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How an app with 200,000 downloads led to developer homelessness

184 points by PixelRobot 14y ago

robomartin 14y ago
This is going to sound harsh. This story exposes a simple fact: These developers went at this in utter ignorance of the realities of business. If their goal was to put out a free app and not try to make a living off of it, then fine. I take it back. You don't need to know anything about business or making money to give shit away. If this is the case, don't complain and be very thankful that people around you are kind enough to support you financially and beyond. If, on the other hand, their goal was to offer a free product with IAP in order to earn money and make a living, well, their decision making reveals their level of business ignorance. Why is it that the competitors they refer to have such intense IAP approaches? Could it be because that's a pretty solid way to monetize your app? If my goal was to make money in that segment I'd certainly stop all coding and look at what others are doing in detail. I would not hold myself back due to ideological nonsense. If it is a business, it is about making money. If it is a hobby, it is not. So, yes, I would copy, borrow and mutate ideas from others who, before me, trenched the territory and became successful. The only exception to this is if you truly have in your hands one of these edge-cases that will succeed because it is so unique, entertaining and, yes, addictive. This also demonstrates a reality of FOSS (even though this was not OSS): In order to provide FOSS someone has to be earning a living somehow or the equation is never balanced. That's why FOSS is never really free (as in cost) because the development costs are being banked by someone. Linux, as an example, is probably the most expensive piece of code ever developed. This case was a simple failure to make the right business decisions and nothing more. That's how you end-up on the street and broke.
Shoomz 14y ago
It's an interesting article and I love how they're approaching app sales. There are some successes out there that are doing well with this sales model (the most recent download I've had like this is Outwitters: http://onemanleft.com/ http://onemanleft.com/). It is hard to see where the app sales ecosystem is going though (and if consumers will really dictate this path).
- engtech 14y ago
  Weird, Outwitters is listed as free on the one man left website, but iTunes has it as $0.99
jonny_eh 14y ago
I think it's important for stories like this to get out there to contrast with big successes like Super Meat Boy and Fez (which were featured in the awesome movie "Indie Game: The Movie").
- Jare 14y ago
  The Squids story reached some notoriety and is much more interesting: http://thegamebakers.com/money-and-the-app-store-a-few-figures-that-might-help-an-indie-developer.html http://thegamebakers.com/money-and-the-app-store-a-few-figur... Not exactly a failure story (their strategy eventually paid off I think), but certainly far from the big hits.
tarice 14y ago
It sounds like a major reason they've had such terrible conversion rates to the paid version is that nobody could figure out how to actually buy the game. Remember: When people want to give you money, make it as easy as possible. Hopefully they get some better conversion after their update: "There was an update available for the game, and after applying it, an “unlock the full game” message was added under the main logo."
rokhayakebe 14y ago
Change the game name, Change the action names, Change the colors (nothing else), Put the new thing on the appstore, Report results.
coryl 14y ago
1) Don't spend two years working on your iPad game before you ship it. Far too long a cycle. 2) As an indie dev, you're suppose to attack the easiest, lowest hanging fruit to build your income base. After you're past a point, you can take on ambitious long-term projects. Otherwise you are always depending on a "hit" title.
- bryanlarsen 14y ago
  That's basically what they did. They lived off the profits from solipskier (http://mikengreg.com/solipskier/ http://mikengreg.com/solipskier/) while building this game.
  - coryl 14y ago
    But it wasn't enough, which is one reason they're in the predicament now.
- Zimahl 14y ago
  1) Don't spend two years working on your iPad game before you ship it. Far too long a cycle. You have to wonder where Notch would've been if he hadn't sold Minecraft before he was "done". As flakey as he (all of us really) can be as a dev (he's admitted as much himself), he definitely needed people depending on him continuing work.
credo 14y ago
At first, 200,000 downloads sounded impressive, getting into the top apps lists is also impressive, but the problem is outlined in the second paragraph. >>Gasketball was released for free, with a one-time in-app purchase that unlocks the rest of the game offered for $2.99. The conversion rate to the paid version of the game sits at 0.67%. It seems like they should figure out why the conversion rate is low (e.g. perhaps the free version offers too much functionality for free, perhaps the free version quality is poor and users aren't motivated to pay more etc...)
- pdenya 14y ago
  >>“A common complaint on the release build of Gasketball was that even our friends couldn’t find out how to buy the game. Obviously that’s a huge problem and we’ve remedied that in this patch update that we just released,” Wohlwend said
- ktsmith 14y ago
  The reason the conversions are so low is covered in the story. The game doesn't make the fact that there's a full version very discoverable and provides enough content that many people probably didn't think there was any more to it.
- rom16384 14y ago
  Conversion rates around 1% are typical, but in this case even if the conversion rate was 4% (which would be very good) it would only translate to ~17k
nevinera 14y ago
This smacked of RIAA logic. It doesn't matter what your conversion rate is when your game is free - non-converts don't cost you money.
- mhurron 14y ago
  Where did they say it cost them money? They said they weren't getting any from selling anything.
  - nevinera 14y ago
    They kept complaining about their 'conversion rate' thoughout the post. Everywhere they talked about how they weren't selling enough, they couched it in terms of how many downloads they got.
- Zimahl 14y ago
  non-converts don't cost you money. They cost you money if they use your servers to transmit game info.
S_A_P 14y ago
I personally am pretty turned off to in app purchases. Most games are only getting worse. I cannot count the number of times that I have been approached by my 5 year old asking for me to "type in my name so I can have _______" while playing angry birds, jetpack joyride, or where's my water. The problem is that he doesn't realize that there is real money tied to that. To him, I just enter my iTunes password and the level/swag/etc that he wants magically appears. Most of these games are geared towards kids, and they may or may not understand this. IAP is a great way to disappoint children!!!
- chubbard 14y ago
  But I felt like the authors of this game realized how predatory most IAP are and while they didn't specifically say its disgustingly exploitive to children they did say they were trying to design a game that wasn't exploitive. After reading their article I'd say they are just giving away too much. I think the free to play X levels then pay to play more is not predatory IAP. It was bread and butter of the shareware scene for the better part of a decade during the pre-internet era. And that's what we're in right now with mobile that time period where the difference between amateur and professionals is invisible. So I think they're model is right they just aren't applying it correctly.
- btilly 14y ago
  Thank you for confirming my reasons for not letting my son play those games yet.
- gaius 14y ago
  I was hanging out with my old lady's 10-year-old niece the other day (technically I suppose my niece... whoah) playing iPad games, and it was amazing how often, without even really thinking about it, she ended up on a screen to buy something, or linked out to a website (the iPad launching the browser) to buy something. Being a good kid she just asked me how to get back to the game, but it was a real eye-opener as to the tactics being used by app devs now. I fully see the need to make money, but "tricking" people into purchases is not cool.
Zimahl 14y ago
While this is a sad story, I'm finding it hard to feel sorry for them. This is a prime example of excellent execution but poor marketing. First, I've never heard of this game an it looks pretty awesome. My wife and I loved The Incredible Machine and this seems like a great derivation on that. Second, it's iPad only so you are missing out on a ton of iPhone sales. I've bought stuff on my iPhone which I didn't on my iPad. It would be great if it sync'd between the two. Third, .67%?! You've made some poor design choices if you can't get more people to upgrade that that. Sounds like you gave away the buffet and not just a taste test. From the article author: I had downloaded the game based on the positive word of mouth, and had already enjoyed what felt like a wide amount of content without paying anything. I wasn’t even aware there was anything to pay for to unlock ... I learned I could buy the game .. I went looking for that option .. took me a few minutes to figure out how to pay ... This plug on Penny Arcade should give them a significant bump in revenue. Tycho and Gabe could talk up toilet bowl cleaner and the PA audience would go out and buy it in an instant.
- alanfalcon 14y ago
  I agree about the iPad-only choice being unfortunate. As for exposure: Surprisingly, Gabe and Tycho haven't managed to talk up themselves enough (IMO): http://www.kickstarter.com/projects/pennyarcade/penny-arcade-sells-out?ref=home_popular http://www.kickstarter.com/projects/pennyarcade/penny-arcade... With an hour and a half left, I'd expected this number to be three times larger than it is. Sure they "hit their goal", but when you set up that road map of stretch goals it seems like you're really hoping/expecting to hit $1M, and that doesnt look like a remote possibility.
  - Zimahl 14y ago
    Well, as far as Penny Arcade goes, their ads were non-intrusive and actually well targeted so it didn't make sense to pay not to see them. I think that was something that prevented this from really taking off.
  - ktsmith 14y ago
    I think they talked themselves up plenty, I don't think they made very good use of kickstarter. It is possible PA would have had significantly more success if they had put up each of their project stretch goals as individual campaigns. I would probably kick in for the automata and daughters projects but not for a reality tv show. Lumping everything together made it feel like a gamble as without enough people kicking in it's not very likely the projects you as an individual care about will make the cut.
alanfalcon 14y ago
Such a confused and poorly written article. The developers aren't homeless because they had 200,000 downloads... They're homeless despite 200,000 downloads because they're game developers and not salespeople and so didn't even consider that they have to actually make the sale! Apple and Google and Amazon provide the big parking lot where people show up and have money in-hand, but if you give away the goods and never ask for the money, of course you'll end up broke. I'm glad to see that the developers have taken some steps to change the situation, but from what can be gleaned from the article, it sounds like they're not really handling the situation well.
- juddlyon 14y ago
  The title was fishy, and within a paragraph I thought the same thing: "confused and poorly written."
  - picklefish 14y ago
    Not only that, but I thought this was a crappy no-name blogpost until I took a second look. I thought the Penny Arcade column was supposed to be some a well-researched column, with a higher standard than most game journalism out there. This is not that.
- mechanical_fish 14y ago
  What's wrong with the article, again? You seem to have learned the facts, and you seem to have gotten the point, and it seems to be the same point that I got, which suggests that the message is getting through clearly enough. So what's wrong? Are you unhappy because the article doesn't have a strong editorial slant, as your comment does? Do you wish the journalist had come right out and said, in paragraph one, "These developers are homeless because they have lousy sales skills"? I'll say three things about that. One: Some articles do have that style (ahem Zero Punctuation ahem), but others simply try to state facts and let the readers draw the conclusions. Two: The two styles work well together. The interviewer lets the principals tell their story, states some numbers for perspective, and politely adds a few important factual observations ("It took me a few minutes to figure out how to pay for the game, and I was specifically looking for the menu. There’s nothing shocking about the low amount of paid sales; the value proposition is never made explicit.") and then someone else - like you - draws a conclusion and drives the point home. It's a team effort. Three: If one makes a habit of using the stories one hears to overtly and publicly ridicule the storytellers, one's career as an interviewer won't last. People will clam up. This is a fact of human nature. Don't expect more from journalists than is possible. (There are journalists who are so talented that people happily visit with them in order to be ridiculed. This is a miraculous skill and I suspect it's particularly hard to pull off in games journalism: The people building the games have no need to appear in public at all, let alone risk ridicule. They're not politicians or celebrities.)
AznHisoka 14y ago
These guys are homeless? I'm willing to shell $1000 to buy ownership of the entire game :) But it sounds like they focused too little on making money. You can't give everything away for free. Give people a taste of the good stuff, but make them pay for the rest.
mbenjaminsmith 14y ago
I'm currently building a game company so I sympathize with these guys, but it sounds like most of this is self inflicted. 1. Development cycle is way too long. You have to move much faster in mobile, especially for a casual game. 2. Assume financial failure for each game. Doesn't sound very encouraging but you should never count on income from a new title, especially if you're trying out new ways of monetizing. 3. Keep a cushion. If you need to take some time off to contract then do it. Running out of cash isn't an option. 4. Don't leave customer acquisition to chance. It sounds like their customer acquisition strategy was based solely on app store visibility (and hope).
- shurane 14y ago
  At least they'll learn from this venture. Maybe avoid the mistakes made on their next such adventure.
larrik 14y ago
1) Depending on writing games for your income is foolish. Very few people make real money from games. 2) In-App Purchases come in 2 flavors: The kind that are permanent, and the kind that aren't. Apple doesn't tell you which one you are buying, which means that I just don't buy any, generally. 3) The few times I experimented with IAPs, my conversion rates were also total crap.
- TillE 14y ago
  There are tons of indie game success stories. Even more so if you count modest success from niche games. Jeff Vogel has been doing it since 1994, when finding an audience and taking payments on the internet was much, much harder. Making niche games actually strongly resembles more "serious" software products, because you have a group of potential customers who have a decent idea of what they want and a market that isn't providing it. If you're lucky, you'll find pages and pages of forum posts describing the sort of things they like. Expecting to make the next Angry Birds is stupid. But making games with the expectation of a decent income is entirely realistic, and just requires the same marketing skills as anything else.
tomku 14y ago
Sounds like they wanted to get the sales figures of the addictive IAP-dependent top-selling games, but without any of the actual psychology behind it. Doesn't work like that. The reason those other games were in the top 25 weren't just because they had IAPs - nearly every mobile game has IAPs nowadays, whether they're initially free or not. It was because they struck the "right" balance between entertaining and manipulative. In particular, most of the games/apps I've tried that use that "upgrade from free via in-app purchase" model make it annoyingly easy to upgrade. They remind you when you finish a level. They remind you when you start the app, and when you go back to the main menu. They have buttons for full-version features that just pop up a "Sorry, you need to upgrade to do that, click here to do so!" dialog. They beat you over the head with the idea of upgrading until you submit, and going by the sales figures, it seems to work. That's how they make conversions, and if you're going to leave that out you're probably better off pursuing a different style of monetization.
- thetrb 14y ago
  I agree and another point to consider is the price. I don't have any statistics for that, but I wouldn't be surprised if setting the price to 0.99$ would give them more overall income.
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smartician 14y ago
So their first game sold for $2.99 up front and earned them $20k-$40k for two years. I would call that successful. Then, for their second game, instead of sticking to what works, they made the decision to switch to a freemium model, and made the mistake of making the "free" mode too good, and neglected to advertise in-game that there even is a premium version to unlock. Many lessons to be learned here, but rather stunning that they weren't able to fix this much earlier, before becoming homeless.
- slantyyz 14y ago
  >> So their first game sold for $2.99 up front and earned them $20k-$40k for two years. I would call that successful. Depends on the context, especially considering the opportunity costs of having a higher paid job. The problem is that everyone thinks that you have to price games low to sell them. I regularly pay more than $5 for iPhone/iPad games if I know they're good. Hell, after years of paying through the nose for handheld console cartridges, even $15 is cheap to me.
  - smartician 14y ago
    I fully agree with you there. It just makes the decision to sell their new game as free with IAP even more questionable. They should have just sold the new game for $4.99 up front. Even if only a fraction of the people who installed the free game would have bought it, they'd still have most likely made tens of thousands of dollars in a week. If it hadn't sold at all, THEN I would have started thinking about a freemium model.
    - slantyyz 14y ago
      >> They should have just sold the new game for $4.99 up front. Yes. I think the tough part when you have a higher priced game is getting the word out there and getting written up in some major blogs. Personally I consider $1 or $2 games to be disposable. It's not much of a loss if they suck. Once you go into higher price points, I base my purchase decision on name recognition/reputation or word-of-mouth.
fijal 14y ago
I'm seriously sick with people complaining that the software they gave away for free didn't make them any money. Maybe we need a better business model for people who make other people's life better, but hey, at the point you make the decision to give away stuff for free, please don't complain. DISCLAIMER: I'm making Open Source software and I can (sometimes) make a living out of it. I'm trying not to complain too much though
revorad 14y ago
"It makes me sick to my stomach as it so transparently preys on the weaknesses like addiction and compulsion." You know what makes me sick to the stomach? Developers starving themselves to death because of a complete disregard to basic business sense and a misguided sense of righteousness. 5 easy steps to homelessness: 1. Spend years building products for a platform, where $1.99 is a high price. 2. Avoid doing even the most basic mental arithmetic to figure out how many units you need to sell at $1.99 to be able to pay rent. 3. Then set the price to zero, because you're a nice guy. 4. Sell in-app purchases for the super duper high price of $2.99, thus raising your customer's LTV to a magnificent $2.99. But, don't be an asshole. Ask for the upgrade politely and quietly, in the third screen of the settings. Remember, you don't work for $ZNGA! 5. Make it up in volume "We really want to stick to the ‘free and pay 2.99 to unlock’ model, but if only .5% of users buy our game, we’re going to have to figure something else out. It’s very malleable at this point. Perhaps we’re giving too much away for free, it’s really hard to say until we see more data.” 6. Look a bonus step no.6! If after following steps 1-5 you're still not quite homeless, then it's time for some more data collection. Spend another year or so A/B testing the gradients of your upgrade button. And oh maybe, your upgrade price is too high? Yeah, test that. Excuse me while I relieve myself of the agony of watching people do this over and over again. AAAAAAAAAARGHH!!! FOR FUCK'S SAKE, STOP IT!!!!! Why do developers worship Apple, but absolutely refuse to take the slightest hint from them on how to do business? Read this - http://www.joelonsoftware.com/articles/StrategyLetterV.html http://www.joelonsoftware.com/articles/StrategyLetterV.html And repeat after me: "Commoditize your complements." "Commoditize your complements." The app store is the most brilliant and brutal execution of this strategy. Apple is selling $500 phones - the most expensive phones - while simultaneously making developers fall over each other and well, go homeless, to make software for their platform to give away for free. As if that's not tragic enough, the celebration of the lottery winners has the public and developers believe that making apps is a great business to be in! patio11 has been trying to drill these things into people's heads for ages. But, all he seems to get is upvotes and not enough people getting his point. You don't have to suddenly go all Zynga on your users. There's a vast chasm between selling virtual sheep to addicted grandmas and giving away the farm for less than the price of a toilet roll. You can charge a good price, which does not depend on huge scale to pay the rent. Edited to add: Lest I sound like some smug business know-it-all on a high horse, I've made the same mistakes. Most of us are like this. We need to make a conscious effort to be good at business.
ja27 14y ago
The app was released seven days ago. I'd say 200,000 * 0.67% * $2.99 ($4,000-ish) is a nice first week for an indie game. Now I guess I know how I can get Penny Arcade to feature my next app. http://appshopper.com/games/gasketball http://appshopper.com/games/gasketball http://www.appannie.com/app/ios/gasketball/ranking/history/#store_id=143441&view=grossing-ranks http://www.appannie.com/app/ios/gasketball/ranking/history/#...
- TillE 14y ago
  Uh, wow. This seems to be entirely true, which makes the article outrageously misleading. That's a less than ideal launch if you've failed to monetize it properly, but obviously that was nowhere near the cause of homelessness.
- ctdonath 14y ago
  What? All that whining over one week? Sounded like it's been out there for months! Of course conversion rates are low - users haven't played thru the free content yet! This is really gonna sour sympathy for future stories of actual failures.
  - ja27 14y ago
    If I'm right, this was a fantastic job of link-bait. Users, especially parents, hate in-app purchases. But that's the way the app market has gone for now. So far I've been able to resist but except for educational apps (schools have the worst time paying for IAPs), I'll likely be doing a lot of freemium apps. So this hits a sweet spot to vent hate for IAPs and the freemium model. Great job guys.
    - ctdonath 14y ago
      Users hate in-app purchases Yup. For what little it's worth, "IAP" is a big red flag to me, a warning that the "free" app will prove annoying and/or expensive. I'll usually not download any with it, having learned the hard way (right or wrong) that at these prices it's better to pay the couple bucks up front and get the full clean app, than get "free" and have to wrangle with brokenness and intrusive ads and still end up having to pay.
slevcom 14y ago
Most apps, particularly games are limited to a few dollars, which requires them to basically be hits. Reaching out to tons of people to make a hit, is difficult and expensive. Giving a game away for free seems like an easy way to gain some marketshare. In practice it isn't enough. In other hit based businesses, companies use multi-faceted marketing strategies to get the word out, each one a lead bullet. Unfortunately for app developers, measuring marketing efforts through the iTunes funnel is almost impossible. Where do they come from? What's working? Nobody knows. Its difficult for marketing pros, let alone a pair of developers who spend all their time developing and not marketing. They just need to keep at it. Being an indie developer requires more than just developing. Marketing is part of the job. If they are determined enough they will get there. Its just tough to put 2 years into a project, thinking you are finished, and only realize you're at the halfway point.
salman89 14y ago
0.5% upsell sounds about right. In the app business you want to avoid a one time sale and focus on recurring revenue. There is a cap on growth, and revenues must be sustained by current users.
clarky07 14y ago
So many things wrong with this article and devs I don't know where to start. 1. Contract work sucks. You know what sucks worse? Being homeless. Do some work, get paid, save some runway, then get back to your game. 2. Man I'm having trouble making money on this thing I'm giving away for free. No kidding? If your app is free you should be making it really really obvious that there is more to be paid for that is really awesome, and then maybe have a button somewhere that actually allows your customers to give you money. 3. Don't spend 2 years on an app with an ARPU of a couple of pennies. The mobile app market moves really fast and you can't expect the revenue from this game to last you for the next 2 years unless it is a huge hit. 4. This app has been out for a week. This linkbait title is a joke. 200k downloads for a free app isn't that amazing, but it's not bad for a week. Even if it had 10 million downloads, they'd still be homeless as they won't be getting a check from Apple for this until October. Their stupid decisions over the past 2 years led to them being homeless. The success or failure of their launch week has nothing to do with it. Clicking to the article I assumed this was going to be a case of giving away something and server costs bringing them down. Nope. We just decided to not have jobs for 2 years, not do any contracting, and not having enough money saved ahead of time.
briandear 14y ago
This isn't a sad story it's another example of developers being good at code but terrible at business. If code is your livelihood, treat it as such. Misplaced idealism is dangerous. Besides, doesn't giving someone a free game feed into their game addictions? Game pricing shouldn't be subject to some moral code. It's a game: if people don't like the price, they don't have to play. This illustrates the problem with pirate software as well as pirate music and movies. People don't buy the cow if they get the milk for free.
- icebraining 14y ago
  It doesn't actually illustrate anything because the app's only been out for a week.
phatbyte 14y ago
I'm going to be honest here, I look at IAP games as spam. I don't care how much time you game took or how well it's designed, as soon as I see that I must buy coins/points to upgrade weapons, levels etc, the little 10 year old nes kid in me dies a little. Everybody is so worry about monetization and get rich that they forgot the fundamental rule on a game: Let it be fun and enjoyable, let it be immersive. How would you feel when you were young playing atari, nes, etc and something kept asking for your parents money to continue to play the game ? TBH I rather play 5-7 dollars straight away for a game that includes everything then 0.90 cents where everything is locked up. If DLC's are getting ridiculous on consoles, IAP is the apple store game cancer. It should go away.
- brazzy 14y ago
  The numbers say that yours is the minority view. Like it or not, IAP works really, really well. And it can be done in a way that does not compromise the game design. These guys tried to do the most simple variant of that (try before you buy), they just executed very, very badly. Heck, I wouldn't mind DLC at all if it provided decent value for money instead of costing $10 for a measly 1.5 hours of gameplay compared to the $60 for 40+ hours in the main game.
  - smackfu 14y ago
    Well, I think DLC lets a small minority pay much more than a developer would ever ask for as a sales price. Like a $50 iPhone game would be crazy, but people really do buy that much content. So even if most people do hate DLC... it just doesn't matter.
theDaveB 14y ago
Apple actually let's you have 2 versions of the game, one free with IAP and a paid version without IAP. Also I believe developers go with a IAP to unlock the full game to avoid having their game pirated and downloaded for free on jail broken devices. Dave
patio11 14y ago
There's multiple aspects of this story you can tweak such that the business becomes successful. Pick any one of them: 1) There is an extraordinarily lucrative market opportunity in iDevice contracting right now, which they allude to but mentioned that they avoided doing to keep momentum. Giving that living on a couch is presumably not momentum-enhancing, a two week consulting engagement would buy them another 6~24 months of runway at their imputed burn rates. 2) A platform/language/etc is not a death-til-us-part commitment. You can follow the money. Independent developers are not best served by the App Store, unless they get ridiculously fortunate with regard to its kingmaking economics. If you only have one chance to develop an application, you would be better served by developing for a platform where the median case pays the rent. 3) Don't develop video games. You're competing for the business of toxic people who hate paying money against the union of well-funded corporations (which have high production values and effective, ruthless monetization) and amateur hobbyist artistes (who have "that vision thing" and are willing to starve to deliver it for free). Try making something for more lucrative markets like, oh, businesses. 4) You may have deep psychological issues with comfort about charging people money. They seem to be fairly common in our community, which is unfortunate, and we seem to actively promote them, which is unfortunate++. You should first recognize that you are creating something with value for people (if not, stop) and then come to the immediate realization that, as a business, people trade value for money. (If you desire to do charity work, do it for more deserving people than gamers with iPhones and entitlement issues... and you should probably do it after having secured your ability to deliver on obligations to your family.) 5) If you've got a budget of 100 awesomeness points or focus points or whatever, spending 90 on your software and 10 on your business will have much worse results than spending 10 on your software and 90 on your business. Having people who can concentrate 100% on building software is a wonderful thing. They're called "employees" and they cost about $10k to $20k a month; you can pay for them after you've got a business. If you desire to work 100% on software, you desire to be an employee. 6) Burying the buy button three screens behind Settings: probably not ideal for conversion rate maximization. 7) Maximum customer LTV of $2.99: also not ideal. Consider anything you can do to increase this, for example, offering upsells on top of the base offering, cross-selling them to other things in your portfolio or things from others' portfolio for a percentage, or developing a permission marketing asset such as an email list. Some of these are very not viable on the App Store but I think I already gave you the advice for that. 8) If you sell X, look at the tactics used by successful sellers of X. If these tactics strike you as morally outrageous, don't sell X.
chubs 14y ago
I hope they read this (not sure if they will), but: Ads! I've a friend who gets approx $4/user/year from a non-game mobile app from ads through mobclix. I think it's a fair assumption that you'd get even more ad impressions on a game (as people spend more time in games), but even without that, 200k players * $4 each = a lot of money.
- aeiowu 14y ago
  I did read it and we're doing this exact thing right now, hope to have the update submitted tomorrow. -Greg
austinlyons 14y ago
+1 to devs in Iowa!! But maybe if Iowa wasn't so cheap, they would have started by charging for their app out of the gate.
georgeecollins 14y ago
The linkbait title is much more interesting then the actual article. This discussion is also much more interesting then the article. The obvious thing is that if you are self funding, don't bet everything on one game. No one knows what games will hit and what games won't. The best thing is to swing the bat a few times. As many have pointed out, it seems like these guys should experiment more with what they have. It's not clear at all that their situation is dire.
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colinplamondon 14y ago
They're now Top 200 Grossing on iPad- seems like they managed to trip their way into one hell of a marketing strategy. 1) Bitch about not making enough money because you boned your conversion funnel. 2) Get an article written about how you don't make enough money 3) Make money! Don't try this at home.
- aeiowu 14y ago
  We didn't. We were homeless! ;)
  - colinplamondon 14y ago
    Haha, well played!
belorn 14y ago
incentives are tricky and the story is showing what happens when you induce the wrong ones. They want to have "a free game", a "cheap upgrade" and a "only one upgrade needed". Three things that do not match. If they are going for a free game but that offers the enthusiastic 1% an payed to play upgrade, that upgrade can not be cheap. If they increase to 29.9$, their conversion rate would likely only go from 0.67% to 0.5%, but increasing profits by around 500%.
goggles99 14y ago
Where is the story here? You can have the best game in the world but if no one can figure out how to buy it - of course you will go broke. Isn't this common sense? I see you have finally figured this out (now that you are homeless). If that does not boost your revenues - Lower the price to 1.99 or $0.99. We are in a bad economy and $2.99 is not in the sweet spot by any means.
goggles99 14y ago
Take this link off or HackerNews. It is a fraud. Ctdonath summed it up beautifully... "1. The "buy" button was hidden. People who wanted to pay couldn't find it. People didn't even know there was anything to pay for. 2. The app has been out a week. Users haven't had time to play thru the free content and develop any desire for [unknown (see #1)] paid content. Made near all users sound like Scroogeish tightwads. Unfair."

184 points by PixelRobot 14y ago

This is going to sound harsh. This story exposes a simple fact: These developers went at this in utter ignorance of the realities of business. If their goal was to put out a free app and not try to make a living off of it, then fine. I take it back. You don't need to know anything about business or making money to give shit away. If this is the case, don't complain and be very thankful that people around you are kind enough to support you financially and beyond. If, on the other hand, their goal was to offer a free product with IAP in order to earn money and make a living, well, their decision making reveals their level of business ignorance. Why is it that the competitors they refer to have such intense IAP approaches? Could it be because that's a pretty solid way to monetize your app? If my goal was to make money in that segment I'd certainly stop all coding and look at what others are doing in detail. I would not hold myself back due to ideological nonsense. If it is a business, it is about making money. If it is a hobby, it is not. So, yes, I would copy, borrow and mutate ideas from others who, before me, trenched the territory and became successful. The only exception to this is if you truly have in your hands one of these edge-cases that will succeed because it is so unique, entertaining and, yes, addictive. This also demonstrates a reality of FOSS (even though this was not OSS): In order to provide FOSS someone has to be earning a living somehow or the equation is never balanced. That's why FOSS is never really free (as in cost) because the development costs are being banked by someone. Linux, as an example, is probably the most expensive piece of code ever developed. This case was a simple failure to make the right business decisions and nothing more. That's how you end-up on the street and broke.

Shoomz 14y ago

It's an interesting article and I love how they're approaching app sales. There are some successes out there that are doing well with this sales model (the most recent download I've had like this is Outwitters: http://onemanleft.com/ http://onemanleft.com/). It is hard to see where the app sales ecosystem is going though (and if consumers will really dictate this path).

engtech 14y ago
Weird, Outwitters is listed as free on the one man left website, but iTunes has it as $0.99

jonny_eh 14y ago

I think it's important for stories like this to get out there to contrast with big successes like Super Meat Boy and Fez (which were featured in the awesome movie "Indie Game: The Movie").

Jare 14y ago
The Squids story reached some notoriety and is much more interesting: http://thegamebakers.com/money-and-the-app-store-a-few-figures-that-might-help-an-indie-developer.html http://thegamebakers.com/money-and-the-app-store-a-few-figur... Not exactly a failure story (their strategy eventually paid off I think), but certainly far from the big hits.

tarice 14y ago

It sounds like a major reason they've had such terrible conversion rates to the paid version is that nobody could figure out how to actually buy the game. Remember: When people want to give you money, make it as easy as possible. Hopefully they get some better conversion after their update: "There was an update available for the game, and after applying it, an “unlock the full game” message was added under the main logo."

rokhayakebe 14y ago

Change the game name, Change the action names, Change the colors (nothing else), Put the new thing on the appstore, Report results.

coryl 14y ago

1) Don't spend two years working on your iPad game before you ship it. Far too long a cycle. 2) As an indie dev, you're suppose to attack the easiest, lowest hanging fruit to build your income base. After you're past a point, you can take on ambitious long-term projects. Otherwise you are always depending on a "hit" title.

bryanlarsen 14y ago
That's basically what they did. They lived off the profits from solipskier (http://mikengreg.com/solipskier/ http://mikengreg.com/solipskier/) while building this game.
- coryl 14y ago
  But it wasn't enough, which is one reason they're in the predicament now.
Zimahl 14y ago
1) Don't spend two years working on your iPad game before you ship it. Far too long a cycle. You have to wonder where Notch would've been if he hadn't sold Minecraft before he was "done". As flakey as he (all of us really) can be as a dev (he's admitted as much himself), he definitely needed people depending on him continuing work.

credo 14y ago

At first, 200,000 downloads sounded impressive, getting into the top apps lists is also impressive, but the problem is outlined in the second paragraph. >>Gasketball was released for free, with a one-time in-app purchase that unlocks the rest of the game offered for $2.99. The conversion rate to the paid version of the game sits at 0.67%. It seems like they should figure out why the conversion rate is low (e.g. perhaps the free version offers too much functionality for free, perhaps the free version quality is poor and users aren't motivated to pay more etc...)

pdenya 14y ago
>>“A common complaint on the release build of Gasketball was that even our friends couldn’t find out how to buy the game. Obviously that’s a huge problem and we’ve remedied that in this patch update that we just released,” Wohlwend said
ktsmith 14y ago
The reason the conversions are so low is covered in the story. The game doesn't make the fact that there's a full version very discoverable and provides enough content that many people probably didn't think there was any more to it.
rom16384 14y ago
Conversion rates around 1% are typical, but in this case even if the conversion rate was 4% (which would be very good) it would only translate to ~17k

nevinera 14y ago

This smacked of RIAA logic. It doesn't matter what your conversion rate is when your game is free - non-converts don't cost you money.

mhurron 14y ago
Where did they say it cost them money? They said they weren't getting any from selling anything.
- nevinera 14y ago
  They kept complaining about their 'conversion rate' thoughout the post. Everywhere they talked about how they weren't selling enough, they couched it in terms of how many downloads they got.
Zimahl 14y ago
non-converts don't cost you money. They cost you money if they use your servers to transmit game info.

S_A_P 14y ago

I personally am pretty turned off to in app purchases. Most games are only getting worse. I cannot count the number of times that I have been approached by my 5 year old asking for me to "type in my name so I can have _______" while playing angry birds, jetpack joyride, or where's my water. The problem is that he doesn't realize that there is real money tied to that. To him, I just enter my iTunes password and the level/swag/etc that he wants magically appears. Most of these games are geared towards kids, and they may or may not understand this. IAP is a great way to disappoint children!!!

chubbard 14y ago
But I felt like the authors of this game realized how predatory most IAP are and while they didn't specifically say its disgustingly exploitive to children they did say they were trying to design a game that wasn't exploitive. After reading their article I'd say they are just giving away too much. I think the free to play X levels then pay to play more is not predatory IAP. It was bread and butter of the shareware scene for the better part of a decade during the pre-internet era. And that's what we're in right now with mobile that time period where the difference between amateur and professionals is invisible. So I think they're model is right they just aren't applying it correctly.
btilly 14y ago
Thank you for confirming my reasons for not letting my son play those games yet.
gaius 14y ago
I was hanging out with my old lady's 10-year-old niece the other day (technically I suppose my niece... whoah) playing iPad games, and it was amazing how often, without even really thinking about it, she ended up on a screen to buy something, or linked out to a website (the iPad launching the browser) to buy something. Being a good kid she just asked me how to get back to the game, but it was a real eye-opener as to the tactics being used by app devs now. I fully see the need to make money, but "tricking" people into purchases is not cool.

Zimahl 14y ago

While this is a sad story, I'm finding it hard to feel sorry for them. This is a prime example of excellent execution but poor marketing. First, I've never heard of this game an it looks pretty awesome. My wife and I loved The Incredible Machine and this seems like a great derivation on that. Second, it's iPad only so you are missing out on a ton of iPhone sales. I've bought stuff on my iPhone which I didn't on my iPad. It would be great if it sync'd between the two. Third, .67%?! You've made some poor design choices if you can't get more people to upgrade that that. Sounds like you gave away the buffet and not just a taste test. From the article author: I had downloaded the game based on the positive word of mouth, and had already enjoyed what felt like a wide amount of content without paying anything. I wasn’t even aware there was anything to pay for to unlock ... I learned I could buy the game .. I went looking for that option .. took me a few minutes to figure out how to pay ... This plug on Penny Arcade should give them a significant bump in revenue. Tycho and Gabe could talk up toilet bowl cleaner and the PA audience would go out and buy it in an instant.

alanfalcon 14y ago
I agree about the iPad-only choice being unfortunate. As for exposure: Surprisingly, Gabe and Tycho haven't managed to talk up themselves enough (IMO): http://www.kickstarter.com/projects/pennyarcade/penny-arcade-sells-out?ref=home_popular http://www.kickstarter.com/projects/pennyarcade/penny-arcade... With an hour and a half left, I'd expected this number to be three times larger than it is. Sure they "hit their goal", but when you set up that road map of stretch goals it seems like you're really hoping/expecting to hit $1M, and that doesnt look like a remote possibility.
- Zimahl 14y ago
  Well, as far as Penny Arcade goes, their ads were non-intrusive and actually well targeted so it didn't make sense to pay not to see them. I think that was something that prevented this from really taking off.
- ktsmith 14y ago
  I think they talked themselves up plenty, I don't think they made very good use of kickstarter. It is possible PA would have had significantly more success if they had put up each of their project stretch goals as individual campaigns. I would probably kick in for the automata and daughters projects but not for a reality tv show. Lumping everything together made it feel like a gamble as without enough people kicking in it's not very likely the projects you as an individual care about will make the cut.

alanfalcon 14y ago

Such a confused and poorly written article. The developers aren't homeless because they had 200,000 downloads... They're homeless despite 200,000 downloads because they're game developers and not salespeople and so didn't even consider that they have to actually make the sale! Apple and Google and Amazon provide the big parking lot where people show up and have money in-hand, but if you give away the goods and never ask for the money, of course you'll end up broke. I'm glad to see that the developers have taken some steps to change the situation, but from what can be gleaned from the article, it sounds like they're not really handling the situation well.

juddlyon 14y ago
The title was fishy, and within a paragraph I thought the same thing: "confused and poorly written."
- picklefish 14y ago
  Not only that, but I thought this was a crappy no-name blogpost until I took a second look. I thought the Penny Arcade column was supposed to be some a well-researched column, with a higher standard than most game journalism out there. This is not that.
mechanical_fish 14y ago
What's wrong with the article, again? You seem to have learned the facts, and you seem to have gotten the point, and it seems to be the same point that I got, which suggests that the message is getting through clearly enough. So what's wrong? Are you unhappy because the article doesn't have a strong editorial slant, as your comment does? Do you wish the journalist had come right out and said, in paragraph one, "These developers are homeless because they have lousy sales skills"? I'll say three things about that. One: Some articles do have that style (ahem Zero Punctuation ahem), but others simply try to state facts and let the readers draw the conclusions. Two: The two styles work well together. The interviewer lets the principals tell their story, states some numbers for perspective, and politely adds a few important factual observations ("It took me a few minutes to figure out how to pay for the game, and I was specifically looking for the menu. There’s nothing shocking about the low amount of paid sales; the value proposition is never made explicit.") and then someone else - like you - draws a conclusion and drives the point home. It's a team effort. Three: If one makes a habit of using the stories one hears to overtly and publicly ridicule the storytellers, one's career as an interviewer won't last. People will clam up. This is a fact of human nature. Don't expect more from journalists than is possible. (There are journalists who are so talented that people happily visit with them in order to be ridiculed. This is a miraculous skill and I suspect it's particularly hard to pull off in games journalism: The people building the games have no need to appear in public at all, let alone risk ridicule. They're not politicians or celebrities.)

AznHisoka 14y ago

These guys are homeless? I'm willing to shell $1000 to buy ownership of the entire game :) But it sounds like they focused too little on making money. You can't give everything away for free. Give people a taste of the good stuff, but make them pay for the rest.

mbenjaminsmith 14y ago

I'm currently building a game company so I sympathize with these guys, but it sounds like most of this is self inflicted. 1. Development cycle is way too long. You have to move much faster in mobile, especially for a casual game. 2. Assume financial failure for each game. Doesn't sound very encouraging but you should never count on income from a new title, especially if you're trying out new ways of monetizing. 3. Keep a cushion. If you need to take some time off to contract then do it. Running out of cash isn't an option. 4. Don't leave customer acquisition to chance. It sounds like their customer acquisition strategy was based solely on app store visibility (and hope).

shurane 14y ago
At least they'll learn from this venture. Maybe avoid the mistakes made on their next such adventure.

larrik 14y ago

1) Depending on writing games for your income is foolish. Very few people make real money from games. 2) In-App Purchases come in 2 flavors: The kind that are permanent, and the kind that aren't. Apple doesn't tell you which one you are buying, which means that I just don't buy any, generally. 3) The few times I experimented with IAPs, my conversion rates were also total crap.

TillE 14y ago
There are tons of indie game success stories. Even more so if you count modest success from niche games. Jeff Vogel has been doing it since 1994, when finding an audience and taking payments on the internet was much, much harder. Making niche games actually strongly resembles more "serious" software products, because you have a group of potential customers who have a decent idea of what they want and a market that isn't providing it. If you're lucky, you'll find pages and pages of forum posts describing the sort of things they like. Expecting to make the next Angry Birds is stupid. But making games with the expectation of a decent income is entirely realistic, and just requires the same marketing skills as anything else.

tomku 14y ago

Sounds like they wanted to get the sales figures of the addictive IAP-dependent top-selling games, but without any of the actual psychology behind it. Doesn't work like that. The reason those other games were in the top 25 weren't just because they had IAPs - nearly every mobile game has IAPs nowadays, whether they're initially free or not. It was because they struck the "right" balance between entertaining and manipulative. In particular, most of the games/apps I've tried that use that "upgrade from free via in-app purchase" model make it annoyingly easy to upgrade. They remind you when you finish a level. They remind you when you start the app, and when you go back to the main menu. They have buttons for full-version features that just pop up a "Sorry, you need to upgrade to do that, click here to do so!" dialog. They beat you over the head with the idea of upgrading until you submit, and going by the sales figures, it seems to work. That's how they make conversions, and if you're going to leave that out you're probably better off pursuing a different style of monetization.

thetrb 14y ago
I agree and another point to consider is the price. I don't have any statistics for that, but I wouldn't be surprised if setting the price to 0.99$ would give them more overall income.

deleted 14y ago

[deleted]

smartician 14y ago

So their first game sold for $2.99 up front and earned them $20k-$40k for two years. I would call that successful. Then, for their second game, instead of sticking to what works, they made the decision to switch to a freemium model, and made the mistake of making the "free" mode too good, and neglected to advertise in-game that there even is a premium version to unlock. Many lessons to be learned here, but rather stunning that they weren't able to fix this much earlier, before becoming homeless.

slantyyz 14y ago
>> So their first game sold for $2.99 up front and earned them $20k-$40k for two years. I would call that successful. Depends on the context, especially considering the opportunity costs of having a higher paid job. The problem is that everyone thinks that you have to price games low to sell them. I regularly pay more than $5 for iPhone/iPad games if I know they're good. Hell, after years of paying through the nose for handheld console cartridges, even $15 is cheap to me.
- smartician 14y ago
  I fully agree with you there. It just makes the decision to sell their new game as free with IAP even more questionable. They should have just sold the new game for $4.99 up front. Even if only a fraction of the people who installed the free game would have bought it, they'd still have most likely made tens of thousands of dollars in a week. If it hadn't sold at all, THEN I would have started thinking about a freemium model.
  - slantyyz 14y ago
    >> They should have just sold the new game for $4.99 up front. Yes. I think the tough part when you have a higher priced game is getting the word out there and getting written up in some major blogs. Personally I consider $1 or $2 games to be disposable. It's not much of a loss if they suck. Once you go into higher price points, I base my purchase decision on name recognition/reputation or word-of-mouth.

fijal 14y ago

I'm seriously sick with people complaining that the software they gave away for free didn't make them any money. Maybe we need a better business model for people who make other people's life better, but hey, at the point you make the decision to give away stuff for free, please don't complain. DISCLAIMER: I'm making Open Source software and I can (sometimes) make a living out of it. I'm trying not to complain too much though

revorad 14y ago

"It makes me sick to my stomach as it so transparently preys on the weaknesses like addiction and compulsion." You know what makes me sick to the stomach? Developers starving themselves to death because of a complete disregard to basic business sense and a misguided sense of righteousness. 5 easy steps to homelessness: 1. Spend years building products for a platform, where $1.99 is a high price. 2. Avoid doing even the most basic mental arithmetic to figure out how many units you need to sell at $1.99 to be able to pay rent. 3. Then set the price to zero, because you're a nice guy. 4. Sell in-app purchases for the super duper high price of $2.99, thus raising your customer's LTV to a magnificent $2.99. But, don't be an asshole. Ask for the upgrade politely and quietly, in the third screen of the settings. Remember, you don't work for $ZNGA! 5. Make it up in volume "We really want to stick to the ‘free and pay 2.99 to unlock’ model, but if only .5% of users buy our game, we’re going to have to figure something else out. It’s very malleable at this point. Perhaps we’re giving too much away for free, it’s really hard to say until we see more data.” 6. Look a bonus step no.6! If after following steps 1-5 you're still not quite homeless, then it's time for some more data collection. Spend another year or so A/B testing the gradients of your upgrade button. And oh maybe, your upgrade price is too high? Yeah, test that. Excuse me while I relieve myself of the agony of watching people do this over and over again. AAAAAAAAAARGHH!!! FOR FUCK'S SAKE, STOP IT!!!!! Why do developers worship Apple, but absolutely refuse to take the slightest hint from them on how to do business? Read this - http://www.joelonsoftware.com/articles/StrategyLetterV.html http://www.joelonsoftware.com/articles/StrategyLetterV.html And repeat after me: "Commoditize your complements." "Commoditize your complements." The app store is the most brilliant and brutal execution of this strategy. Apple is selling $500 phones - the most expensive phones - while simultaneously making developers fall over each other and well, go homeless, to make software for their platform to give away for free. As if that's not tragic enough, the celebration of the lottery winners has the public and developers believe that making apps is a great business to be in! patio11 has been trying to drill these things into people's heads for ages. But, all he seems to get is upvotes and not enough people getting his point. You don't have to suddenly go all Zynga on your users. There's a vast chasm between selling virtual sheep to addicted grandmas and giving away the farm for less than the price of a toilet roll. You can charge a good price, which does not depend on huge scale to pay the rent. Edited to add: Lest I sound like some smug business know-it-all on a high horse, I've made the same mistakes. Most of us are like this. We need to make a conscious effort to be good at business.

ja27 14y ago

The app was released seven days ago. I'd say 200,000 * 0.67% * $2.99 ($4,000-ish) is a nice first week for an indie game. Now I guess I know how I can get Penny Arcade to feature my next app. http://appshopper.com/games/gasketball http://appshopper.com/games/gasketball http://www.appannie.com/app/ios/gasketball/ranking/history/#store_id=143441&view=grossing-ranks http://www.appannie.com/app/ios/gasketball/ranking/history/#...

TillE 14y ago
Uh, wow. This seems to be entirely true, which makes the article outrageously misleading. That's a less than ideal launch if you've failed to monetize it properly, but obviously that was nowhere near the cause of homelessness.
ctdonath 14y ago
What? All that whining over one week? Sounded like it's been out there for months! Of course conversion rates are low - users haven't played thru the free content yet! This is really gonna sour sympathy for future stories of actual failures.
- ja27 14y ago
  If I'm right, this was a fantastic job of link-bait. Users, especially parents, hate in-app purchases. But that's the way the app market has gone for now. So far I've been able to resist but except for educational apps (schools have the worst time paying for IAPs), I'll likely be doing a lot of freemium apps. So this hits a sweet spot to vent hate for IAPs and the freemium model. Great job guys.
  - ctdonath 14y ago
    Users hate in-app purchases Yup. For what little it's worth, "IAP" is a big red flag to me, a warning that the "free" app will prove annoying and/or expensive. I'll usually not download any with it, having learned the hard way (right or wrong) that at these prices it's better to pay the couple bucks up front and get the full clean app, than get "free" and have to wrangle with brokenness and intrusive ads and still end up having to pay.

slevcom 14y ago

Most apps, particularly games are limited to a few dollars, which requires them to basically be hits. Reaching out to tons of people to make a hit, is difficult and expensive. Giving a game away for free seems like an easy way to gain some marketshare. In practice it isn't enough. In other hit based businesses, companies use multi-faceted marketing strategies to get the word out, each one a lead bullet. Unfortunately for app developers, measuring marketing efforts through the iTunes funnel is almost impossible. Where do they come from? What's working? Nobody knows. Its difficult for marketing pros, let alone a pair of developers who spend all their time developing and not marketing. They just need to keep at it. Being an indie developer requires more than just developing. Marketing is part of the job. If they are determined enough they will get there. Its just tough to put 2 years into a project, thinking you are finished, and only realize you're at the halfway point.

salman89 14y ago

0.5% upsell sounds about right. In the app business you want to avoid a one time sale and focus on recurring revenue. There is a cap on growth, and revenues must be sustained by current users.

clarky07 14y ago

So many things wrong with this article and devs I don't know where to start. 1. Contract work sucks. You know what sucks worse? Being homeless. Do some work, get paid, save some runway, then get back to your game. 2. Man I'm having trouble making money on this thing I'm giving away for free. No kidding? If your app is free you should be making it really really obvious that there is more to be paid for that is really awesome, and then maybe have a button somewhere that actually allows your customers to give you money. 3. Don't spend 2 years on an app with an ARPU of a couple of pennies. The mobile app market moves really fast and you can't expect the revenue from this game to last you for the next 2 years unless it is a huge hit. 4. This app has been out for a week. This linkbait title is a joke. 200k downloads for a free app isn't that amazing, but it's not bad for a week. Even if it had 10 million downloads, they'd still be homeless as they won't be getting a check from Apple for this until October. Their stupid decisions over the past 2 years led to them being homeless. The success or failure of their launch week has nothing to do with it. Clicking to the article I assumed this was going to be a case of giving away something and server costs bringing them down. Nope. We just decided to not have jobs for 2 years, not do any contracting, and not having enough money saved ahead of time.

briandear 14y ago

This isn't a sad story it's another example of developers being good at code but terrible at business. If code is your livelihood, treat it as such. Misplaced idealism is dangerous. Besides, doesn't giving someone a free game feed into their game addictions? Game pricing shouldn't be subject to some moral code. It's a game: if people don't like the price, they don't have to play. This illustrates the problem with pirate software as well as pirate music and movies. People don't buy the cow if they get the milk for free.

icebraining 14y ago
It doesn't actually illustrate anything because the app's only been out for a week.

phatbyte 14y ago

I'm going to be honest here, I look at IAP games as spam. I don't care how much time you game took or how well it's designed, as soon as I see that I must buy coins/points to upgrade weapons, levels etc, the little 10 year old nes kid in me dies a little. Everybody is so worry about monetization and get rich that they forgot the fundamental rule on a game: Let it be fun and enjoyable, let it be immersive. How would you feel when you were young playing atari, nes, etc and something kept asking for your parents money to continue to play the game ? TBH I rather play 5-7 dollars straight away for a game that includes everything then 0.90 cents where everything is locked up. If DLC's are getting ridiculous on consoles, IAP is the apple store game cancer. It should go away.

brazzy 14y ago
The numbers say that yours is the minority view. Like it or not, IAP works really, really well. And it can be done in a way that does not compromise the game design. These guys tried to do the most simple variant of that (try before you buy), they just executed very, very badly. Heck, I wouldn't mind DLC at all if it provided decent value for money instead of costing $10 for a measly 1.5 hours of gameplay compared to the $60 for 40+ hours in the main game.
- smackfu 14y ago
  Well, I think DLC lets a small minority pay much more than a developer would ever ask for as a sales price. Like a $50 iPhone game would be crazy, but people really do buy that much content. So even if most people do hate DLC... it just doesn't matter.

theDaveB 14y ago

Apple actually let's you have 2 versions of the game, one free with IAP and a paid version without IAP. Also I believe developers go with a IAP to unlock the full game to avoid having their game pirated and downloaded for free on jail broken devices. Dave

patio11 14y ago

There's multiple aspects of this story you can tweak such that the business becomes successful. Pick any one of them: 1) There is an extraordinarily lucrative market opportunity in iDevice contracting right now, which they allude to but mentioned that they avoided doing to keep momentum. Giving that living on a couch is presumably not momentum-enhancing, a two week consulting engagement would buy them another 6~24 months of runway at their imputed burn rates. 2) A platform/language/etc is not a death-til-us-part commitment. You can follow the money. Independent developers are not best served by the App Store, unless they get ridiculously fortunate with regard to its kingmaking economics. If you only have one chance to develop an application, you would be better served by developing for a platform where the median case pays the rent. 3) Don't develop video games. You're competing for the business of toxic people who hate paying money against the union of well-funded corporations (which have high production values and effective, ruthless monetization) and amateur hobbyist artistes (who have "that vision thing" and are willing to starve to deliver it for free). Try making something for more lucrative markets like, oh, businesses. 4) You may have deep psychological issues with comfort about charging people money. They seem to be fairly common in our community, which is unfortunate, and we seem to actively promote them, which is unfortunate++. You should first recognize that you are creating something with value for people (if not, stop) and then come to the immediate realization that, as a business, people trade value for money. (If you desire to do charity work, do it for more deserving people than gamers with iPhones and entitlement issues... and you should probably do it after having secured your ability to deliver on obligations to your family.) 5) If you've got a budget of 100 awesomeness points or focus points or whatever, spending 90 on your software and 10 on your business will have much worse results than spending 10 on your software and 90 on your business. Having people who can concentrate 100% on building software is a wonderful thing. They're called "employees" and they cost about $10k to $20k a month; you can pay for them after you've got a business. If you desire to work 100% on software, you desire to be an employee. 6) Burying the buy button three screens behind Settings: probably not ideal for conversion rate maximization. 7) Maximum customer LTV of $2.99: also not ideal. Consider anything you can do to increase this, for example, offering upsells on top of the base offering, cross-selling them to other things in your portfolio or things from others' portfolio for a percentage, or developing a permission marketing asset such as an email list. Some of these are very not viable on the App Store but I think I already gave you the advice for that. 8) If you sell X, look at the tactics used by successful sellers of X. If these tactics strike you as morally outrageous, don't sell X.

chubs 14y ago

I hope they read this (not sure if they will), but: Ads! I've a friend who gets approx $4/user/year from a non-game mobile app from ads through mobclix. I think it's a fair assumption that you'd get even more ad impressions on a game (as people spend more time in games), but even without that, 200k players * $4 each = a lot of money.

aeiowu 14y ago
I did read it and we're doing this exact thing right now, hope to have the update submitted tomorrow. -Greg

austinlyons 14y ago

+1 to devs in Iowa!! But maybe if Iowa wasn't so cheap, they would have started by charging for their app out of the gate.

georgeecollins 14y ago

The linkbait title is much more interesting then the actual article. This discussion is also much more interesting then the article. The obvious thing is that if you are self funding, don't bet everything on one game. No one knows what games will hit and what games won't. The best thing is to swing the bat a few times. As many have pointed out, it seems like these guys should experiment more with what they have. It's not clear at all that their situation is dire.

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colinplamondon 14y ago

They're now Top 200 Grossing on iPad- seems like they managed to trip their way into one hell of a marketing strategy. 1) Bitch about not making enough money because you boned your conversion funnel. 2) Get an article written about how you don't make enough money 3) Make money! Don't try this at home.

aeiowu 14y ago
We didn't. We were homeless! ;)
- colinplamondon 14y ago
  Haha, well played!

belorn 14y ago

incentives are tricky and the story is showing what happens when you induce the wrong ones. They want to have "a free game", a "cheap upgrade" and a "only one upgrade needed". Three things that do not match. If they are going for a free game but that offers the enthusiastic 1% an payed to play upgrade, that upgrade can not be cheap. If they increase to 29.9$, their conversion rate would likely only go from 0.67% to 0.5%, but increasing profits by around 500%.

goggles99 14y ago

Where is the story here? You can have the best game in the world but if no one can figure out how to buy it - of course you will go broke. Isn't this common sense? I see you have finally figured this out (now that you are homeless). If that does not boost your revenues - Lower the price to 1.99 or $0.99. We are in a bad economy and $2.99 is not in the sweet spot by any means.

goggles99 14y ago

Take this link off or HackerNews. It is a fraud. Ctdonath summed it up beautifully... "1. The "buy" button was hidden. People who wanted to pay couldn't find it. People didn't even know there was anything to pay for. 2. The app has been out a week. Users haven't had time to play thru the free content and develop any desire for [unknown (see #1)] paid content. Made near all users sound like Scroogeish tightwads. Unfair."