

What Really Makes Free Mobile Apps So Profitable? - barrynolan
http://blog.converser.io/free-mobile-apps/

======
doctorpangloss
Nearly ever top grossing app in the Apple App Store is a game. Few of them are
services or "remotes." Among the games, only about 1/6 are sequels (e.g.,
Angry Birds Space) or based on other intellectual property (e.g., Iron Man
games).

That means nearly all the money in the Apple App Store is earned by social
games you've never heard of.

Barry is right that at least part of the charting comes from how payments are
recorded. Many services don't sell subscriptions through App Store IAP, both
because subscriptions are newly permitted[0] and because a 30% revenue share
is a lot to ask from a low-margin business like Pandora.

But he is very wrong about the trend of software and services sales in
general. Games have and always will dominate consumer software and service
sales. He seems to describe himself as a remote-control app "whale," or
someone who makes an extraordinary number of purchases.

There are very many more gaming whales with smartphones than there are "remote
control" whales with smartphones.

But generally, "remote control" apps—which again, seem to just be non-gaming
services apps, by Barry's definition—don't have very many profitable things to
sell. How can you compete with the margins of virtual coins? Even music and
movie services pay margin-eating licenses on their content, especially when,
like Pandora, it is distributed for free. And all those other services—travel
or whatever—need to pay a lot of physical people for a lot of physical things.

Non-gaming services are hardly profitable. A trend of adoption of "remote
control" apps should not be conflated with a trend of profit. The composition
of the top grossing charts of any software platform are unlikely to change
away from games.

[0] [https://developer.apple.com/appstore/in-app-
purchase/subscri...](https://developer.apple.com/appstore/in-app-
purchase/subscriptions.html)

~~~
barrynolan
Asides from my ever expanding girth, I've never been described as a whale!

It all ads up...from $1,500 for TV sub, plus biz travel with hotel tonight,
taxi's here and there, netflix, spotify. You are dead right on games, and that
the IAP economy is hidden. Same too, the credit card economy/transactions
through apps is hidden. There's a lot of money behind free apps, and
everything is ad related.

------
savethejets
As a smaller game developer I have to say that the whole free model of games
worries me frankly.

At minimum it has made me more cautious with my decision to bring a title to
iOS due to the overwhelming expectation now that the game be free. If you want
an example of this check out the youtube comments of the official tiny thief
trailer. A game that debuted at $2.99. When I last looked there were an
overwhelming amount complaining about how "the game needs to be free"...

As a larger issue I'm a little more worried about how this might end in a
deterioration of the quality of experience on the iOS platform? Looking at
that image of top paid vs top grossing, one might ask the question in 5-10
years will we be talking about candy crush? hay day? conversely how about
Minecraft? Plants vs. Zombies?

------
jpreiland
It's interesting how people are willing to shell out so much on in-app
purchases for games in particular.

Not judging at all, of course. I play D&D, League of Legends, and Magic the
Gathering, all three of which have (to varying extents) an illusion of being
free. I've spent large amounts of money on each game and I don't even regret
it!

Valve has it down with TF2 and hats. From my understanding it was somewhat of
an accident (If I recall correctly, a Valve employee at a talk I attended said
that they weren't expect hats to be so huge), yet it's another great example
of how much potential free games have to rake in loads of cash. This is
certainly the direction I'll go in if I ever plan on making games (unless I
want to do a legitimately 100% free game for fun)

