It's always good practice when reading opinion pieces like this to determine the writer's motivations. As a former Nokia executive and a guy who now makes his living off of consulting, he has a bit to gain by you believing his thesis. That may not make his point less valid, but it's something to keep in mind. The AppStore is only prime virtual shelf space if you make it to the top of any list, or get featured. An advantage of prominent status on shelves at retail stores is that people can just stumble upon your game without looking for it. For every ~100 apps that get such treatment on the AppStore, how many can only be accessed by explicit searching? So sure, the app store has some very nice shelf space, but most of the games end up in the virtual bargain bin that you must dig through to find anything of value. Despite all this negativity, I am working on my first game. I'm not concerned too much about news like the article Randall posted, or what I said, because I am not trying to build a business on top of the AppStore. I get the feeling that a fair amount of independent developers are in the same boat, although I wouldn't be surprised if they had aspirations of turning their hobby into a business. I'm working on this game as a hobby project, and will probably do the same with any games that follow. If there is any one lesson I would take from this article, it'd be that most small companies fail, and the iPhone is no longer a special case.
Just to add to that... Around 1/3 of our revenue is our own games, and 2/3 is sub-contract work for other companies... There are plenty of people wanting apps to accompany their websites/ big brands wanting games for marketing etc... At the moment these is no shortage of people asking for them, and while I somewhat agree with the comment about small companies failing; you are far less likley to if you actually identify where the revenue streams actually are, and spread your risk between sources (rather relying entierly on just revenue from sales of your own games)... We have like 6 of our own games, and 3 regular clients which helps us mitigate the risk of any one revenue source not working out as planned...
"Half of all developers will earn less than $682 per year." The thing with this statistic is it includes all the garbage apps, clones, 'game guides', fart apps, books, and other things that some developer put together in a single day. Developers like that one guy that was removed who had over 500 apps, submitting more than an app a day. Not to mention the fact that it is written as if a developer will make only a single app in a year, in which case they are just learning or they are working on a large project, or possibly they are just part time. It would be nice to see stats with those apps culled out, but it is near impossible with the shear number of apps on the store. I don't have a ton of data with my apps but the amount of polish put into an app does seem to correlate with its popularity.
Ya, and he lowered his first assessment by half becuause of apps like Doodle Jump. Why did he not do the same for all of the junk in the store?
What I got out of the article is that the mobile marketplace is huge, and there lots of money to be made...provided one is not too narrow minded. I think that's GOOD news, not "bad news". Share and enjoy,
I thought the article sucked. Ramble ramble, bla bla, this company "are idiots", 100 million is nothing, 35k average dev cost (average?)...I lost his point about 2/3 of the way through. There was a point, right?
@ schplurg: I believe his point was "everybody panic." Not quite what I would call a meaningful analysis, at any rate.
At first read, this article can be a little disturbing. But once you realize the guy is being all "doom and gloom" about the App Store economy essentially because it's not doing American Idol SMS level revenues it loses its bite. And that's a ridiculous comparison anyway. It's like saying it's not worth it to sell iceberg lettuce at the local grocer because the overall Candy market is so much larger and more profitable. He's comparing working in a niche market (with thousands to millions of customers) to the profits made in a "global phenomenon" market with millions to billions of customers). If you're working in iDevice development, you're already working in a niche market, albeit a large and growing niche, but a niche nonetheless. On the flip side, if this article discourages a few developers from finishing and releasing more crApps, that wouldn't be a bad side effect Q
The article is very poorly written and does detract from his thesis. His analysis is interesting, but there are some assumptions that he made. I agree that the median sales is closer to $2/day or even less. To be profitable at that level, you would have to spend no more than a week to develop each app. Given that games make up only part of the app store and are the most time consuming apps to make, there's still a chance to break even on the other side of the app store. With code reuse and minimal need for art assets, it's possible to build a successful business model. Game development is another story. For even a simple casual game, most devs can spend anywhere from 2-6 months. Even with a "short" development time, it'll be hard to recoup your investment if you're not on any top lists and you're selling less than 10 copies a day at 99c. And if you made your game in a month, that means it's probably a half-baked clone of a dozen other games that's trying to attract attention.
If you think there's no money in mobile games... I don't know what it is about the mobile gaming industry that invites so much speculation. From what I've seen, the rules are ultimately just like any other business. It's no secret that many start-ups fail. In order to truly succeed in the long-term, a company has to build a reliable customer base. That simply doesn't happen overnight, unless an industry is brand new. Succeeding in an established industry can take years. Crunching the numbers only shows one thing conclusively: the mobile gaming industry is at the end of a "gold rush" period. There is still a disproportionate number of hopefuls turning out sub-par product, failing to do research, failing to so much as put together a marketing plan, failing to communicate with their customers... These developers end up wringing their hands in despair and quitting after 1-2 years because their profits are poor. Unfortunately, for each one that quits, two more join the fray. And, of course, they make the numbers seem much worse than they are. I invite everyone to participate in a little experiment. Turn on your iPhone and visit the app store. Now, list all games by release date. Now, count any game that: -has a terribly unattractive name and/or icon -is obviously a sub-par knock-off -is, while not a complete knock-off, a lackluster entry into an overcrowded genre -looks like it was made on a ridiculously low budget (bad "programmer art" is usually a dead give-away) These games are, as a rule of thumb, not going to make a whole lot of profit. They are the vast majority. A tremendous amount of people who make no profits are going to skew an average much, much more than the fortunate few that have made a couple million dollars. If every hopeful developer who produces "doomed" games is included, any financial assessment is going to look absolutely catastrophic.
