4 ms·

Making A Living (Barely) On The iPhone App Store (aka The Numbers Post)

87 points by adamhowell 17y ago

outotrai 17y ago
I'm very interested in that sort of business model - selling real or virtual products within a free application. I remember reading an article last year (http://arstechnica.com/gaming/news/2009/06/eas-new-motto-please-pirate-our-games-er-storefronts.ars http://arstechnica.com/gaming/news/2009/06/eas-new-motto-ple...) wherein the CEO of EA Games claimed not to mind piracy of certain games which had products for sale in-game. Many websites and applications seem to be using it to great success - IMVU and the social site Gaia Online come to mind. Somehow it seems strange to me that users who are so hesitant to buy something outright will pour their money into it when it is ostensibly free.
- jfarmer 17y ago
  Every single Facebook game uses this model.
- access_denied 17y ago
  At advertising school I learned in first grade: "every product has an economical value (to the buyer) as well as an psychological one".
- cookiecaper 17y ago
  It's kind of like giving a free demo, really. It's the same principle. You give someone a taste but limit the experience and allow them to unlock everything for a fee. The difference here is that the fees are small and many, whereas in the old days it was just a one-time drop of $49.99, or whatever. This model adapts better to an online, social context because it seems less restrictive, allows participation by everyone, and you can choose how much you want to spend on the experience, and how much of the experience is worth unlocking, and what parts to unlock at what times. I think that it works well for systems like phone apps, where users just want to try something out before dropping much cash on it.
city41 17y ago
The reviews in the app store for Flower Garden tell another side to this story. For example: "It costs 2.99 just for the base app. It costs 99 cents for more pots. 99 cents for fertilizer (to get your flowers to grow faster, since some flowers take as long as a week) and now, for the new seeds of winter, you have to pay another 99 cents." That seems like a legitimate complaint. But his numbers do suggest the IAP helped a lot. I wonder if he could have found an even better balance and eaked out a bit more money.
- jfarmer 17y ago
  I don't understand those complaints -- if it's too expensive, you won't play it! It's the developer's responsibility to play around with pricing, etc. to see what maximizes long-term revenue. (Also, AFAIK, you can't charge less than $0.99 for an in-app purchase, and each IAP has to be identified uniquely.)
  - patio11 17y ago
    I don't understand those complaints If you recruit most of your customers from a population which steals most of their software, then aggressively socialize them to think the software which isn't convenient to steal yet is fairly priced at $1 and expensive at $3, and then ask their opinions about your business model, what were you expecting their opinions to sound like?
    - city41 17y ago
      This is the culture of the iPhone, 99 cents rules the day. The fact that the iPhone arrived at this is far more Apple's fault than the customer's. In the current iPhone world, 2.99 + a lot of 99 cent charges to essentially just use the app is outrageously expensive. Especially when you consider the app is a rather simple "toy." Just off the top of my head, Train Conductor is a full fledged (and beautiful) game, and it's entirely playable with no additional fees at 1.99. In comparison, Flower Garden really does come out looking ridiculously overpriced. My question is if he had priced his app more in line with what iPhone customers expect, would he have made more money? Or maybe he really did make more money by more "realistically" pricing his app to what he feels it is worth. The bargain basement iPhone app pricing is a huge problem, for sure, but it's not going away anytime soon. Is it better to just go along with it, or can you make more money by standing firm?
maxklein 17y ago
Everyone's sales have gone up 100% post christmas. It's now what he did. By the way, if anyone wants to get into iPhone development or has an app, send me an email, I know a lot of tricks I can tell you that I don't want to make public yet.
thinkbohemian 17y ago
Thought this was a very well written interesting article. What chart/graph software are you using, or is that a tool provided by apple? BTW, graphs without labeled axises are a huge pet peeve (you can thank a certain georgia tech professor for dropping me a letter grade for that one).
- llopis 17y ago
  I used AppViz for most of the charts (it's a great program to keep track of your sales and visualize them in different ways). The chart with colors it's just generated from Pages since I had to do some aggregating of the different IAP items myself. You're right about the lack of labels (that's how the program does it), but I made sure it was explained in the sentence following the first chart. I wanted to stress that the vertical axis is profit in US$ and not unit of sales (since Flower Garden is $2.99).
- azsromej 17y ago
  one of the greatest app store success stories will be AppViz

87 points by adamhowell 17y ago

I'm very interested in that sort of business model - selling real or virtual products within a free application. I remember reading an article last year (http://arstechnica.com/gaming/news/2009/06/eas-new-motto-please-pirate-our-games-er-storefronts.ars http://arstechnica.com/gaming/news/2009/06/eas-new-motto-ple...) wherein the CEO of EA Games claimed not to mind piracy of certain games which had products for sale in-game. Many websites and applications seem to be using it to great success - IMVU and the social site Gaia Online come to mind. Somehow it seems strange to me that users who are so hesitant to buy something outright will pour their money into it when it is ostensibly free.

jfarmer 17y ago
Every single Facebook game uses this model.
access_denied 17y ago
At advertising school I learned in first grade: "every product has an economical value (to the buyer) as well as an psychological one".
cookiecaper 17y ago
It's kind of like giving a free demo, really. It's the same principle. You give someone a taste but limit the experience and allow them to unlock everything for a fee. The difference here is that the fees are small and many, whereas in the old days it was just a one-time drop of $49.99, or whatever. This model adapts better to an online, social context because it seems less restrictive, allows participation by everyone, and you can choose how much you want to spend on the experience, and how much of the experience is worth unlocking, and what parts to unlock at what times. I think that it works well for systems like phone apps, where users just want to try something out before dropping much cash on it.

city41 17y ago

The reviews in the app store for Flower Garden tell another side to this story. For example: "It costs 2.99 just for the base app. It costs 99 cents for more pots. 99 cents for fertilizer (to get your flowers to grow faster, since some flowers take as long as a week) and now, for the new seeds of winter, you have to pay another 99 cents." That seems like a legitimate complaint. But his numbers do suggest the IAP helped a lot. I wonder if he could have found an even better balance and eaked out a bit more money.

jfarmer 17y ago
I don't understand those complaints -- if it's too expensive, you won't play it! It's the developer's responsibility to play around with pricing, etc. to see what maximizes long-term revenue. (Also, AFAIK, you can't charge less than $0.99 for an in-app purchase, and each IAP has to be identified uniquely.)
- patio11 17y ago
  I don't understand those complaints If you recruit most of your customers from a population which steals most of their software, then aggressively socialize them to think the software which isn't convenient to steal yet is fairly priced at $1 and expensive at $3, and then ask their opinions about your business model, what were you expecting their opinions to sound like?
  - city41 17y ago
    This is the culture of the iPhone, 99 cents rules the day. The fact that the iPhone arrived at this is far more Apple's fault than the customer's. In the current iPhone world, 2.99 + a lot of 99 cent charges to essentially just use the app is outrageously expensive. Especially when you consider the app is a rather simple "toy." Just off the top of my head, Train Conductor is a full fledged (and beautiful) game, and it's entirely playable with no additional fees at 1.99. In comparison, Flower Garden really does come out looking ridiculously overpriced. My question is if he had priced his app more in line with what iPhone customers expect, would he have made more money? Or maybe he really did make more money by more "realistically" pricing his app to what he feels it is worth. The bargain basement iPhone app pricing is a huge problem, for sure, but it's not going away anytime soon. Is it better to just go along with it, or can you make more money by standing firm?

maxklein 17y ago

Everyone's sales have gone up 100% post christmas. It's now what he did. By the way, if anyone wants to get into iPhone development or has an app, send me an email, I know a lot of tricks I can tell you that I don't want to make public yet.

thinkbohemian 17y ago

Thought this was a very well written interesting article. What chart/graph software are you using, or is that a tool provided by apple? BTW, graphs without labeled axises are a huge pet peeve (you can thank a certain georgia tech professor for dropping me a letter grade for that one).

llopis 17y ago
I used AppViz for most of the charts (it's a great program to keep track of your sales and visualize them in different ways). The chart with colors it's just generated from Pages since I had to do some aggregating of the different IAP items myself. You're right about the lack of labels (that's how the program does it), but I made sure it was explained in the sentence following the first chart. I wanted to stress that the vertical axis is profit in US$ and not unit of sales (since Flower Garden is $2.99).
azsromej 17y ago
one of the greatest app store success stories will be AppViz