$750,000 per day with 2 iOS apps

http://www.treysmithblog.com/700000-per-day/

by drewjaja • 14 years ago

88 68 14 years ago

treysmithblog.com

benguild• 14 years ago

That's ridiculous!

torhorway• 14 years ago

Startup copies another game exactly down to the tutorial and makes money... CONGRATS, YAY, SO IMPRESSIVE

Zynga copies another game exactly down to the tutorial and makes money... LAWSUIT OMG HATE HATE HATE

You people are such hypocrites

true_religion• 14 years ago

Yours was only the 2nd comment to this article. The first being "that was ridiculous!".

How did you so quickly draw a bead on HN, and manage to decipher what the rest of the audience thought about it?

For my part... I think these guys are simply Zynga without the rumours of an oppressive workplace. They have 60 employees, and a business model identical to many others. I'm not sure what if anything makes them into a startup.

kenpratt• 14 years ago

From the article: "5 out of the 8 founders and executive team are from Digital Chocolate, the makers of Galaxy Life".

So it's a pretty large mis-representation to say they copied another game, as they were on the team who built said game (granted, the writer doesn't do a very good job of conveying that). MUCH different than cloning a competitor.

qq66• 14 years ago

The game they built is the property of Digital Chocolate, so whether they're from that company or not, they're copying another company's game. The ethics of that are of course debatable.

treysmith9• 14 years ago

They copied the gameplay style and tutorial. Again, I mentioned many times it's a smart move. I don't think they copied CODE or did anything shady. But go play galaxy life and then Clash of Clans. It's dead obvious.

BSachse• 14 years ago

Zynga went public with this mentality.

ido2• 14 years ago

Maybe the people chastating zynga aren't the same as the ones cheering for this company? I find both distasteful for the same reasons personally.

HN is not 1 grand hive-mind with everyone sharing the same opinion.

swohns2• 14 years ago

We've been seeing articles everywhere about how App economics don't make sense, it looks like games are the exception. I'd love to see the communities thoughts about this!

mmahemoff• 14 years ago

Most of these articles are about the long tail of app developers who didn't make anything. I don't see how gaming is any different to that.

On a related note, this shows game developers are making their cash with in-app purchases, much as non-game app developers are increasingly making their money with subscription models.

swohns2• 14 years ago

Thanks!

derefr• 14 years ago

Is it really a long tail of app developers, or is it a long tail of non-competitive app monetization strategies? That is to say, if you make something just as "evil" as one of these social-pressure addiction machines, but it doesn't break the top ten (because there are already tons of other companies making social-pressure addiction machines), will it still be profitable (because it's a good model) or will it fail utterly (because it's in the long tail)?

xauronx• 14 years ago

When does a startup stop being a startup? 60 employees and $750,000 per day seems to me like just a normal successful company.

ajross• 14 years ago

270M per year in revenue on ~12M in expenses (assumes $200k/employee) certainly isn't "normal". That's a huge hit.

And of course it won't last for the whole year. These are spikey products, and sampling the biggest hit at any moment tells you very little about the value of the company behind it. You don't have to look any farther than Zynga for proof of that.

Whether 60 employees constitutes a "startup" or not I guess is a semantic thing. Back in the 90's, that was routine. Now the YC model has downsized the concept such that you stop being a "startup" (in the hipster sense, anyway) once you land funding for real employees.

alanctgardner22• 14 years ago

The problem with a 60 person team in a volatile market is that they're going to have a hard time weathering the spikeyness. It's not like two guys in a garage who can leave and come back to it. These people are buying houses on the presumption that they'll be employed in 12 months, when the revenue stream dries up it's going to be trouble.

I wonder how these social game companies get so big in the first place. I thought it was all but proven that consistently being successful in this space is almost impossible. If it's VC funding, what's the exit? They all seem to run into the ground. In this case it seems like the founders had enough capital from the last time they shipped this game. Personally, I would seek a more stable space after hitting it big once.

mdonahoe2• 14 years ago

If it is still growing rapidly, it might be considered a startup.

http://paulgraham.com/growth.html

tnuc• 14 years ago

Not loading for me.

mkuhn• 14 years ago

http://webcache.googleusercontent.com/search?hl=en&tbo=d...

treysmith9• 14 years ago

Sorry, server got overloaded but they are working on it!

treysmith9• 14 years ago

Fixed :)

skyebook• 14 years ago

$750,000 a day and he can't keep his blog up.

treysmith9• 14 years ago

Haha, I'm not making $700,000 per day. Which is apparently very evident because I can't even keep my blog up.

dakrisht• 14 years ago

Insane

gagabity• 14 years ago

7500,000 before Apples cut, and what about expenses? especially user acquisition.

treysmith9• 14 years ago

They are at about $60,000 per day. Not bad considering.

mrtron• 14 years ago

Not bad? That is ridiculously low.

Geee2• 14 years ago

Have you actually played Clash of Clans or Hay Day? Those things are amazingly well designed for money printing purposes. Everything in the games are designed to be slippery conversion funnels filled with hooks that pull you deeper and deeper. The idea is to monetize addiction with very high conversion rates.

Some of the ingredients: free to play, every action prompts a IAP (wait or pay), quick&easy progress in beginning, instantly addictive, competitive (leaderboards&prizes), social pressure (you have to join a clan and fight for it) etc. All of this very well executed in a great game.

Edit: So, the author's point that they 'just executed proven idea better and added content' is not the reason why they are so successful. It's the starting point. Real innovation here is that they are probably among the first who really focus on conversion optimization in games.

ronyeh• 14 years ago

All of the top grossing free-to-play games are like that. DragonVale used to occupy the top spot, and is similar.

The current #7 top-grossing app is Slotomania. I like to think of all these free-to-play games like Slotomania. They're addictive, have colorful graphics, and either make you wait to earn more coins, or succumb to your addiction and pay up (real $) to get (fake $) coins NOW.

jcromartie• 14 years ago

They are finely-tuned psychological conditioning/manipulation machines.

Do not confuse them for games.

teej• 14 years ago

I'm sorry, but bullshit.

Clash of clans is a great game. I have played it nearly every day since I've downloaded it. Am I a zombie, sucked in to the compulsion loop so tightly that I can't escape? No. iOS games are not habit-forming drugs. They're pixels on a screen.

I play every day because it's fun as hell. I love searching for opponents, analyzing their bases, discovering their weaknesses, and exploiting them with my troops. I love building my clan and getting higher on the leaderboard. I love discussing the ever-shifting optimal layout metagame with my clanmates. These things are FUN.

Yes, games use certain tactics that when examined naively look like manipulation machines. But that's fucking hogwash. Clash of clans is #1 top grossing because it's hands-down the most widely accessible, deep, and fun strategy game for the iPhone. Nothing comes close.

linpythio• 14 years ago

Some of software companies are "money printing" ,e.g,m$.

treysmith9• 14 years ago

I'm the author and I highly doubt that. They are far from the first company to really focus on conversion optimization.

I paid a statistician to reverse engineer the economy of Dragonvale, Tap Pet Hotel and Tap Zoo. All of the games follow a VERY similar pattern on every stat. Here is an example on XP and Level ratios:

http://www.treylink.com/uploads/xp_leve_ratio.png

We've done ton of research on this and most of these games copy each others economy very closely.

I could go on about that forever, but go play Galaxy Life and then Clash of Clans. You'll see it's the EXACT same tutorial story and setup. I mean, screen for screen. I'm not hating, it's just the nature of the business.

The fact is this:

Innovation is a risky business model. The companies can see what worked, tweak the theme and add to the game content, and have a MUCH higher chance of success.

Geee2• 14 years ago

I agree that those monetization patterns aren't unique to them, but they are fairly recent trends in gaming, in general. Well, Valve innovated something with TF2 free-to-play model. And now, with IAPs and stuff, I think more game developers are consciously focusing on tricks in conversion optimization. Not just 'how to make a fun game that everyone will buy'.

Of course, that doesn't help if the actual game isn't good/addictive enough, which might be the case with Galaxy Life (or app market dynamics/luck/anything). However, Supercell probably 'recreated' it just because they saw a great monetization potential in that type of game.

zach• 14 years ago

The first few games to use an exponential XP curve may have copied each other, but by now basic things like this are simply conventional wisdom in game design.

Here's Diablo II's incremental XP vs. level graph — essentially identical: http://hothardware.com/articleimages/Item1824/D2-XPScale.png

contravert• 14 years ago

It really stood out when you said that you paid an statistician to analyze these games. I assume you did it to understand and try to replicate the successes of the top grossing games. What did you learn that was surprising? Did this level of analysis help you make better games?

trhtrsh• 14 years ago

You paid someone to tell you and XP is an exponential function of Level? Every game since D&D in 1974 (and probably earlier) has had that.

Heck, the human ear has an exponential relationship between air pressure and perceived loudness. As does the human eye for light and perceived brightness.

teyc• 14 years ago

I enjoyed your talk recorded last year. There was a time when you felt that doing a game is too competitive and it may be better to do some other app. What are your thoughts now?

abhimir• 14 years ago

Can you share more of your research?

flyinRyan2• 14 years ago

>Innovation is a risky business model. The companies can see what worked, tweak the theme and add to the game content, and have a MUCH higher chance of success.

Sorry for the hijack, but this is a key point to understanding why we need some kind of patent system. Thanks for this comment that I can come back to whenever there's another patent fight. :)

masklinn3• 14 years ago

> Have you actually played Clash of Clans or Hay Day?

I've tried Clash of Clans, and I was actually surprised at how different it was to the usual farmville-ish clone in that regard:

1. The important currency (the gem thing) can in large part be obtained from in-game achievements. Not in huge quantities, but...

2. It really only works as an accelerator: more builders, instant purchases and (in the last update) work acceleration. And the game does not hammer you with it at all, as opposed to some others I played in the past.

3. The one thing that shocked me the most, as you progress in the game it starts requiring less of your time. A good example is the collector things, they produce at a fixed hourly rate but store their production for collection so you don't have to open the game and click it every 10 mn, but more interestingly the internal storage grows faster than the production rate: the level 1 thing can store 2.5h worth of production, at level 6 it grows to ~15h.

> every action prompts a IAP (wait or pay)

That's not even true, when raising or upgrading buildings for instance there's only one flow, the IAP comes after that by reselecting the building itself after launching the action. There's surprisingly little prompting for consuming the crystal things, and I've yet to see a single in-your-face full-screen dialog suggesting buying these gems explicitly.

jsolson• 14 years ago

For what it's worth, the tutorial described there reminds me of at least one RTS I've played, although I can't place which one. Particularly that you start the game under attack. Maybe a C&C game or an Age of Empires game?

Not sure.

damian20002• 14 years ago

I'm interested to find out that this is where my 12 year old son sunk about $25 into in-app purchases ("bag of gems") over 2 days of playing this game (Clash of Clans) on his iPod Touch. He says its an awesome game, but this seems way too overpriced to me. All his friends from school are also playing it, and probably also sinking cash at a high rate into this company (and Apple).

mdonahoe2• 14 years ago

I spent lots of money on video games growing up.

The only difference I see between my spending on nintendo games and your son is that I used cash instead of an credit card attached to an itunes account.

The problem is that it is too easy to forget we are spending real money. Clicking YES on a popup is a lot easier than physically removing a 20 dollar bill from your wallet and handing it over. After a cash transaction, I reflect on my empty wallet. After a credit card purchase, I have to check my balance... if I even remember.

I dont blame the game companies for trying to make addicting games any more than I blame restaurants for asking if I want to try the specials or if I have room for dessert.

tl;dr, credit cards are dangerous. As they always have been.

damian20002• 14 years ago

Good points, in my son's case he uses pre-paid iTunes cards - which are widely available these days. Same effect - once the initial purchase is made and the card loaded onto the account, its almost too easy to make in game purchases.

mst• 14 years ago

Compare to how much people would put into the 'new machine' at the arcade during their first day or two of playing it.

Admittedly, I thought they were wasting money at the time, but they didn't seem particularly upset about it either.

masklinn3• 14 years ago

> He says its an awesome game

As a data point, I think it's a nice game indeed.

> but this seems way too overpriced to me.

Technically, the price is $0, as far a I've seen gems are solely accelerators. However it takes more effort (and time, but that's mostly time spent not playing the game) to play that way of course.

flyinRyan2• 14 years ago

If his son paid $25 then that's the price of the game/experience for him. One should always consider total cost of ownership of anything, not the initial outlay.

dirkdk• 14 years ago

nice article. It would have been more effective for me without the superlatives and just in general shorter.

jacquesm4• 14 years ago

These games take money out of the pockets of kids that can usually ill afford it and are typically not aware of the consequences of their addiction until it is much too late.

And that addiction is there by design, not by accident.

Chalk it up to bad parenting or whatever you want but in the end this is still a scam delivered in the form of a game, aimed squarely at a vulnerable group, one that by law can not enter into binding contracts.

The fact that it brings in an insane amount of money is not an excuse, though I'm sure that there are enough people to who this kind of income is enough to throw away all their ethics and start raking it in.

In-app purchases work because they defer the visualization of the amount actually spent until the phone bill comes in.

Kids literally have no idea how much they're spending on these things (in fact, most adults don't realize it either).

I see enough young kids in my surroundings getting into trouble with parents, debt collectors and all kinds of other nastiness just because games like these cause them to overspend due to the addictive elements embedded purposely in the game.

Apple, for all their oversight on the appstore is 100% complicit in this, apps are routinely thrown out for trivial reasons but mixing teenagers (a vulnerable group if there ever was one) and impulse buys at exorbitant prices is A-ok with them.

And no, this is not a 'blame the computer games for kids behaviors' argument, it is a blame the makers of addictions for the problems stemming from those addictions.

The argument seems to be that if they don't screw them someone else will. But that's nonsense and one of the reasons why marketing stuff directly to kids is illegal in many places.

kranner• 14 years ago

> In-app purchases work because they defer the visualization of the amount actually spent until the phone bill comes in.

But let's not gather the posse on all in-app purchases.

Non-game iOS apps with no consumable items can't help but go freemium in the absence of a time-trial mode (as in e.g. WP7), and Apple's discouragement of separate lite/pro versions.

jacquesm4• 14 years ago

Yes, you are right. There are many legit uses for in-app purchases. But this crack-cocaine in digital form isn't one of them.

fragsworth• 14 years ago

> I see enough young kids in my surroundings getting into trouble with parents, debt collectors and all kinds of other nastiness

I suspect you are embellishing your story a bit to rile people up. You can easily complain to Apple, Facebook, or any platform that has these games, if your child spends a huge amount of money on the game. It's called a "chargeback", and is very easy to do. The game developers have to return the funds by contract, and the user is typically banned as a result.

My understanding is (from personal work on social games) that the highest-monetizing users, across the board, are the older users. Even if the game looks like a cutesy kid's game, it's normally the case that it wasn't really designed for children. It only looks that way to hardcore gamers.

For the most part, children that unwittingly spend a bunch of money make up a very tiny fraction of revenue for these companies. Any of them that spend a huge sum normally end up receiving a refund a month later when their parents find out.

jacquesm4• 14 years ago

> I suspect you are embellishing your story a bit to rile people up.

You do? What made you suspect that?

Have a read:

http://www.abc.net.au/news/2012-09-17/kids-racking-up-huge-b...

> You can easily complain to Apple, Facebook, or any platform that has these games, if your child spends a huge amount of money on the game. It's called a "chargeback", and is very easy to do. The game developers have to return the funds by contract, and the user is typically banned as a result.

Yes, and these rules are of course clearly advertised when you start a game like that.

I watched a kid aged 8 playing with a smartphone rack up 10 euros in charges in about 5 minutes while on the train on Saturday, nobody around had any idea what was going on.

Parents will typically be honorable to the extent that if their kid did this that they will not charge back if they perceive their kid is at fault by buying these scam products. What they don't realize is the cunning and the guile that go into designing these and I'm fairly sure that if they did that it would be a completely different picture.

> My understanding is (from personal work on social games) that the highest-monetizing users, across the board, are the older users.

Ah ok, so that makes it ok to take money from the kids as collateral damage, after all they're not the big spenders.

The basic idea in a transaction is that you do what you can as the seller to give the other party something of value in return. The idea is not to see for how much you can 'take' a party in an a-symmetrical set-up where you have all the data and they have none. That's very much like taking candy from a baby.

These are not 'social games' they're anti-social games.

> Even if the game looks like a cutesy kid's game, it's normally the case that it wasn't really designed for children.

Oh that must be my impression then. And that explains all the pre-teens that I see hooked on such games. It wasn't designed for them. And they shouldn't be playing with those smartphones to begin with.

> For the most part, children that unwittingly spend a bunch of money make up a very tiny fraction of revenue for these companies.

Feel free to support that with evidence, I suspect that the large majority of the customers are technically adults (because an adult has signed for the contract) but the consumers are kids and their parents are too honorable or not informed enough to make use of the charge-back options provided. And I'm sure you'll blame them for that. Typically those options are not listed up-front and the practice with charge-backs is that even on outright scams the percentages are low enough that they persist. Most people don't even know about the possibility to do charge backs on their credit card ('card not present') charges when not using 3D.

> Any of them that spend a huge sum normally end up receiving a refund a month later when their parents find out.

Yes, a huge sum would set off alarm bells. But $50 would likely be absorbed even if it came out of the family telco budget, or if it causes a kid to get into trouble otherwise.

I'm quite surprised that you would defend these practices, but given that you work on 'social games' I guess that you're just trying to rationalize your complicity.

ChuckMcM• 14 years ago

Interestingly that is nearly 1/4 the revenue of Zynga [1] (3.2M/day if you're wondering)

[1] http://www.google.com/finance?q=NASDAQ%3AZNGA&fstype=ii&...

fpgeek• 14 years ago

Data points like this always make me wonder what the non-game part of Apple's app store (and Google's, Amazon's, GetJar's, ...) looks like. Is there any good data on that?

josteink• 14 years ago

If you make any sort of money, someone will always be at the other end paying that exact sum of money.

If you are a sympathetic person, the higher that sum is, the more you will be focused on ensuring that the money paid is paid by people able to do so responsibly and people knowing what commitments they are getting into.

This sounds like quite the opposite.

michaelgrafl• 14 years ago

When I got my first smartphone (not that long ago) in my naïvety I installed some random free game from the Google Play store to see how obtaining software works. I don't remember which game it was, but I remember being stalled a couple minutes in, being offered some kind of upgrade that I could buy in order to progress in the game. With real money.

With. Real. Money.

I'm baffled that no one else here (although I'm sure there's plenty of us) seems to be baffled at the mere concept of playing a game and being asked in that game to spend real money in order to make it fun to play. If the commercial success of your "game" depends on it, I will not steep so low as to discuss whether that tactic is legitimate in this particular case or not. In my world, it's not, nor will it ever be. Make a game that's fun to play and then sell it. If you can't do that, bad luck. Or try harder. Or go make something else that has value in and of itself.

I feel stupid now for writing this comment. It's an overly dramatic one that probably no one will read, and it's kind of off-topic anyway. But I really feel like pointing out how I can't wrap my head around the concept of in-game-charges, and how such a lame, opportunistic thing could worm its way into mainstream game creation.

$750,000 per day with 2 iOS apps

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