

$750,000 per day with 2 iOS apps - drewjaja
http://www.treysmithblog.com/700000-per-day/

======
jacquesm
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.

~~~
fragsworth
> 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.

~~~
jacquesm
> 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...](http://www.abc.net.au/news/2012-09-17/kids-racking-up-huge-bills-
on-mobile-games/4266632)

> 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.

~~~
ido

        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.
    

I agree with your comments (and up-voted them), but I see no reason to assume
that this isn't fragsworth's actual opinion and instead a manifestation of a
some nefarious hidden agenda.

~~~
jacquesm
That was a mirror of his statement that:

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

That works both ways.

------
Geee
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.

~~~
treysmith
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.

~~~
zach
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>

~~~
treysmith
See my other reply, it wasn't just XP and Level. Earn Rates per minute, cost
of items per level, etc was also similar.

------
damian2000
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).

~~~
mdonahoe
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.

~~~
damian2000
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.

------
xauronx
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
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.

~~~
alanctgardner2
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.

~~~
JoshTriplett
> These people are buying houses on the presumption that they'll be employed
> in 12 months

If you're really making a quarter-billion a year in profit, with 60 employees,
thoe employees shouldn't need a _loan_ to buy a house...

~~~
alanctgardner2
If they have sense saving money from the few weeks of 6 figure sales to
weather the inevitable slump while they iterate or find the next big thing.
Giving every employee an equal share of the revenue would be equally short
sighted.

------
josteink
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.

------
ChuckMcM
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&...](http://www.google.com/finance?q=NASDAQ%3AZNGA&fstype=ii&ei=OGCsUKD9NOapiQKnXw)

------
michaelgrafl
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.

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fpgeek
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?

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swohns
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
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.

~~~
derefr
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)?

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

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

~~~
mrtron
Not bad? That is ridiculously low.

------
jsolson
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.

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

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

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tnuc
Not loading for me.

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

~~~
treysmith
Fixed :)

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

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torhorway
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

~~~
kenpratt
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
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.

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dakrisht
Insane

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benguild
That's ridiculous!

