iPhone App Store's Brutal Reality: Get Viral Or Don't Quit Your Day Job

Dan Frommer | October 8, 2008 2:57 PM

aqua-hoops.pngThere have been a few get-rich-quick success stories in Apple's (AAPL) three-month-old iPhone app platform, like the guys who made $30,000 for a day of work selling an app that looks like a rotary phone. But for many developers, there's a bleaker reality: Either get some really good promotion -- from Apple, word of mouth, from the press, from advertising, etc. -- or don't quit your day job.

Example: Former I'minlikewithyou developer E.J. Mablekos, who's created Aqua Hoops, a simple, fun, good-looking game with the right price tag -- 99 cents. (See video demo below.) Exactly the kind of app we'd pay a buck to waste a few minutes of time with now and again. (We did buy it, and it is fun.)

So how are sales? They started out strong, when Aqua Hoops appeared on the "most recent" page in iTunes, and when the game got some buzz from iPhone blogs and G4TV, a cable network for tech/gamer-types (and us!). That day, Mablekos sold 350 copies of Aqua Hoops -- $245 net revenue after Apple's 30% cut. If he could do that for a year, he'd take home $89,000.

But after hitting no. 91 on Apple's "top paid apps" board, Aqua Hoops is down to a more modest sales rate: about 60 sales a day, or $42 daily net revenue -- $15,000 a year. All told, he's made about $1,400 so far. "Can't quit job at pizza place yet," Mablekos joked at last night's New York Tech Meetup.

What's next? More iterations of Aqua Hoops -- like football-themed Aqua Punt -- and some features that could make the games more viral -- like a real-time high score list that gives people something to play for. Both smart moves that could increase sales.

But for now, Aqua Hoops is a reminder that Apple's iPhone app store is a hit-based business, and far from a Gold Rush for everyone -- even if you have a good app.

See Also:
Obama's iPhone App Wins Praise, But Probably Not Votes
Great News For iPhone Developers: Apple Drops NDA
Who's On Buzzy Facebook-For-Mobile Upstart Loopt? A Bunch Of Dudes, Of Course

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16 Comments

Kaka said:
After seeing the video I think it's fair to get a few grands back for such a game...
Mike Malone (URL) said:
It's funny because I would have spun these numbers the opposite way. While $15,000/year might not be enough to quit your day job, it's a nice chunk of change. And if you're writing these apps full time you'll probably have more than one, and will probably be iterating to make them more popular/viral/etc.

Being in "the alley" you guys should be running the numbers... let's call the game sales revenue a perpetuity. And let's (conservatively) say he'll make $10,000 a year. And let's assume his required rate of return is 20%. That puts the games net present value at $50,000. Not bad for something that probably took less than a month to develop. Make 19 more and you're an iPhone millionaire!
Fair enough, Mike, and wasn't trying to suggest that people shouldn't go into the iPhone apps business. But unless you have money saved up or an investor, it's going to take a while before the revenue is substantial enough to do it full-time. (Not helped by Apple's numerous delays etc.)
Ben Soze said:
Apple thinks it is doing the right thing. Open marketplace means innovation, selection, etc. However, they have really created a marketplace that is good for them and very bad for developers and worse for publishers. Either group have about one week to sell games through the app store. Essentially, they better be using those 5-7 days figuring out clever ways to monetize their products outside the iPhone. Once the title is out of the top ten it is dead. Apple will eventually completely lose EA, Sega, and other large publishers. They will realize the first wave of games was the best dead they will ever get.
Ben, is that true even if the platform grows to 50 million users in the next year? 100 million in two years? Is that enough to make the longer tail worth developing for? Anyway, can't see how it's worse than the other crappy mobile platforms where they're getting ripped off by the carriers -- or the portable game consoles, which will soon (if not already) be a smaller market than next-gen smartphones?
Martin Hill (URL) said:
Mike Malone, I agree - I don't see this as evidence of the App Store's "brutal reality". On the contrary it looks like the App Store is enabling even basic programs to make decent money even without being on the top ten list.

Looking at the video of this game, I'm actually surprised it is selling so well. $15,000 income a year for such a basic piece of programming (compared to say Cro-Mag Rally or even Chopper) strikes me as nothing to complain about.

If Mablekos produced a few more apps like this and got similar rates of return, that would represent a very viable business.

@Ben Soze
Rubbish! As Dan says, you obviously haven't seen how bad a deal most other mobile platforms have provided with the carriers greedily sucking up to 70% share of a developer's income and giving terribly poor sales numbers. At the rate the App Store is going, in only the first 4-5 months of operation, more apps will have been downloaded from the App Store than the entire mobile market does in a year. Not surprisingly all the big game houses are falling over themselves to join this juggernaut.

Dan’s point that we shouldn’t expect every app to be a get-rich-quick scheme is quite valid, but that doesn’t negate the fact that even low-tier iPhone Apps look to be a far more solid source of income than other mobile platforms.

-Mart
anonymous said:
What's more, swf to flv converter can help you produce various videos and Flash movies with advanced effect. For example, you can crop the swf frames, capture the pictures, add the backgroud image to the converted files.
Greg Yardley (URL) said:
The bulk of developers making quit-your-day-job money at the moment either a) have an absolutely bad-ass application selling for $4.99 or more, or b) are using a free feature-limited game to exclusively promote their $0.99 full-featured version of the same game.
josiah (URL) said:
iPhone App Store's Brutal Reality: Get Viral Or Don't Quit Your Day Job646-363Why are you yelling? I'm so scared.
roselyn (URL) said:
iPhone App Store's Brutal Reality: Get Viral Or Don't Quit Your Day Job 多效唑 Cat got your tongue? You go first. I'll catch up later.
bart (URL) said:
640-802 iPhone App Store's Brutal Reality: Get Viral Or Don't Quit Your Day Job Far from it. Took you long enough.
zinnia (URL) said:
See? I told you! It's cold outside. I should have worn my jacket. See? I told you. It's a cold day. I didn't think I'd see you here. 640-802 / 350-030 / 642-456 / 350-018 / 70-237 / 642-552
Mark Barton (URL) said:
Our app MeterRead, just came out. We thought we would have a month to plan marketing after it was sent in, but it went live 3 days after it was submitted. It cought us off guard. The original plan was to use the free to paid marketing plan, but that appears to be dead... Space Monkey hit the top 3 free app spot, went to paid and barely cracked the top 100. A week earlier "Fireworks" was free for a day or two and was number one when they made the swich to paid which got everyone upset. Read the reviews and look for mine, username Zerogate.

Viral? OK Check out www.zerogate.com and get MeterRead while it's on sale this week!!!! I want to quit my day job. LOL.
Tim Haines (URL) said:
My first app, Kana, got listed on iTunes this week. Unfortunately when it was listed it was already on the 5th page of new releases. It's because it got approved straight away (setting the release date), but my contracts hadn't been approved yet, which kept the app of the app store.

Without any promotion at all I've had sales of 15, 11, and 19 per day for Kana - at $1.99.
Dul (URL) said:
Well at least I can get the top apps
http://www.redrome.com/app-store/
Martin D'souza said:
The premier seller of jordans and buy air force ones and information on acne.

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