iPhone Game Rebates

On February 16, 2010

I’m fond of folks who take what is, for more people, a complaint and turn it into an opportunity:

It’s common to complain that apps outside of the Top Charts are invisible. There’s substance to this complaint. What’s been interesting is seeing how people turn that into an opportunity.

Turning this into an opportunity is essentially about creating visibility for apps.

We’ve previously covered offerings like Chomp Apps and AppCircle that look beyond the top lists and suggest apps to users based on Amazon-like matching algorithms. These offerings create visibility for apps outside the top-lists.

There’s another opportunity: spending money to push apps into the top lists and using the visibility of being on those lists to recoup the costs.

Last week I spoke with Jon Lam, CEO of the game shop Ph03nix New Media, about iPhone Game Rebates. iPhone Game Rebates, as the name indicates, returns the full purchase price of to a users after they buy a featured game. iPhone Game Rebates feature one rebate at a time for a two week stretch.

According to Lam and others, the App Store top lists are calculated on a rolling three day basis. He says that ~1800 installs/day puts you into the top sellers store-wide. Rebates encourage downloads with a cost of Apple’s 30% take. Some overly simple math: a $0.99 app after rebate costs the publisher $0.30. $0.30 * 1800 = $540/day spend. $540/day * 14 days = $7560.

Lam created the program to promote their own games but is opening the program to others. He doesn’t plan to charge any fees above his postage costs. What’s in it for him? By building a list of iPhone consumers that will respond to rebate offers he’ll be able to drive his own apps up the charts.

To build buzz about the program, they’re currently offering a rebate on any app purchase. I’ve long wanted the $20 OmniFocus App, so I bought it to test out the rebate process. To receive the rebate you join their list and, after you’ve confirmed, email them the iTunes receipt. Update: since posting this they’ve set a $1 maximum on games only.

iPhone Game Rebates isn’t the only example of buying yourt way into the top sellers list. A month or so ago James Bossert sent me a note about buying his way into the top-25 by purchasing AdMob ads. According to James they were able to recoup their ad spend to get into the top 25 by the increased volume that being in the top 25 generated.

This is all very interesting. This is a natural, Darwinistic reaction to the constraints of the ecosystem. Will be fascinating to see where this goes.

0 responses to “iPhone Game Rebates”

  1. Prasad says:

    Interesting, wonder if this works with the expensive apps like Navigon or TomTom. Dan, did you get the rebate for OmniFocus?

  2. Dan Grigsby says:

    Prasad: Not yet, but I only submitted it today.

  3. Michael Kaye says:

    Ok I don’t get it…how are they making money on these deals. Especially with Any App Sale on. What am I missing?

  4. Ken Pespisa says:

    Ok, I took a gamble and bought Navigon, and submitted the receipt. I just hope this isn’t some social experiment on the gullibility of iPhone users. But worst case at least I got a pretty amazing navigation app 🙂

  5. Craig says:

    You guys should have read the fine print…the maximum rebate is $1.

  6. Dan Grigsby says:

    Craig: Have a look at the screenshot — they changed the text to say that the maximum rebate was $1 *after* we posted this.

  7. Jon Lam says:

    Disclosure: I’m running iPhonegamerebates!

    Michael: Short answer, we’re not! We just want to build the community up a bit before turning it all businessy 🙂 Once we have a decent following, we’ll start charging developers to market their games on our site & app.

  8. Craig says:

    Dan, you should update the article then.

  9. Jon Lam says:

    Craig, Dan, and Ken: We’re literally the world’s dumbest business people 🙂

    Yes, the rebate was always supposed to be $1 and for games only. When we did the site redesign, somehow that got changed to any app, and any amount!

    We will definitely honor anything submitted while the mistake was up! Dan – you should have gotten your Omnifocus rebate just now. Ken, we’ll be rebating you the full cost of the GPS app too.

    Our mistake!! And yes, we changed the site after we read the post. Ken’s receipt almost gave me a heart attack 🙂

  10. Dan Grigsby says:

    Craig: I did. And I’ll thank you not to tell me what to do.

    Also: I just rec’d the rebate payment.

  11. Ken Pespisa says:

    Jon – ok so where does that leave those of us who spent more than $1?

  12. Ken Pespisa says:

    LOL, Jon I just saw your note – sorry to blow up your whole system! Tell you what – just send me half. I didn’t mean to be so greedy 🙂

  13. Craig says:

    Thanks Dan. And don’t publish a public blog if you’re not open to constructive suggestions.

  14. Craig says:

    And Jon, that’s a classy followup….nicely handled.

  15. Prasad says:

    Well, thought it was too good to be true. Almost pushed the button to buy Navigon and held off at the last minute. Anyway, good for you Ken and Dan.

  16. Michael Kaye says:

    Well I obviously wasn’t missing anything….I was spot on that it was wrong.

  17. Kenny says:

    Hm. If I provide the initial investment money to fund the rebates I might be able to make it into the Top 25, which is awesome. However, once I stop paying for rebates and begin recouping money, won’t the rebate program just be working with some other app developer who will quickly bump me out of the Top 25? It’s very likely that I won’t recoup my investment or make a profit. :/