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

http://gamesfromwithin.com/making-a-living-barely-on-the-iphone-app-store

by adamhowell • 17 years ago

87 16 17 years ago

outotrai• 17 years 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-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.

jfarmer3• 17 years ago

Every single Facebook game uses this model.

access_denied• 17 years 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• 17 years 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.

city412• 17 years 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.

jfarmer3• 17 years 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• 17 years 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?

llopis2• 17 years ago

This is Noel, the author of the post and of Flower Garden.

I was planning on leaving a detailed analysis of the effect of IAP for a later post, but you're right that some people didn't like it. Especially in the Facebook group at one point there was almost a small-scale riot from people feeding off each other's negative comments. But as usual, that's just a vocal minority.

I had to intervene by explaining why I was charging for extra content (http://www.facebook.com/topic.php?topic=10677&uid=748971...) and I think that once people realized it was just me and not some faceless corporation, they were much cooler about it.

So my comment about "people loved it" referred to the fact that I got tons of positive feedback and the fact that IAP sold very well.

Frankly, I knew some people wouldn't like me moving in that direction (especially if you're used to the model of free updates for life), but I'm surprised that I didn't ruffle more feathers and most people took it really well.

Also interestingly, I think this has gotten people who had cracked versions of Flower Garden to purchase in-game items, so that probably helped too. But unfortunately I don't have a really accurate way of measuring that (I'll try for my next post).

maxklein• 17 years 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• 17 years 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).

llopis2• 17 years 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• 17 years ago

one of the greatest app store success stories will be AppViz

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

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