Some Brutally Honest iPhone App Sales Numbers: $32k Spent vs $535 Revenue
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Owen Goss is the developer of Dapple, a cute color matching puzzle game for the iPhone (you may also remember his memory leaks tutorial here on Mobile Orchard). Despite having a slick site, good gameplay videos, and so forth, it hasn’t sold too well. So Owen’s written The Numbers Post (aka Brutal Honesty) where he reveals how it has sold so far and what effect a review on Kotaku had.
It’s a well written post but doesn’t make for good reading if you’re still in the development stages and were hoping to make big money for just releasing an iPhone app without doing your market research. Owen had a development budget of $32,000 for the game but in the first month made $535 in revenue, despite a glowing review from major gaming site Kotaku. As Owen says:
I remain convinced that there is money to be made on the App Store, but I suspect we’ll see fewer and fewer stories about people getting suddenly very rich.
The comments left are as valuable as the main post, however. Todd Bernhard points out that Owen didn’t spend any money on advertising and had no free “Lite” version for people to try, whereas he’s spending $1000 in advertising and his own app has entered the top 100 on the store. Others complain that $4.99 is a bad price point for a “simple” game. It all makes for educational reading..!
Interesting that these articles are appearing now that the other app stores are starting to appear. You know, I know people who develop software for the iPhone and they have done extremely well thank you. It is a little strange that this app cost $32,000 to develop (I know that development budget is NOT the same as actual costs – but hey – if it did cost that much then he should have done the math first before actually embarking on the project) Hmmm. Not entirely convinced that this is brutal honesty or just bad business planning.
Honestly for the price point and the whole structure of the game, I wouldn’t have thought it would’ve done well in the first place. There are a lot of things this app does wrong. First it’s a game, which means it’s hit or miss from the start. Anybody can make game and call it compelling, but it’s the public who has the final judgement. Also, $32k is pretty ridiculous. I know non-developers pay other people to do stuff for them, but thirty-two-thousand-dollars? Couldn’t he have found a struggling talented developer/designer and work out a partnership agreement? $32,000 is a lot of money for a $5 app.
Levi – $32,000 is not an unreasonable budget for a professionally produced casual game. Many of the games we produce involve 2-3 months of time from a developer plus several weeks from a tester, sound designer, illustrator and animator. Add legal, accounting and promotion to that and it quickly adds up. People need to account for all the ‘hard’ and ‘soft’ costs when they do the numbers.
The developer of Dapple included his time in that $32k figure. He didn’t hire an outside programmer.
Levi is right in terms of the game not really being that great for a game. You need to have an *astoundingly awesome* idea for a game, do months of user testing first, and research… before anyone does any coding or in-depth design. That didn’t happen here. It’s important in the games category, where it’s just too full of crap, so you need to do an incredible job to stand out.
Also, you need some good marketing – just some review on Kutaku is not advertising, nor is “AppCraver” or the mountains of other worthless “app review” sites. You *do* need to spend money on it and get the word out. Otherwise, you’re going to drown under all of the shitty little free apps. And, let’s face it, most of them are shitty. If you think otherwise, yeah your app is shitty, too. You just don’t realize it. And that’s even more dangerous.
Take the time and money to polish the app, too. If your 1.0 version is garbage, no matter what you do to improve it later, you’re stuck with the bad reputation. So do it right the first time. Like I mentioned above, take the time to do user testing and really polish things.
And $32,000 is not unreasonable. Most (good) iPhone devs charge $100, $150, or more for development work. And good designers cost money, too… especially the ones who have Mac/iPhone experience; don’t just hire some web guy to do it, and don’t try to do it yourself. And sound design is more money, etc… People who aren’t developers like to say “that’s outrageous!”, but then again, they’re not developers. It’s easy to say that when you’re not doing the work and don’t have the experience.
And for the love of God, don’t hire some guy from Bangalore, and then come crying to me when your 99 cent tip calculator/to-do list/etc. app fails. Because that just shows you don’t have a clue. I was hoping that Apple would remove apps when their devs’ accounts run out this year, because that would clear out all of the crapware after those people give up and don’t renew their accounts. But, sadly, that probably won’t happen.
Well, everything I wanted to say has already been pointed out here in the comments. No wonder I read this blog. What right does a “me too” game have to any success, especially at a higher price point!!!
Looking for market study reports and trends for developing enterprise applications on iPhone. Thanks.
@helvetica
can you tell me a little more about good marketing for a game because i am in the position of the release of my game ahead of me and being all myself i am willing to spend money on promotion but didn’t do it before. So where could i start? Thanks
I worked about 2 months after work and after 2 months my first app has made me more than $13k. Total investment: $1.5k to buy a macbook and other equipment. I don’t include man-hours, since I do it with my spare time. No advertising done.
$32,000 does sound like a daunting investment, but that really adds up to only two months of one developer’s time. If you are a developer yourself who spends two months this is how much it cost you to write your app. It is something to think about when you are pricing your app at .99 cents or even free.
From my reading of forums and my own experiences selling apps on the store I believe that you should expect a particular app to generate about $6,500 per year on average. Which means that you will need at least 8 apps to replace your income. It is something to keep in mind when you are budgeting for artwork and developer time.
btw: you can actually outsource coding at sites like e-lance and rent a coder. I have not done this myself, but someone I know seemed to have some luck getting an app produced for around $4,000. It remains to be seen how successful it is, but it could be worth a shot.
I agree with the majority of the comments here.
$32,000 would be a lot of money, had you actually paid someone to do the programming etc. However, it’s more of an accounting exercise to see how viable the application was from a purely commercial perspective!
Don’t forget about the kudos of actually having an application go from idea to App Store and then having at least some sales!!
Making money on iPhone apps is a good driving force to do the work, but it’s not the only reason that developers spend time and their own money doing this. After all, the majority of apps are free!!
Cheers
Graham
Like it has been said here, most apps are crapware. The ideas are flawed from the outset, just because you can make an app doesnt mean it will or should sell. People are more discerning these days and know good from bad and reluctant to spend a buck for another to-do-list or match the color app.
I agree with @mattjdrake, you can outsource overseas on sites like sourceexperts.com for much cheaper than 32k of time. Even if its not perfect it may get you started on a v1.0 if your idea is solid.
I don’t think $32k is to much for the dev time, if including all other expenses too. I myself released a few apps and had a few developers bid on them. Currently, one of the games I am working on is costing my $8k to develop and another $2k I am budgeting for advertising and other promotion. I am hoping I can re cope my $.
Btw, in case anyone is interested, I used http://www.iphoneappcoder.com to find US based developers. The bids I got were mostly under $12k for one of my games I am launching in the next week. Quality is pretty good in my opinion.
It is a risky buisness, especially if you can’t do the work your self…
We do all the work ourselves and that’s how we keep the cost down. All work is in our spare time, so hopefully we make a little money so we can get more hours doing what we love.
My iPhone app GeoLogTag is available in the App Store for 1 year now.
I posted the sales figures for that period here.
How about free as the cost to develop an app. And how about not just getting an app for iPhone, but also Blackberry, Samsung, Nokia, LG.
Try eyemags.com. Free to create apps and free to download them.
$32,000 for Making an APP???
I don’t see how that’s possible…
$3,200 sounds more realistic.
$4.99 for the game??
I think he will get 3 times more action if the game was sold for $1.99….
The game seems great, with addicting qualities.
It should be selling more than He is showing. Maybe it was cracked?
what other marketing has he done with the game other than iDev|360 & Kotaku?
What good is a great game if no one knows about it?
Having produced about 100 titles so far, I can say that the average educational/reference app (we do not make games so bear this in mind) does not make $6500. If that were true I would be one happy camper. The average app makes about $500 per year, $40 per month. A great app can sell 10 times that. Apple has convinced tens of thousands of programmers that this is a gold mine. It isn’t, and you are better off learning how to replace Toyota brake pedals, because automotive mechanics make far more than programmers now, esp. if they own their own shop. CPA’s are getting $160/hour while contract programming is dropping steadily. Face it there are too many people in the world who love to solve puzzles and programming as a profession has dropped below carpentry, mechanics, accountants, plumbers, electricians, etc. and will soon be below elementary school teacher.
@Julian I = You are completely clueless and have no idea whatsoever when it comes to software development expenses. Go back to flipping burgers kid
@Julian: the cost of making something is typically not referring to physical raw materials. This is especially true for anything digital, such as software applications (yes this even includes games). Any full-time employee with remotely valuable education/skills (such as a software developer, or artist) is going to earn easily earn $30,000/year, or 2x to 5x that with a full-time job. You can get $30k/year just from $10/hr labor if you do enough overtime. But if you quit your day job to make iPhone apps (or anything) full-time, then you are no longer getting the income from your former employer. Even if you do the project completely part-time, always remember that time and skills are very expensive (not just raw materials).