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I agree with some of what you've said, and disagree with some as well. I too am a little shocked by these numbers. I expected each one of these apps to be above 1M units in sales... However, what this tells me (and what I have experienced) is that there is a lot of "meat" in the middle if you produce and maintain some quality applications. Furthermore, and this is a double edged sword, there is a short shelf life for most apps. I say double edged because this means new apps do have a shot at making some money, it's not just the guys who got to the app store first dominating the scene.

The approach is important. I too began developing apps from the get-go, but I did it in the evenings and weekends while keeping my day job. The result has been an enormous boost to my income with no overhead (other than my time) involved in the development process.

Can you sustain a business based on the app store?.. maybe, if you can keep your costs low. However I still believe the greatest benefactor from the App Store is the independent developer.

I'm surprised at everyones optimistic attitude about the app store after seeing these numbers. It is shocking and discouraging.

I have heard the analogy of the California gold rush used to describe the app store and I can tell you that these numbers confirm to me that the app store is an unsustainable bubble that will either have to burst or will completely dry up in the long run.

Just to give you some background on myself, I quit my job 8 months ago and started an iPhone app company. Since then we have released about 7 apps on iTunes. Including our latest app which has an investment, well lets say most people could have easily paid off their mortgage with what we spent (and this is only with 3 employees total).
 
So the lesson here is to totally change one's strategy for coming up with new product ideas from "something really useful" to "something totally pointless." Want to know why we haven't sent astronauts to Mars? It's because people keep spending money on stupid stuff. Pity we can divert that brainpower to bigger problems.
Really? So you think all these iPhone developers are actually just bored, underperforming, rocket scientists? :confused: While were on the subject, why are YOU wasting time and brain power, posting on a Mac rumors web forum instead of designing my rocket ship to mars? Get back to work you slacker!
 
I have always thought that the word 'Koi" was funny. So in my book put the word "koi" in the title and you have a hit. Nothing to prove me wrong yet!
 
However, what this tells me (and what I have experienced) is that there is a lot of "meat" in the middle if you produce and maintain some quality applications.

Sure, I have to believe there is some meat in the middle or I wouldn't be in the business. I know from some inside contacts that there are some apps who have pulled in $5m+, you just can't do it with a $.99, and probably not even with an under $9.99 app.

The funny thing is that I started out moonlighting on my first project probably very similar to you as some additional personal income. I would have most likely kept it that way, but I worked as a developer in the mortgage services industry. I saw the writing on the wall and got out of that business at just the right time and escaped the market implosion. The iPhone stuff is what I had going for me so I just ran with it.

Anyway, anyone who is interested can check out our apps at:

InMotion Software
 
I know from some inside contacts that there are some apps who have pulled in $5m+, you just can't do it with a $.99, and probably not even with an under $9.99 app.

$5m?... that doesn't seem likely unless 1) this top 20 list is BS or 2) the numbers we have for these apps are BS.

Given that we know not a single $9.99 app is in the top 20, and outside the top 20 has to be south of 380k units..

380,000 * 9.99 ~= $3.8m.. far under the $5m mark.

Crash Bandicoot is the only possibility. $5.99 price point with sales over 900,000 units (Koi pond reports 900k and is #2).
 
Also, even at 500,000 sales, that number is not impressive at all in the gaming industry. 500,000 sales is a mediocre hit for Wii, DS, or PSP, and those games sell for much higher price.

are you actually reading what is written there? Most of the devs and shops selling apps and making money are individuals and INDIE developers. Please let me know how can you develop an app for the DS and get it distributed and make 300,000 bucks out of it. I am using my personal mac and my iphone for development, how would that work out for a psp or wii? right, didn't think so.

The appstore has been out for some 9 months now and for a very young software platform and you are comparing it to YEARS-old specialized gaming consoles?
 
$5m?... that doesn't seem likely unless 1) this top 20 list is BS or 2) the numbers we have for these apps are BS.

Given that we know not a single $9.99 app is in the top 20, and outside the top 20 has to be south of 380k units..

380,000 * 9.99 ~= $3.8m.. far under the $5m mark.

Crash Bandicoot is the only possibility. $5.99 price point with sales over 900,000 units (Koi pond reports 900k and is #2).

The $5m number is probably BS. It was one of those "through a friend of a friend in the industry" sort of things.

The point I was trying to make is that there is some big money in this thing, it's just not at the unreasonably low pricing that exists today.
 
Anyway, anyone who is interested can check out our apps at:

InMotion Software

I don't have an iPhone (or touch), but I checked out your site anyways. I have to say that PocketDyno looks pretty cool. If I was 24 again, I'd definately go out and buy an iPhone and PocketDyno.

NOTE - I don't work for these guys or anything. Just thought the screenshots looked pretty cool.

ft
 
I have to agree with that. One could make the argument that spending several tens of thousands of dollars on lottery tickets might have as good a chance at success. Also, we've seen the performance curves for apps over time and they're not so great either. What blows me away is that an app that has no practical use is so successful. I can also see that the typical developer would almost have to be somebody hacking in the evenings rather than a formal company with overhead. And from Apple's POV, it's a volume revenue stream. Thousands of apps, hundreds of millions of downloads, and they make a little on each one.

On the other hand though, there were many people in the music industry that said that the iTunes business model would kill the music industry and that hasn't happened yet. IMHO what it encourages is the creation of better content because you can't rely on one good song selling an entire CD of crap. So perhaps the App Store will eventually encourage higher quality stuff built by somebody in their living room.
 
Yea, I hope (and think) that Apple understand the potential here, and put their focus on making the "gaming" experience on the iPhone/Touch as good as possible. It's clear that gaming is "huge" on these devices. :)

One thing I'm hoping for is a "gaming console" solution. Imagine downloading a game on your iPhone… then download the same game again for free (only pay once) on your Apple TV (the Apple TV version of the game can be in HD)… then imagine playing the game on your big flat screen TV while using your iPhone/Touch as a (wireless) controller! :cool:

Yeah ... that would be cool! The app store is a huge success! There are some really useful apps to be found for the iPhone there. My latest was the LogMeIn ignition app. I was surprised at how quick and easy it was to use. The price was a bit high, but worth it, IMO.

Gaming is huge on the iPod/iPhone. Loads of gaming apps for them as well. I hope Apple sees the writing on the wall here and word spreads to the computer department. Though the modern machines perform ok for many games, I wish there were options to upgrade graphics on an iMac or Mini after-market. Maybe one day ... but meanwhile, I'm not quite ready to invest in a Pro. :D
 
On the other hand though, there were many people in the music industry that said that the iTunes business model would kill the music industry and that hasn't happened yet.

True, but anecdotal evidence aside, I think the dollar investment in writing a single song is much less than the investment in making a quality AAA title app/game.

Don't be mistaken about it, Apples primary goal in the app store is in selling more iPhones. An unsubsidized iPhone costs what? $600 or so? Apple probably makes close to %50 margins including the monthly revenue stream from the carriers, call it $300 profit. You would have to buy $1000 worth of apps on iTunes for Apple to make more money off the app store than in selling you the hardware. Consumers like the low app prices, Apple likes the low app prices (makes the iPhone more attractive), developers are left in the cold.

I'm not trying to come off as too cynical here. What these numbers tell me is that unless somethings changes (perhaps micro transactions?) the app stores low prices can only sustain hobbyists and junk apps in the long run, and maybe the occasional indie developer like myself. With these numbers who would invest $250-$500k or more in a game?
 
I just love how iFart Mobile is #16. It even beat Monopoly. There's something wrong with the world, when a fart app beats Monopoly.

Don
 
If someone could "port" Heroes of Might and Magic III they would get filthy rich! :cool:

Convince me that you and your 300,000 next closest friends will buy it and I'll do it!!!

That's the issue, games with that level of depth are unlikely to happen on the iPhone with the price point consumers are currently demanding. You would never earn back the investment in the game by charging less than $10, but how many people would actually buy a $15-$30 game on iTunes?
 
Convince me that you and your 300,000 next closest friends will buy it and I'll do it!!!

That's the issue, games with that level of depth are unlikely to happen on the iPhone with the price point consumers are currently demanding. You would never earn back the investment in the game by charging less than $10, but how many people would actually buy a $15-$30 game on iTunes?

I understand, but then it's a good move by Apple to add a new higher price point, like they promised when they talked about what's coming in 3.0 :)

+ I'm willing to pay more for quality!
 
I understand, but then it's a good move by Apple to add a new higher price point, like they promised when they talked about what's coming in 3.0 :)

+ I'm willing to pay more for quality!

I really hope you're right and it works out in the end. Obviously I have a vested interest in seeing apple do something like that. Still, it's going to be hard changing consumer expectations as there are good games out now on iTunes at a much, much lower price point.

The other issue nobody seems to be talking about is the rampant piracy that currently exists is only going to get worse with the higher price point. With the number of people willing to pirate a $3 game, imagine what will happen with a $20 game. I watched as a single piracy site distributed more copies of our DD game on the first day of it's release then we've sold on iTunes to date and we're not alone.

Apple doesn't seem to be doing anything about it, but then again pirated software does help sell more iPhones...
 
Wirelessly posted (iPhone: Mozilla/5.0 (iPhone; U; CPU iPhone OS 2_2_1 like Mac OS X; en-us) AppleWebKit/525.18.1 (KHTML, like Gecko) Version/3.1.1 Mobile/5H11 Safari/525.20)

Man I wish that I was on the receiving end on the money for some of those apps. Props to the developers that created them.
 
Yea, I hope (and think) that Apple understand the potential here, and put their focus on making the "gaming" experience on the iPhone/Touch as good as possible. It's clear that gaming is "huge" on these devices. :)

One thing I'm hoping for is a "gaming console" solution. Imagine downloading a game on your iPhone… then download the same game again for free (only pay once) on your Apple TV (the Apple TV version of the game can be in HD)… then imagine playing the game on your big flat screen TV while using your iPhone/Touch as a (wireless) controller! :cool:

This is what I've been saying for a while, and many others I'm sure! :D

Imagine what Apple could do if they update the Apple TV with an SDK and the App Store!!! :eek: I think they would have a real chance at finally creating and dominating the future entertainment center!

I HOPE I HOPE I HOPE SOOOOOON! This is seriously such a no brainer it isn't even funny!
 
It's only a matter of time:

Adboe CS6 sold in app store for Snow Leopard, MS Office sold in app store, etc. etc.
 
This is what I've been saying for a while, and many others I'm sure! :D

Imagine what Apple could do if they update the Apple TV with an SDK and the App Store!!! :eek: I think they would have a real chance at finally creating and dominating the future entertainment center!

I HOPE I HOPE I HOPE SOOOOOON! This is seriously such a no brainer it isn't even funny!

I know, it's really a no brainer! If Apple doesn't see the potential here then … hmm… how can I express this? Oh, I know: !?:eek::confused::eek:?!
;):)
 
I felt like posting a comment here in regards to bghoward's words of caution to others interested in the iphone market. The short version is - I agree that the market is currently very volatile and I wouldn't recommend anyone quit their day job to do it full time just yet, much less invest the kind of cash you would on a DS game for example. That said, I think that its a good way (often the ONLY way) for small teams or individuals to get their product out there, and for people without the capital or clout to develop for DS, Xbox Live Arcade, or PSP, its a great opporunity. But hoping to make the next inexplicable success like ifart, or making a clone of an existing hit is no better than buying a lottery ticket. Here's a little background on me:

I developed Zombieville USA, which has been in the top 10 on the US app store for the last month. Our total sales are nearing a quarter million downloads (most of which at $2) although we've done a couple $1 sales when we've released updates to the game.

The budget for Zombieville was pretty much zero dollars - not unlike iShoot, it was pieced together in my spare time over the course of a little over a month.

It's easy to look at my story (and the handful of others like it) and think the iphone is a goldmine, but the fact of the matter is that I got lucky. Is my game good? Sure, people seem to like it, but there are no effective means to market an iphone app right now - visibility in the app store itself is the only certain way to get people to know your app exists. So even a great game won't necessarily find an audience, or at least one large enough to make up for 75k in development costs. We were lucky enough to get featured by Apple on the 'new and noteworthy' section, which made our sales go from a few hundred a day to a few thousand.

And would my story be a success if I had a team to pay salaries too? An office to lease? I read an article on gamasutra recently (around GDC time) that gave some sales averages for iphone games, and they claimed only 3% of iPhone apps ever crack 10,000 downloads. It's really a very different beast than any other platform out there, and it highly discourages long development cycles, large teams, and big budgets - hence the flood of cheap cash-ins that clutter the store. Unless you're an established developer (like gameloft, EA, namco, konami etc) you won't be gauranteed that coveted "shelf space" on the store front, which is the only for-sure way to get seen.

Just my 2 cents.
 
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