Over $700k selling a premium mobile game(reddit.com)
reddit.com
Over $700k selling a premium mobile game
https://www.reddit.com/r/startups/comments/4f74dv/quit_my_full_time_corporate_job_built_an_ios_game/
18 comments
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.)
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.)
I think P2W has ruined IAP for most people. I highly like IAP when it's stuff like paying for chapters of a game that you then own permanently and pay for when you want. Admittedly that's a less exciting business model, but I'm a lot happier paying $5 for a chapter of a game 4 times with the possiblity of new content in the future than $15.00 up front without having played the game.
What sucks is the IAP are business models where you pay to win, have a limited ability to play the game on any day, and the advantage from paid goes away if you don't play on any day. Those models basically create crappy but addictive games that are essentially legalized lottery systems for minors without the cash winnings.
What sucks is the IAP are business models where you pay to win, have a limited ability to play the game on any day, and the advantage from paid goes away if you don't play on any day. Those models basically create crappy but addictive games that are essentially legalized lottery systems for minors without the cash winnings.
Agreed. IAP for additional content is totally cool. Hell, even IAP for things like rare items or what have you are fine with me. We're just starting to toe a line at that point, but we haven't crossed it yet. We cross that line when we bury basic game functionality behind an IAP paywall: paying for "gems" to keep playing, or paying for items necessary to beat certain stages. Now we're in P2W Land, and the clouds above our heads are choked with grime and soot.
IAP done in a player-friendly way won't earn you P2W-level megabucks. But it'll do slightly better for you than a pure pay-once model will.
IAP done in a player-friendly way won't earn you P2W-level megabucks. But it'll do slightly better for you than a pure pay-once model will.
> Hell, even IAP for things like rare items or what have you are fine with me.
Unless those items are purely cosmetic, that's pretty much the definition of P2W.
Unless those items are purely cosmetic, that's pretty much the definition of P2W.
Sorry for the (probably) stupid question: what's IAP? I can't grasp it from the context.
Agreed, if I see the equivalent of "coins" or "gems" or other point mechanism displayed in a ladder pricing in a game, despite all the hype that may be going for it, I lose complete interest.
It's a huge pain in the ass to dig through games, find ones that are IAP but not P2W (e.g. Ascension, Carcassonne, etc) and enjoy/support them, but that's how I use the app store.
It's a huge pain in the ass to dig through games, find ones that are IAP but not P2W (e.g. Ascension, Carcassonne, etc) and enjoy/support them, but that's how I use the app store.
Sorry - what is a paid install? I am inferring its Someone who is paid money to install a game and play it? Presumably on the basis they will spend more on the In-App Purchases than receive for installing it? Or is it more sinister than that (which seems the same as asking people "excuse me, are you a sucker and do you have an iPhone?")
Seriously, Apple have not smacked this down? Or regulators?
Seriously, Apple have not smacked this down? Or regulators?
Pretty sure paid install is just what it sounds like (and what you guessed) -- just paying some small fee for someone to install the thing.
Technically, you can think of any marketing or advertising effort in terms of installs and daily users (and that's usually how people do, or try to, in the new "data-driven" marketing/advertising world).
There is value to simply having crazy high install numbers (even if those installs aren't daily users) - press, recognition by the app store, etc.
I doubt apple can really do much to smack this down, it's kind of a cat and mouse game -- how are they going to stop people from installing something, when mobilized through some other avenue to do so?
Technically, you can think of any marketing or advertising effort in terms of installs and daily users (and that's usually how people do, or try to, in the new "data-driven" marketing/advertising world).
There is value to simply having crazy high install numbers (even if those installs aren't daily users) - press, recognition by the app store, etc.
I doubt apple can really do much to smack this down, it's kind of a cat and mouse game -- how are they going to stop people from installing something, when mobilized through some other avenue to do so?
It is arbitrage.
Publisher (him) pays a company $xx per install.
Company (ad network) offers this to its advertisers who get payed $xx-x per install.
Advertisers advertise this app with their own creatives and angles (normally have to be approved by publisher or at very least the ad network as well as their traffic source) on different traffic sources such as FB ads, Google Adverts, and other networks. The advertisers are media buyers - they buy media and sell media and use arbitrage to make positive ROI.
This is what paid installs is.
The arbitrage idea is that you generate positive ROI (return on investment) from your P2W or IAP making more per customer than it costs to get that customer playing your game.
Publisher (him) pays a company $xx per install.
Company (ad network) offers this to its advertisers who get payed $xx-x per install.
Advertisers advertise this app with their own creatives and angles (normally have to be approved by publisher or at very least the ad network as well as their traffic source) on different traffic sources such as FB ads, Google Adverts, and other networks. The advertisers are media buyers - they buy media and sell media and use arbitrage to make positive ROI.
This is what paid installs is.
The arbitrage idea is that you generate positive ROI (return on investment) from your P2W or IAP making more per customer than it costs to get that customer playing your game.
The platform companies hire salespeople to promote and facilitate the "paid install" advertising business, it's part of their monetization strategy.
> I respect the hell out of those choices
Why? What's noble about leaving money on the table?
Why? What's noble about leaving money on the table?
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?
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?
That money will fundamentally change the nature of your products. Others will have different thoughts, but I didn't get into the business to run shady F2P pseudo-casinos. (And it looks like neither did the op.)
Being cool is a big selling point.
IAP and Ads are not 'cool' for users or reviewers.
Maybe this success needed a the lack of Cruft and Crud.
Maybe this success needed a the lack of Cruft and Crud.
> after Apple took theirs, and the gov't took theirs, he was left with ~$150K in his most successful year...
You've left off the biggest deduction, $280,000 to his partner. 3x more than he paid to the government in taxation.
You've left off the biggest deduction, $280,000 to his partner. 3x more than he paid to the government in taxation.
Well, let's just say that I think if you look at the top 10% of salaries in this industry, compared to other industries, it's probably not great.
Note I'm talking about salaries of people, not Supercell's income.
i.e. if you look at the top 10% earning doctors, lawyers, musicians etc, I don't expect the app store to look great.
And if you look at the median, the app store will likely be very, very substantially subpar.
And if you look at the bottom 10%, it's probably a complete joke.
All in all, I don't think the app store is an interesting place anymore for the average dev. But that's probably true of most entrepreneurs I feel. It's so hard to compete with big businesses, that you're either in a niche they can't conquer, doing something special, or you're losing to them. It's either great, or shit, and the great is a tiny percentage.
Note I'm talking about salaries of people, not Supercell's income.
i.e. if you look at the top 10% earning doctors, lawyers, musicians etc, I don't expect the app store to look great.
And if you look at the median, the app store will likely be very, very substantially subpar.
And if you look at the bottom 10%, it's probably a complete joke.
All in all, I don't think the app store is an interesting place anymore for the average dev. But that's probably true of most entrepreneurs I feel. It's so hard to compete with big businesses, that you're either in a niche they can't conquer, doing something special, or you're losing to them. It's either great, or shit, and the great is a tiny percentage.
But also on the other hand (depending on the title/stage of development) you can possibly count it as passive income...in which case it's a very nice addition.
But I agree on the app store, the $1 market just makes it so that the average person will never make any real amount of money.
But I agree on the app store, the $1 market just makes it so that the average person will never make any real amount of money.
You've left out the 276,500 that the owner of the content got (about 1/3 of the revenue).
Curious, is your one man LLC going to be you doing contract work? Or do you have a product/service with a business model?
After reading this article (http://www.daedtech.com/im-a-business-man/), I'm increasingly interested in starting a one man LLC "just because".
Have you found any good resources out there for the developer who decides to go it alone?
After reading this article (http://www.daedtech.com/im-a-business-man/), I'm increasingly interested in starting a one man LLC "just because".
Have you found any good resources out there for the developer who decides to go it alone?
I'm actually planning on doing both -- I plan on using the LLC to travel, and taking enough runway for roughly a year. If in that time I can't bootstrap some business that provides a livable amount of recurring revenue, I'll be contracting/consulting where I can.
Worst case, run out of runway, and start contracting for some big company where I plan to move (or come back to the states)
I dunno if starting the LLC "just because" makes sense -- you can report side-work on your taxes even if you don't make the LLC... I didn't really look for resources on going it alone, mostly because I just don't think there's that much in it. Maybe I'm underestimating the amount of effort here, but I expect some more stress around tax time, and maybe having to create a business bank account but other than that, I get the feeling I won't think about it much.
Worst case, run out of runway, and start contracting for some big company where I plan to move (or come back to the states)
I dunno if starting the LLC "just because" makes sense -- you can report side-work on your taxes even if you don't make the LLC... I didn't really look for resources on going it alone, mostly because I just don't think there's that much in it. Maybe I'm underestimating the amount of effort here, but I expect some more stress around tax time, and maybe having to create a business bank account but other than that, I get the feeling I won't think about it much.
Have you played the game? A senior engineer could have ported this in a month, easily. It's a really really great game, but, he didn't create it. Just ported it. And it's just text.
His partner's calculations for their $280K-odd would look the same. Had he been working alone he'd have ended up with more like $300K. (But you tell me... I'm not familiar with the ins and outs of US tax laws.)
You're right, it's absolutely disgusting how much they take for doing essentially no work.
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.
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.
Same goes for Apple's 30% take. You either pay it, or you don't ship an iOS app
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.
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 1 - https://support.google.com/googleplay/android-developer/answ...
0 - http://www.idc.com/prodserv/smartphone-os-market-share.jsp 1 - https://support.google.com/googleplay/android-developer/answ...
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."
"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."
Well he wasn't a single guy, he had a partner that he gave $276,000 to. That was his expense, as it is a tax deduction and accounted for on his spread sheet.
Thats a huge tax deduction and I look forward to writing off my subcontractors from the tax I have to give to Uncle Sam.
Thats a huge tax deduction and I look forward to writing off my subcontractors from the tax I have to give to Uncle Sam.
I don't understand his comment, he made a lot of money and thinks he would of been better off if he had a ton more expenses or something?
There are all kinds of deductions available to corporations that are not available to sole traders.
Which ones aren't related to expenses?
Such as?
I don't believe this is really true, would love to find some examples though.
I don't believe this is really true, would love to find some examples though.
This isn't true at all. Well, not that I can think of. Solo is tough in that it's easy to "pierce the corporate veil" when it comes to legal liabilities and whatnot, but there's not a thing I can write off now that I couldn't as a solo - well save everything related to employees, but, ya know, "solo." But sub-contractors are a perfectly acceptable expense.
If that were true (doubtful) then just create a corporation. Cheap and easy, at least here in these United States.
Things he could have deducted:
Electricity, phone, internet.
If he worked at home, then part of his rent.
Travel if he worked at home and at an office.
Electricity, phone, internet.
If he worked at home, then part of his rent.
Travel if he worked at home and at an office.
He can only deduct it partially based on a proportions he uses this for the business. I am pretty sure he uses electricity and Internet for personal stuff too. And to calculate rent deduction for a home office you have to measure your living space and space that you use solely for business, the deduct a percentage of rent based on a space it occupies. Based on my experience the deduction amount is quite pathetic...
He likely worked out of his home, I wonder why he didn't deduct office space. Likely could have deducted internet cost as well.
He wouldn't have paid so much in taxes. But he still would have not had the money. He's being an honest citizen and just giving the government the money, as, like he said, all he really did was work with his own knowledge.
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.
You can't leave profit in an S-Corp without first paying income taxes on it.
The real benefit of S-Corp is to shift the cashflow from earned income (subject to self-employment taxes) to profit distributions (not subject to SE tax). But you pay the same Federal income tax on both. However, whether an S-Corp is worth it financially depends on a lot of factors, including how much you make, what constitutes a reasonable salary, your risk tolerance, and how your state taxes these different forms of income.
The real benefit of S-Corp is to shift the cashflow from earned income (subject to self-employment taxes) to profit distributions (not subject to SE tax). But you pay the same Federal income tax on both. However, whether an S-Corp is worth it financially depends on a lot of factors, including how much you make, what constitutes a reasonable salary, your risk tolerance, and how your state taxes these different forms of income.
Should look into SEP IRA, can set aside 20% of the proceeds for retirement tax free up to 50k.
Had a windfall years ago and really regret not doing this.
Had a windfall years ago and really regret not doing this.
When you want to draw the profits as salary you'd be taxed on it anyway?
He can do things with it before giving himself a salary, things that can be taxed less.
Not really. I'm not aware of any deductions that he could take as an S-Corp that he couldn't take as sole proprietor or LLC.
Such as?
Pay people to create art / music / assets for his next game?
Are you not allowed to subcontract services and deduct as an expense as a sole trader?
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.
[deleted]
S Corp doesn't pay Corporate income taxes like a C Corp, but all profit flows through to the owners and is taxed at their personal rate.
Both S-Corp and LLC are pass-through entities; there is no difference in terms of tax treatment.
There is a massive difference in tax treatment.
No self employment tax on distributions from an S Corp.
No self employment tax on distributions from an S Corp.
I think this thread proves if nothing else that most programmers, myself included, could very much use an accountant :) We all know stuff, but not all of it is right or complete...
He could have left the money in the corporation. He's not very smart, tax wise.
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?
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?
You can see FTC's own explanation here:
https://www.ftc.gov/tips-advice/competition-guidance/guide-a...
It's hard to see how Apple taking a 30% cut in their App Store meets any of the criteria.
https://www.ftc.gov/tips-advice/competition-guidance/guide-a...
It's hard to see how Apple taking a 30% cut in their App Store meets any of the criteria.
I thought this argument was long dead. Go talk to an MBA, and ask them if they'd like to sell something that netted them 70% of retail price. That 30% cut, among other things, includes processing payment for your application and handling fraud.
For physical item retail, the creator would by lucky to get even 30% of the final retail price - wholesaling, transport, retailing, so on and so forth, they all take their own cut.
Edit: rogerbinns below has a much better list of what you get for your 30%
For physical item retail, the creator would by lucky to get even 30% of the final retail price - wholesaling, transport, retailing, so on and so forth, they all take their own cut.
Edit: rogerbinns below has a much better list of what you get for your 30%
One is "I don't like that Apple takes my money", the other is a company abusing their platform to choke out competitors.
Apple is free to charge whatever they want to play inside their walled garden. Lets say the cost of all the engineers, infrastructure & bandwidth to run the app store cost 30% of all the revenue in the app store. What right does the government have to dictate that Apple should run the app store at cost, or at a loss?
Apple is free to charge whatever they want to play inside their walled garden. Lets say the cost of all the engineers, infrastructure & bandwidth to run the app store cost 30% of all the revenue in the app store. What right does the government have to dictate that Apple should run the app store at cost, or at a loss?
> the other is a company abusing their platform to choke out competitors.
The line is a lot blurrier than that. For example, Bitcoin wallets were disallowed on the App Store... until after Apple Pay was launched when they suddenly became OK again.
The line is a lot blurrier than that. For example, Bitcoin wallets were disallowed on the App Store... until after Apple Pay was launched when they suddenly became OK again.
Even if Apple were found guilty of using their platform to suppress blockchain tech, it wouldn't change the fact they could still charge 30%.
Before the app store model became popular, it was much more expensive and difficult to get your content published. Until 10 or so years ago, the most common channel for selling video games was retail, which meant you had to go through a publisher who -- if you could convince them to publish your software -- would take a massive chunk of the profits.
It's no mistake that the "golden age" of indie gaming has coincided with the availability of platforms like Steam and the mobile app stores. 30% might seem like a lot, but for many developers, it's probably much less than what the channel is worth.
It's no mistake that the "golden age" of indie gaming has coincided with the availability of platforms like Steam and the mobile app stores. 30% might seem like a lot, but for many developers, it's probably much less than what the channel is worth.
How is it any different than a retail mall charging rent based on square footage and revenue?
There are thousands of malls out there. You're not locked into one. However, if you want to get any sort of app for the entire iOS ecosystem, then you have to go through a single chokepoint, and 30% of the developer's money goes to Apple for the privilege.
There are 3 or 4 different OS you could go with though. Android, Windows, Apple and BB. And then there are multiple stores for Android you could go with.
30% of the money goes to Apple for taking care of everything for you, money, hosting, servers, marketing, and more.
30% of the money goes to Apple for taking care of everything for you, money, hosting, servers, marketing, and more.
The difference is, in the late 90s Microsoft really had a monopoly. Even graphic designers had moved to Windows in the 90s because Photoshop, Illustrator, Macromedia Director were ported to Windows.
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%.
And before Apple came along, to get your app published (J2ME days), you had to get a publisher who would take 70 to 80%.
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
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
When J2ME was first starting, we were told something in the neighborhood of $50K per carrier just to be listed in their stores, and that wasn't fixed – it was all per-project and sounded likely to go up for a big client.
Yup ... I was trying to be an indie dev in the old J2ME days .. the insane fees from carriers killed the dream for me. I ended up missing the entire app store revolution since I had preconceived notions of what carriers would allow. Too early to mobile I guess :p Curious .. how did you fare?
That actually killed the projects we'd been talking about - we'd been doing web and Flash work for a couple of clients and they decided not to try J2ME once they heard about the pricing.
There are a lot of things a company can't do when they're a monopoly that non-monopoly companies can.
Microsoft was abusing retailers and system builders because those vendors didn't have an alternative option.
I agree the 30% is atrocious, but not likely illegal.
Microsoft was abusing retailers and system builders because those vendors didn't have an alternative option.
I agree the 30% is atrocious, but not likely illegal.
This explanation is circular. Microsoft had a legally determined monopoly, not a real actual market monopoly where no one else could participate in the market.
For instance, Apple made computers that were such sufficient substitutes for Windows computers that Microsoft chose to produce a version of one of the their core products for use on Apple computers.
For instance, Apple made computers that were such sufficient substitutes for Windows computers that Microsoft chose to produce a version of one of the their core products for use on Apple computers.
30% on a $0.99 game where apple is eating the credit card costs along with hosting, making sure the store isn't overwhelmed with spam and malware and bringing millions of eager paying customers to your table hardly seems atrocious.
I refuse to believe it's anything but a cash cow for Apple.
That 30% cut got them 6 billion dollars in 2015.
That 30% cut got them 6 billion dollars in 2015.
Which means they made $14 billion for developers.
Wal-Mart made $130 billion in profits in 2015 on $486 billion revenue, 27%. This is how stores work.
Wal-Mart made $130 billion in profits in 2015 on $486 billion revenue, 27%. This is how stores work.
Even the lucky few who get outsized returns find it unsustainable...
That's not an entirely fair assessment, at least in this case. He ported a popular Web game with about 3 hours of content to an iOS game. He made about $700,000 gross on that. He then followed up with a few partial attempts at similar games that were either a) built to be exceptionally hard (The Ensign) or b) unfinished and barely playable (A Noble Circle). I'd say the unsustainable part for him is his entire (lack of) business plan. It shows very little other than the fact that very little sticks when you throw random things at a wall.
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.
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.
>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.
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.
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.
Edit - They made 2.5 billion last year with nearly a billion in profit, so they may reach 10 million a day this year.
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.
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.
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.
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.
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.
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.
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.
> ... 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.
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.
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.
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.
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.
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.
> 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.
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.
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.
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.
That's a very interesting perspective. Haven't considered that before.
> It is worth noting that competitors haven't done anything substantially different.
I can download an .apk directly from a developer if Google doesn't want to host it on the app store. I've done this, for example, with the Betfair app.
That's a pretty huge difference.
I can download an .apk directly from a developer if Google doesn't want to host it on the app store. I've done this, for example, with the Betfair app.
That's a pretty huge difference.
You are talking about a difference in platforms, not in stores and services they provide. Pretty much all the app stores on all the platforms charge 30%. They also offer substantially the same services.
The post is almost entirely true for non-games too. I have a successful app and these are the exact things Apple want.
Also, like he said, don't complain, just deal with it. Saying they do nothing for you isn't entirely true, or you wouldn't have an app on the App Store.
Also, like he said, don't complain, just deal with it. Saying they do nothing for you isn't entirely true, or you wouldn't have an app on the App Store.
I have an app in the App Store, mostly because my users want one. It does make a bit of money, but development has stalled and is somewhat subsidized by my SaaS. If there was only the app and not the website, it would not be economically feasible.
I'm not complaining, but stating that I'm not happy with how things go. The only reason why it's "acceptable" to give Apple 30% is because they're the only game in town. If I gave another third party 30%, they surely had to bring a bit more to the table than what Apple is offering me (in my specific situation with a niche app).
If everybody shuts up, nothing will ever change – although expressing dissatisfaction probably won't change much either I guess.
I'm not complaining, but stating that I'm not happy with how things go. The only reason why it's "acceptable" to give Apple 30% is because they're the only game in town. If I gave another third party 30%, they surely had to bring a bit more to the table than what Apple is offering me (in my specific situation with a niche app).
If everybody shuts up, nothing will ever change – although expressing dissatisfaction probably won't change much either I guess.
If you had only the website and not an app, would that be economically feasible?
> Apple does exactly zero things for me and still wants 30%
It gives you access to its customers. That's not a bad deal for many.
It gives you access to its customers. That's not a bad deal for many.
No, as I said before: I actually bring most customers myself. Most buys happen because they find my website through Google first and then decide to buy the app. See sibling posting: Users need some kind of sophistication to use it successfully.
Can you still your service on your website, and publish a free companion app in the app store?
What is your app?
Sorry, I won't give the actual name. It's a B2C app in the health section and requires quite a bit of knowledge by its users. So, this basically disqualifies it as ever being featured, because the users need to be a bit more sophisticated than average joe browsing the category page in the App Store.
med school app?
Any tips on following a similar path to creating profitable apps?
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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
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
this sounds interesting - can you provide some more details?
are you talking about SPXL ?
Thanks to the author for sharing this info. That said, the app's downloads peaked in 2014, which was a different App Store.
All that tax...
Obscene, isn't it? He could have sent a kid to college for the amount of tax he paid.
The tax system punishes people who make wealth quickly (windfalls) and have to pay at the highest bracket, versus individuals who earns the same amount of money but more slowly and pay at a lower bracket.
I think most of us can live with the tax system not being optimised for the few individuals that strike it lucky in one year and then do not much at all for the next half-decade.
The issue is not with people who strike it lucky in one year, the issue is people who invest in multi-year projects and then receive the payoff in a short time. There needs to be some way of being taxed over the total time spent on a project, rather than the time spent receiving a cheque at the end.
As a proportion of taxpayers, how many would have that pattern? Should the tax system be optimised for that proportion?
And it's a no-win situation - how do you prove how long you've been working on a project? How outraged would people be to be back-taxed? After all, if you want to spread your taxes over previous years, you now need to pay more taxes for those previous years. And how do you differentiate between a 'lucky windfall' earner, and someone who has simply engaged in a lucrative new career (such as students moving into professional careers)?
The difference in marginal rates is noticeable, but not crippling, and this 'lucky windfall' pattern of earning is not very common.
And it's a no-win situation - how do you prove how long you've been working on a project? How outraged would people be to be back-taxed? After all, if you want to spread your taxes over previous years, you now need to pay more taxes for those previous years. And how do you differentiate between a 'lucky windfall' earner, and someone who has simply engaged in a lucrative new career (such as students moving into professional careers)?
The difference in marginal rates is noticeable, but not crippling, and this 'lucky windfall' pattern of earning is not very common.
Well, he paid for roads, schools, national defense, politicians... Taxes aren't just a black hole that go nowhere, you know.
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...
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...
I am dumbfounded. This guy grossed 700Gs from a take on Cave (https://en.wikipedia.org/wiki/Colossal_Cave_Adventure)?
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.
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.
According to this: http://www.newyorker.com/tech/elements/a-dark-room-the-best-...
He worked on this together with the original creator.
He worked on this together with the original creator.
And split the revenue.
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.
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.
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.
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Yeah, the original post should be edited to reflect actual tax paid.
He has a pretty good playbook for ios games.
Are there other playbooks out there?
Like "How to start a startup" by YC
Like "How to start a startup" by YC
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?