

Tales of App Store failure - xsmasher
http://deadpanic.com/failure

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megaduck
This all feels really familiar. The PC application market used to have the
same "get rich quick" carnival vibe, as did dot-coms.

Eventually the craziness will die down, and only the more serious developers
will stick around. There's bound to be some big consolidation. It's inevitable
as the market matures, and we've seen this pattern over and over and over and
over.

The real question though, is whether the pricing model and consumer
expectations have been so degraded that the situation is unredeemable. At 70
cents per sale, the revenue isn't enough to support many players.

At current prices, the TAM of iPhone apps looks like around a billion dollars,
with Apple skimming around 300 million right off the top. So, that leaves us
with around $700 million in revenue per year.

That's enough to support a handful of small-to-midsize development shops, with
nobody capturing more than a few million a year. However, the money certainly
isn't enough to support multiple large software businesses. Adobe alone did
$700 million in sales last _quarter_.

I don't think that this is a healthy state of affairs. Hopefully, things will
improve after the shakeout.

~~~
prbuckley
The name of the game for the app store is shifting. People really need to
start understanding marketing their apps beyond the app store.

There are tools out there that are being designed to help you as a developer
do this, <http://appsto.re> , is one example. Apps need better metrics and
feedback to improve sales.

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mrshoe
> _Is The Party Over?_

No, but the gold rush might be. The iPhone is still a very viable platform for
making money selling software. Mobile apps can be incredibly useful, and the
App Store makes it easy for people to spend money.

It's hard to get noticed right now because there has been an absolute flood of
apps. As people start to figure out that not all app developers get rich, that
flood will slow to a more reasonable stream.

There does seem to be a market inefficiency in the huge disparity in sales
between apps that are featured by Apple and apps that aren't. Picking up that
slack in the market has to be an opportunity for a startup. If Apple isn't
providing a good way for great apps to be found in the App Store, someone else
should.

~~~
prbuckley
Check out <http://appsto.re/> as a free tool to promote iPhone apps.
<http://blogs.appsto.re/> explains a bit more about the service.

~~~
pronoiac
The blog's at <http://blog.appsto.re/> .

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Tichy
"At two updates a month, I can make $2000 a month - just enough to pay my rent
and groceries, but no extra to cover the sunk production costs."

I don't quite follow that logic. The expectation seems to be to write one
successful App store game and then live off the revenue happily forever after?

Seems to me that if the game cost, say 20000$ to make, and you make
2000$/month for 10 months, you have hit break even. During those months, you
can create more App store games that will add to the revenue.

Instead of one game making 2000$/month, you could also have 10 games making
200$/month, and so on...

If it continues to sell and sell for years, ultimately it won't have been a
failure. It was just a couple of months work but brings in money forever (I
know, it probably won't sell forever, but that is another issue).

~~~
megaduck
He's just running the numbers. In a _best case scenario_ , he can pay rent and
food with cashflow, but there's no money left over to pay for extra
development cost. Art assets, music, and such cost money.

Two updates a month is probably full-time work, so there isn't any time left
over to build new apps, and no surplus capital either. Plus, that's assuming
that each and every update spikes sales like the launch did.

According to the OP, daily sales are currently holding steady at around 11
sales a day. That's a little bit over $200 a month in persistent revenue. At
that rate, it would take almost a decade for the game to break even, given a
cost of $20,000 to develop.

Special note: This is for a game that cost only $20,000 to make. Building a
solid AAA title can cost hundreds of thousands, or even millions of dollars.

------
gamble
It's interesting to see app makers rediscover the lessons learned by mobile
gaming developers years ago. Handheld games have been a brutal business going
back to the Gameboy. The keys to success seem to be: 1) licensed properties
and 2) amortizing development costs by reusing the same technology over
several titles. You need a lot of discipline to succeed.

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swombat
Well, for what it's worth, I just bought a copy. It doesn't look that amazing,
but it might be fun.

Lesson: Putting stuff in the app store won't do anything for you unless you
market it outside the app store. Not sure that's a very original lesson.
Surely that's obvious?

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bcl
This just reinforces that normal application marketing can't be thrown under
the bus. There may be a slight bump for 'being there', but you still need to
find your customers and tell them about your app.

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chrischen
Apple probably intentionally makes it seem like a gold mine. Probably why they
keep the top apps list fresh and new, so that more people can share their
stories of sudden fame and fortune. Then more people release their mediocre
apps, sell a couple, and Apple makes more money.

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marknutter
Zombie killing on the iPhone!? I bought a copy.

