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Question about profit

05-15-2011, 04:40 AM
#1
Joined: Feb 2009
Posts: 150
Question about profit

Ok here is something I don't get..

I see many games that have been sold over 1 million copies. Most of them are $1 apps but still... One million?! That's a big number.

Let's 'imagine' a story here. A dev and his $0,99 app selling 1million copys with no free promotion days interrupting his download counter - So all downloads have been payed ones. Important note, he had roughly $500 invested in this game so no serious financial damage here either..

Let's make a simple calculation;
1.000.000 x $0.99 = $999.999

Minus 30% for apple = $999.999 x 0.7 = $699.999,3

Of course he has to pay income tax (Not sure if that's the right word in english but it depends on wich country you live in. It can build up to 60% to my knowledge)

Let's go for the worst and take off 60%

$699.999,3 x 0,4 = $279.999,72


Still $279.999,72 - $500 = $279.499,72 clean in the pocket (unless i'm missing some serious costs here..)

Now back to the real world, these stories seem to happen frequently so
how is it possible that these kind of developers still can't make a living out of their hobby/job? - based on their stories here on TA

(If my calculations are wrong, can someone provide me with the right profit table based on this same story?)
05-15-2011, 04:43 AM
#2
Joined: Jun 2009
Posts: 10,505
here's why..

Quote:
Total Available Apps: 390824
http://appshopper.com/
Too much competition. A million downloads for a single paid app is not easy at all.

05-15-2011, 05:28 AM
#3
Joined: Mar 2011
Location: In a car
Posts: 324
In my country the taxes are 24%, 60% is a bit much!But yeah, it's hard to sell one mil, but not impossible!There are 390824 more than half are crap, 100.000 are fart machines), and the rest are birds games!Make a quality game, and promote it, to get the word spreading and you should be ok!

My Twitter:@Tudor
05-15-2011, 05:34 AM
#4
Joined: Feb 2011
Location: Isle of Wight, UK
Posts: 1,509
Nothing wrong with the math, apart from even the UK not taxing you that heavily.

The problem here is that only a tiny handful of games generate that sort of income. If a dev is going to make millions, it also has to be from a fairly simple game too - the bigger ones cost probably a lot more than you think to develop in the first place.

If you get a runaway success then there will be champagne corks popping all over the place, but it's not a valid business model to assume your game will do that, regardless of how good it is.

Our game (Great Little War Game) is a moderate success and that's probably where most decent developers live. The game has almost covered its costs and might even make a profit after a couple more months, but the AppStore is simply not a license to print money.
05-15-2011, 05:57 AM
#5
Joined: Mar 2009
Location: Oslo, Norway
Posts: 731
@Prozak you don't see many apps selling 1000 000+ at least not relative to the number of apps available. I recently posted the sales figures for my app Squid Drop in these forums. These are probably a bit better than what a lot of indies experience. The success stories are nice as inspiration but the fact is that the majority of developers (myself included) will never make money from the App Store, at least not if calculating work hours...

Last edited by NickFalk; 05-15-2011 at 06:00 AM.
05-15-2011, 06:29 AM
#6
Joined: Sep 2008
Location: Canada
Posts: 2,799
Quote:
Originally Posted by NickFalk View Post
the majority of developers (myself included) will never make money from the App Store, at least not if calculating work hours...
The majority of developers and yourself might want to reŽvaluate your business models because that makes no sense.

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05-15-2011, 06:49 AM
#7
Joined: Mar 2009
Location: Oslo, Norway
Posts: 731
Quote:
Originally Posted by starjimstar View Post
The majority of developers and yourself might want to reŽvaluate your business models because that makes no sense.
It's very simple: The size of the App Store market is not large enough to cater for the huge number of developers. There is simply not enough money going around for everyone to make an income. It's not as simple as changing the business model. This is not particularly uncommon, it as fairly common misconception that starting a business automatically creates an income.

Personally I'm doing all the development on my spare time as I have another job creating the an income to support my family and myself. I am not quite ready to throw in the towel. While I (for the most part) enjoy the development process I might have to reconsider whether the time and money I spend on App development is worth it at some stage.

Last edited by NickFalk; 05-15-2011 at 06:52 AM.
05-15-2011, 08:05 AM
#8
Joined: May 2011
Location: Germany
Posts: 83
Quote:
Originally Posted by NickFalk View Post
It's very simple: The size of the App Store market is not large enough to cater for the huge number of developers. There is simply not enough money going around for everyone to make an income.
At least not as long as a huge number of games/apps are very similar. Unless someone is a fan of a genre, people are not going to buy half a dozen of the "basically the same" type of game. This is even more true to utilities. If I bought one calculator and one editor, I don't need another one (and won't even look for it) unless something comes out that does what I need multiple times better than what I already have.

There's also the same problem that I saw happening in the "shareware" boom in the 80s and early 90s, when everyone was a developer (just like in today's age of blogs where everyone is a writer and journalist) and the initial profitability was quickly diminished by the flood of mediocre and shallow stuff that watered down the profit potential for everyone -- and eventually even killed people's interest in homegrown shareware altogether. I saw these events unfold from the perspective of both a reviewer (for printed magazines at the time) and a developer (I abandoned both fields in 1995), and somehow the AppStore gold rush reminds me of that.
05-15-2011, 08:05 AM
#9
Anyone can say what you will be making if app was in top ten in words chart?
05-15-2011, 08:22 AM
#10
I estimate that less than 200 apps since the inception of the App Store in 08 have sold over 1 million copies. The number is probably closer to 120. Apple released an All Time Paid Rankings List in the winter and if you know the sales figure for one or two of the apps on that list, you can estimate the rest. It is also VERY top heavy.

Some more recent stats revealed by a couple of devs on another board said they sold only about 10,000 copies / day in the top 10 overall US paid list. At that rate, they'd need to be in the top 10 for 100 days straight to break into the 1 mil copies sold. There are some consistent games/apps in the top 10, but there are very few that have lasted 100 days. Even Air Penguin has fallen to #24 today.

In the real world, there are a lot of hidden costs that you can't see. Advertising can cost 2-3x more than development costs, but no one is ever going to publicly reveal the most cost effective methods of advertising.


[edit]
Pre-Rankings change, rank #10 approx 6k copies/day, #7 approx 15k copies/day.

Last edited by MrBlue; 05-15-2011 at 11:34 AM.