Research On A "New Middle Class" Of Indie iPhone Game Developers

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On August 13, 2009
iPhone OpenGL Programming Workshop: Sept 26-27, Denver.
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In September, at the 360iDev Conference, I’m giving a talk titled Warm, Clothed and Fed: Developer Run iPhone Businesses.

A big part of the talk will be about where your money comes from in an iPhone business. You can categorize iPhone businesses into three segments based on revenue sources:

You can make money from (1) people purchasing your apps, (2) companies purchasing your time to create apps, or (3) developers purchasing your goodies to make making or selling apps easier.

Peter Farago, of the mobile analytics firm Flurry, has released some data for the game segment of the people pay for your apps category of iPhone businesses in a post titled Rise of the New Middle Class: Indie iPhone App Developers.

The piece’s central investigation is whether or not established game companies dominate the store. There are two prongs to its thrust:

First, the article compares the composition of the top-25 games on the App Store as compared to the top-25 games in AT&T’s broader market “Media Mall.” The latter was dominated by EA, accounting for a 36% share of the pie; 9 other companies made up the remainder. The former was more fragmented, with Gameloft commanding the largest share at 12% and 22 other publishers evenly splitting the remainder; notably absent: EA.

Second, the article examines the headway indie developers have made, over time, entering the top-25. Since September of last year, indie developers have had as many as 16 of the top-25 and have never had fewer than 11 of the spots. Peter’s post offerers evidence contrary to the common belief that indies are being squeezed from the App Store.

Peter’s article effectively makes the case that indies can be successful. However, there’s a bit of a Hollywood element to this kind of research. Just as every actor dreams of being a name, every game dev dreams of creating the next big game.

Is there an iPhone version of the not-a-star working actor? My as yet unsubstantiated hunch is that, in the game segment, the downward price pressure and typically long development cycles make this tough.

I’ll be fleshing out the data to test this hypothesis for my talk, but for the moment let’s assume it’s true. If it is, this either reducing game dev time or looking to other/non-game categories that can support a larger ticket. There’s a lot to say on both of those topics; I’ll follow up in future posts and in my talk at 360iDev.

0 responses to “Research On A "New Middle Class" Of Indie iPhone Game Developers”

  1. Back in December you ran the numbers and it appeared that downward price pressure was a fallacy. People were buying as many apps over $0.99 as under. And higher-priced apps don’t need to sell as many copies to make a profit.

    https://www.mobileorchard.com/99-cent-iphone-apps-not-significantly-more-popular/

    I am interested to know if this is still the case, especially for apps not in the top 25. This would make the not-a-star working actor lifestyle possible.

  2. Dan Grigsby says:

    Geoffrey: my hunch is that in the games category the pressure is to go towards $.99 is real. According to Peter’s post, just prior to collecting this data “Gameloft had simultaneously dropped all of its price points, most of which were $4.99, to $0.99. This aggressive price drop spiked its sales across the board.” Elsewhere it’s different — one example: the Innerfence guys make a living from their $50 credit card terminal application.