
Over $700k selling a premium mobile game - cdvonstinkpot
https://www.reddit.com/r/startups/comments/4f74dv/quit_my_full_time_corporate_job_built_an_ios_game/
======
hardwaresofton
Despite getting very close to the best possible case for an iOS game (#1 on
app store for a more than 0 days), am I the only one that is pretty
dissapointed at how he was compensated? He didn't actually make $700k -- after
Apple took theirs, and the gov't took theirs, he was left with ~$150K in his
most successful year...

I guess the freedom to do nothing while your app just rakes in money is great,
but it seems like the probability of hitting this case is very low, and a
stable job (though he would have possibly not liked the monotony) would have
made him much more money.

All this said, I'm about to strike out on my own with a one man LLC, so as
others have said, this information is golden.

[EDIT] - Many have pointed out that I missed the ~$280K that he gave to his
partner (the content creator) -- so in his most successful year, he stood to
make (had he been truly solo) ~$430K, which actually is pretty substantial,
for a one time effort... But what is the probability of someone's iPhone game
getting to #1 on the app store?

~~~
jonnathanson
He implies that this happened organically, without paid installs. And his
price point is $.99 at the time of this writing. And he doesn't use IAP.

Those are choices he's made that drastically limit the upside he could earn. I
respect the hell out of those choices, to be clear. But they are choices.

It's well understood that the way to _actually_ strike gold in mobile gaming
these days is to get to a point where you're arbitraging paid installs. You've
got IAP hooks up and running, you've got quasi-addictive mechanics dialed in,
and your blended CAC is less than your LTV on converted installs. You spend a
boatload on installs every week, which are recouped by the revenue you earn
from your casuals and especially your whales. Now you're in the shitty IAP/P2W
business, alongside everyone else. Now your game kinda sucks. But now you're
minting money.

That's pretty much the BigPublisher playbook. Indies can run it, too, albeit
only to a point, and with a lot of soul sacrifice.

All of that said and done, I am impressed and inspired by what the author has
been able to accomplish organically. And, while his earnings may seem
depressing from an outside perspective, they are respectable, and to be
respected. If he wants to build a larger business from here, again, he'll have
to make some Faustian choices as outlined above. Or he'll need to raise his
price points and/or adopt a high/low versioning approach.

This is the way the world is going to work until Apple and Google decide to
put the smackdown on paid installs. Which they won't, because their big
publishers make them so much money, and their big publishers have optimized a
formula reliant on paid installs and drowning out the small guy.
(Theoretically, feature placements are supposed to counteract this phenomenon
-- but, as the author points out, they accrue most readily to the big
publishers, who can afford to invest millions in production values, and whose
games are big enough to be itemized on the App Store's monthly earnings
statements.)

~~~
onewaystreet
> I respect the hell out of those choices

Why? What's noble about leaving money on the table?

~~~
jonnathanson
I don't begrudge people who are in it for the art, or for the love of the
game. Some of them are naive, sure. But plenty others make that choice
intentionally. For reasons of game design, or reasons of personal ethics. And
good for them.

I have several very close friends who graduated cum laude from fantastic
schools and chose to become high school teachers instead of lawyers or
bankers. Should I begrudge them that choice, as well?

------
smaili
Truly a great writeup - I don't think I've ever seen a breakdown in greater
detail than this regarding someone's experience building an app.

For me personally, this was the most inspiring piece:

 _Publishers are not created equal. It 's something I learned very quickly
when trying to understand the App Store feature mechanics. If you are Warner
Brothers, SquareEnix, Kim Kardashian, King, etc, you get a red carpet to
getting featured. You can release whatever trash or shoddy port you want, and
you'll get featured. So you have two options, accept this and play by the
rules I'm about to lay out, or don't participate._

~~~
giarc
Same goes for Apple's 30% take. You either pay it, or you don't ship an iOS
app

~~~
cylinder
Does anyone want to bet on how many years it will take for Apple App Store to
attract antitrust attention from the government? Eventually they will get
pressured on this fee.

~~~
giarc
I don't know. For one, iOS doesn't control the market. Recent stats show iOS
at 13.9% share [0]. Second, Google (and presumably others) take the same 30%
[1]. As a part time developer that recently dealt with this 30% issue, I hate
the fact they require it, but I understand why. Distributing the apps to
millions of phones isn't free.

0 - [http://www.idc.com/prodserv/smartphone-os-market-
share.jsp](http://www.idc.com/prodserv/smartphone-os-market-share.jsp) 1 -
[https://support.google.com/googleplay/android-
developer/answ...](https://support.google.com/googleplay/android-
developer/answer/112622?hl=en)

------
jiiam
Extremely helpful post: insightful and inspiring. This author's comment also
underlines the modern situation of the self employed:

"I'm a single person LLC with practically zero expenses (I paid a whopping $3k
for my MacBook and made $700k), so Uncle Sam is going to get his money. I save
a bit based on marginal tax rates, but pretty much I'm SOL because the tax
system doesn't understand how a single guy can make so much."

~~~
brianwawok
He could have done an S Corp or something to keep more of the profits in the
business and avoid paying personal income taxes on all of it, no? Depends on
long term play I guess.

~~~
Scirra_Tom
When you want to draw the profits as salary you'd be taxed on it anyway?

~~~
ihsw
He can do things with it before giving himself a salary, things that can be
taxed less.

~~~
Scirra_Tom
Such as?

~~~
defen
Pay people to create art / music / assets for his next game?

~~~
Scirra_Tom
Are you not allowed to subcontract services and deduct as an expense as a sole
trader?

~~~
defen
I'm not at all an expert on this subject, but if you pay income taxes on your
2015 income, that's less money you have to spend on expenses in 2016. If it
stayed in the corporation you might not take as big of a hit.

------
bsamuels
only tangentially related, but I think it's screwed up that apple can take a
30% cut of absolutely all the money moving through the ios platform and not
have an antitrust suite brought against them

if microsoft can get screwed by the FTC for bundling IE with windows, why
can't apple get screwed for only allowing app store apps on their devices?

~~~
megablast
Apple, Google and Microsoft all charge 30%.

And before Apple came along, to get your app published (J2ME days), you had to
get a publisher who would take 70 to 80%.

~~~
lucaspiller
Another similarity is ThemeForest. In their example calculation, a non
exclusive author gets $36 when selling an item for $100.

[http://themeforest.net/become-an-author](http://themeforest.net/become-an-
author)

~~~
usaphp
Even if you are an exclusive author - you are only getting 50% when you start,
then it grows up to 70% once I reach 75k in sales. On top of that you HAVE to
provide support for all your items which nobody pays for

------
tsunamifury
Even the lucky few who get outsized returns find it unsustainable...

~~~
mdorazio
Exactly this. The writeup is excellent, but also shows exactly how hit-driven
the app market is. The dev made one game (based on already-successful IP) that
generated a lot of revenue, and then the subsequent games are only modestly
successful.

I think one of the big "do's" from the article is very good advice: don't
spend huge amounts of time working on an app and expect it to provide a
return. The dev says 2 months of part-time work should be a target, and that
seems about right to me as well. Beyond that you're just asking for negative
returns if you value your time highly.

~~~
forgetsusername
> _The dev made one game (based on already-successful IP) that generated a lot
> of revenue, and then the subsequent games are only modestly successful._

And now is going write a book and probably go on to become an "expert" and do
consultation on how to successfully repeat a process that they themselves
couldn't repeat in practice.

The transparency and information in the post is awesome, but I don't see any
systematic path to success here, in what is the crap-shoot of the App Store.
One-hit-wonders are everywhere.

------
spoinkaroo
For comparison, the most popular game creator makes over 10 million per day
over 4 games, with over 4 billion in revenue per year. This creator is
supercell, with Clash Royale, Clash of Clans, Boom Beach and Hay Day

Edit - They made 2.5 billion last year with nearly a billion in profit, so
they may reach 10 million a day this year.

~~~
animal531
Comparison to the other side, the guy on the bottom end is lucky if he's
making any amount and could very well be far into the red every month.

More interesting I think is to look at the average, where I very much doubt
that the average developer makes anything more than a handful.

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alc90
Really insightful post, thanks for sharing. It's been a while since I've seen
this kind of success stories from indie developers. I feel like there's a
trend right now that is focused more on telling how bad the App store is and
how screwed you are if you're developing mobile apps/games.

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fsnb
45% tax?

In Poland I would pay 19% linear tax + $50/month for medical and social
insurance in first 2 years, $160/month after 2 years. Nothing more.

~~~
vacri
daveguy below goes through why the 45% tax claim is bogus.

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chvid
Congratulations on a very nice and innovative piece of work.

Articles like these are encouraging but skews the full picture.

For a game like this there are hundreds pieces of work with equal cost and
complexity that get absolute no downloads in the app store.

------
WA
Wait, you need to ask Apple to have your app featured?

This is a really insightful post, but at the same time, I don't even want to
bother with all the Do's and Don'ts. See, I don't develop games. I have a
total niche app product and Apple does exactly zero things for me and still
wants 30%. I even drive the people to the app store through my website.
Exposure? No. Payment handling? Could do this myself. New users? Not really.

Luckily, my web app makes 10x more money than the stupid app.

~~~
rogerbinns
> ... Apple does exactly zero things for me and still wants 30% ...

I'll bite. The Romans, err I mean Apple have done nothing, except at least
these:

* Maintains a user database including authentication, plus all the support costs (lost password support is very high)

* Payment handling (you dismiss it, but no one does it for free) including keeping up with tax authorities and legal systems in much of the world

* Almost unlimited (re)downloads for users to a reasonable number of devices. Bandwidth is cheap but not free.

* Backup and restore for application data. (You may not use it, but that functionality is available to apps without extra fees.)

* A curated walled garden including a review process. I'm sure your app is fine, but Apple keeping the dregs out and avoiding the place turning into a cesspool means users can be more confident about the apps and that halo effect helps all apps in the store.

* Mechanisms to extend your app such as IAP, and an advertising solution etc

* Access to a large user base, with reasonably fair rules that everyone has play by

* They make all the above work together

The case can be made that the benefits used vary by app, but in aggregate it
isn't an unreasonable amount for them to charge. It is worth noting that
competitors haven't done anything substantially different.

~~~
WA
Yes, you're right _generally speaking_. But I'm just pointing out that _for
me_ (!) with a niche app(!) it doesn't work out and I need nothing of the
stuff you mentioned. Payments? PayPal and Stripe are reasonably priced and
compete with each other. This makes prices reasonable.

Maybe I can make my point more clear by saying what I expect from Apple: Let
me publish an app and don't tell me how to run my business. I want to put up
an app in store that uses external payments. Apple doesn't want this. Well,
kind of, sort of. The App Store Guidelines section 11 are pretty clear on what
Apple expects:

 _Don 't charge people outside of the App Store, because we want a share of
that pie. And if you do, we ain't gonna like it. We might approve your app, we
might not. We might change our mind, too. Depends on how explicit you're
selling your stuff._

And for a long time, it was simply not possible to offer apps that are paid
for outside the App Store. And now, it's still very vague. You have to offer
an app that also works without requiring a paid account.

Anyways, thanks for the input. I take this discussion to reconsider my
position and think of a way how I can make this work. I must admit that Apple
changed the rules over the recent months a bit. It's maybe a bit more flexible
now.

~~~
rogerbinns
Their payment approach may seem to be a bit overreaching, but it does make
sense. Remember they still provide all the services I listed for apps. If you
provide your app for free then Apple makes nothing as well, while still
providing those services. It isn't unreasonable to then say that if you make
money, Apple gets some too.

It also isn't a bad idea from an incentives point of view. Apple make more
money if their developers make more money. And the benefits accrue just over
double to the developer than they do to Apple. Similarly developers being less
successful also hurts Apple. At least the 30% cut means Apple have to keep
earning it.

Remember that as a developer you can walk away, and support other platforms
instead. You can avoid stores completely and do everything yourself. With rare
exceptions, you are very unlikely to do as well.

~~~
WA
> At least the 30% cut means Apple have to keep earning it.

I think this is exactly the point that gives me the bad feeling: If Apple
really provided "the best service", people would _buy_ their services from
them and the price would be dictated by demand and competition (ironically,
just like the price of apps in the App Store, which tends to go down over
time).

But this is not how it works. People aren't free to choose which services they
want to buy from Apple and whether they want to buy from Apple at all (if they
want to be in the iOS playground). Apple forces their services on everybody.
There is only a single package: Take it or leave it.

> Remember that as a developer you can walk away, and support other platforms
> instead.

Theoretically it's true, but ultimately, the customer decides. Although I put
a lot of effort into a very nice mobile-first web design, which will hopefully
render the app unnecessary in the long run. Together with the "always online"
trend and increasingly better mobile internet connections, this might work
out.

Thanks for your thoughts, I appreciate them. I don't want to sound as if I'm
only arguing my position here. I'll think about the stuff you said.

~~~
rogerbinns
Developers are not Apple's customers - the people who buy the devices are.
Those people have freely chosen Apple and continue to do so.

There is another way to look at Apple's cut, even when you as a developer
consider it unfair. For the end users it establishes a certain amount of
credibility. Apple places certain hoops developers have to go through as well
as taking some money. An end user is going to find a solution that can do all
that far more credible than one that can't.

It is different now, but a few decades ago one of the functions of advertising
was credibility. If a product was advertised, it meant there was an aura of
success about it (the money to advertise has to come from somewhere and
someone has to stand behind it) and that success was sufficiently great to
spend some of the revenue on ads. The bigger the ad spend, the more
credible/success there is perceived to be. Everyone will be a lot more
skeptical about something that can't even afford to advertise, or does so
"cheaply".

The same thing is happening with university education. Someone attending one,
spending real money and persevering is more credible than someone taking a few
online courses, even though the actual education they could get is similar.

Circling back to Apple, the app store is already saturated, and I suspect
Apple will be more than happy to raise the bar some more. The most credible
apps are what they and the users will want. Imagine they added a section for
folks like you "these apps use none of our services and we take no cut from
them". That section would smell like failure, not success.

~~~
WA
That's a very interesting perspective. Haven't considered that before.

------
paulpauper
The problem is the odds of such success are slim. There are too may apps, too
many developers, not enough eyeballs. But good for him though, and very
inspiring and informative.

I think easier money can be made with buying deep in the money call options on
3x versions of the S&P 500 and the bond market, which is what I and my dad
have been doing for awhile with success. Don't need coding skills or luck to
make money with the S& 500

~~~
misiti3780
this sounds interesting - can you provide some more details?

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JabavuAdams
Thanks to the author for sharing this info. That said, the app's downloads
peaked in 2014, which was a different App Store.

------
philliphaydon
All that tax...

~~~
malchow
Obscene, isn't it? He could have sent a kid to college for the amount of tax
he paid.

~~~
equalsnil
Well, he paid for roads, schools, national defense, politicians... Taxes
aren't just a black hole that go nowhere, you know.

~~~
ivanca
That's the theory, in reality it goes to both. One part ges to
roads/schools/etc and another part goes to a pile of corrupted politicians or
unnecessary middlemen or completely useless endeavors.

The black hole in America is a pretty big one, is just that the taxes pie is
big enough and there is enough for both the black hole and the good projects,
but the pie is shrinking and people is starting to get angry and to make
stupid decisions...

------
transfire
I am dumbfounded. This guy grossed 700Gs from a take on Cave
([https://en.wikipedia.org/wiki/Colossal_Cave_Adventure](https://en.wikipedia.org/wiki/Colossal_Cave_Adventure))?

------
smhanov
I make a Saas web application and I still got something from this. I'm going
to commit some $$$ and buy some other Saas apps to see what they do right.

------
kelukelugames
Caveat: The game capitalizes on existing IP. He ported a well-liked browser
game into iOS. The games he created himself are not doing as well.

~~~
inDigiNeous
According to this: [http://www.newyorker.com/tech/elements/a-dark-room-the-
best-...](http://www.newyorker.com/tech/elements/a-dark-room-the-best-selling-
game-that-no-one-can-explain)

He worked on this together with the original creator.

~~~
deelowe
And split the revenue.

------
metaphor
Any idea why the OP chopped a clean 33% from gross income to account for
income tax? This doesn't make any sense to me whatsoever.

~~~
daveguy
I was about to post on this. Either he is misrepresenting his taxes to make
for a good story or he had a terrible accountant that had him pay too much in
taxes.

Contrary to popular (conservative) belief, when you go up to a higher tax
bracket you are not taxed on your entire income at that rate. It is only the
amount in that bracket that is taxed at the higher rate. His taxes should be
$48,663 not $91,245. If he was already making above $183,250 from other income
then, yes it would be taxed at that higher rate. Although you can't
distinguish between the income that was taxed at a higher or lower rate, so it
sounds like he is misrepresenting his tax burden either way.

He does mention for the second year that he is "still at 33%" because of other
contract work, so it looks like he just wants to over represent the taxes of
someone pulling in a certain amount from an app.

EDIT: Oh, later in the reddit thread he does mention he "saved a bit based on
marginal tax rates". A bit, my ass. He paid about half the 33% he claimed --
$42,000 LESS than the $91,245 claimed based on that income. Saying the other
income is the income on which he saved the marginal tax and that he had to pay
a full 33% on the app income is just disingenuous.

~~~
pbarnes_1
Yeah, the original post should be edited to reflect actual tax paid.

------
kevindeasis
He has a pretty good playbook for ios games. Are there other playbooks out
there?

Like "How to start a startup" by YC

