000), whilst the games that will deffinatally do well due to the liscence can get a budget of $100k +... I dont think it's fair to therefore ignore the skewed revenue, while still considering it viable to include the budgetry skews... Yeah sure gameloft can spend $200,000 on one title as they will likley make it back simply as they have a very strong brand identification; but similarily if I spend $5000 making an iPhone game, I can likley make a suirable return in a similar fasion (albeit with a smaller fan base than GameLoft, but the same principles apply)...
This guy is too verbose. The article is so long because only one out of every 5 paragraphs contains actual useful information. (Comparing iPhone App revenue to Pop Idol SMS revenue? really?) Agreed that $35k dev costs are too high an estimate. A very, very simple way to look at dev costs via eLance.com. Search for iPhone change status to include "closed" projects There have been 13.5k projects with the keyword iPhone in it. Of which 5,700+ are less than $500. Only 488 jobs have been more than $5k. The earliest job dates to 4/12/2008. There are at least 1/2 a dozen sites out there that offer similar services. There are 225k apps on the App Store, but there's a lot of crap on there developed for $500. I do completely support his warning to potential entrants into this field. The gold rush days are long over.
Some of the points do stand. Did he mean to say that traditional mobile phones downloads in java sell more than on the iphone and such?
When someone starts off a long article on app store economics with a topic called "ACTUALLY I LIKE APPS" it makes me think that the best he has to offer is an educated outsider's perspective. If he actually takes the time to explain to his audience why apps seem to be a good idea, we are not his audience.
Interesting. The one thing I agree with is that, as others have mentioned, the app store is no longer a gold rush... its become a competitive market just like everything else, but is that really a surprise? Generally speaking, the good and above average games rise to the middle ground or the top, while the 90% of forgettable games (no offense to anyone) gets pushed to obscurity. I think the allure comes from the fact that anyone can at least try. Not to mention I SERIOUSLY doubt the "average" app has a dev cost of $35,000... I think the upper echelon of successful games have higher costs, naturally because they take more time to create and polish. But that's also the beauty of being an indie dev. Making games for the guys in our team for ex is just fun to do... I'd be doing this in my free time regardless of our profits, so its not as easy as simply putting a price per hour on the work you put in.
I think that quality games do get noticed eventually. There are a lot of apps out there that litter the store but you can usually recognize the quality app once you notice it. That's where the marketing comes in. Devs who market their quality apps by being active on TA and similar sites, who engage with the fans are bound to gain some success. iPhoneGlobes' Chad is a perfect example of a dev who actively promotes his games.
So developing apps is not as profitable as SMS biz for american idol. And so is selling lemonades. But what is the point in telling the kid to start a company for mass production of canned carbonated soft drinks and giving the example of coca cola. Indie Developers fuel the engines of the AppStore and they are usually a bunch of guys who write the apps on their spare time. It's ony about creativity and development for them. After that its just a click on the submit button. Getting SMS deals for huge brands is not about development, it's about everything else. And about the lucky million dollar profit game that distorts the curve; If there is anything that distorts the curve, it's the thousands of crappy apps on the store that has been developed on 2 weeks to 2 months by two guys with a not-the-best-ever idea.
I'd believe you except for the popularity of threads that constantly ask how to improve sales, etc. You can't speak for everyone and say what drives the indie- I know I can't and I won't. I have my own agenda, my own ideals and my own problems. I agree with you. It isn't the million dollar game that is keeping me from getting recognition, it is the thousands of other crappy apps that are plugging up the app store. I don't use the term 'crappy' loosely, these are seriously worthless and crappy apps without an ounce of thought or inspiration. Some developers complain that their app only made $100... and my response is "really, you were able to sucker 100 people out of money for THAT pile of shit? You're lucky."
The eagerness to improve sales does not mean that you did it all for money. I even don't think that the lust for high sales itself is purely for the money.
To people who write long winded rants about how terrible the App Store is I really only have one thing to say in response- Show me one other market where $99 a year potentially buys you prime virtual shelf space to reach a market of over 100m devices capable of running your software. As much as people want to kick and scream over App Store revenues, there really isn't another market out there that even begins to come close with this level of accessibility. Of course, with that level of accessibility you're going to have loads of shitware, but all you have to do is make a great product and you will likely rise to the top. People with a great product and/or great marketing/business sense can make a ton of money even in the jungle of the App Store. Those who don't have those things, well, don't.
I think this is very well summed up... It has passed the point where a student can make a game and suddenly make £1Mill... But it is still a viable market in a business sense assuming you operate it as a business and actually have some marketing spend, have a certain quality level etc.
Key word being "can." There's been great, novel stuff featured by you guys on the front page that didn't end up making a "ton of money." And there've been plenty of simple/silly apps (i.e. Mario soundboard, iFart, FatBooth) that have managed to make a tidy pile of cash. Any new developer going into AppStore development should check any expectations at the door, and not go crazy investing lots of money/time up front unless they can afford to live with the possibility that their app will flop. The AppStore remains an incredible opportunity for the hobbiest and big company alike. And it's particularly appealing in that the love a developer pours into a game will heavily influence one's chance of success. But it's still a wild and largely unpredictable environment. If it wasn't, it wouldn't be nearly as exciting.
I am not surprised by the development budgets mentioned in the article. If anything, they will increasingly be seen as on the low side. Larger brand products will easily be spending north of US$100k. Like most markets in the games industry, the app store is a hit driven business. I don't see how that comes as a surprise to anyone?
This phenomenon isn't exclusive to the App Store though, if everything that was good saw guaranteed success I'd be enjoying season 12 of Arrested Development right now.
Strange that you say that. I just got into the show (fantastic btw) and I heard its getting more episodes or a movie? I didn't care enough to look into it, but someone might