Despite getting very close to the best possible case for an iOS game (#1 on app store for a more than 0 days), am I the only one that is pretty dissapointed at how he was compensated? He didn't actually make $700k -- after Apple took theirs, and the gov't took theirs, he was left with ~$150K in his most successful year...
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?
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.)
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.
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.)
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.
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."
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?
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%
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?
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.
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.
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.
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.
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.
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.
> ... 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.
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.
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 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.
[+] [-] hardwaresofton|10 years ago|reply
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?
[+] [-] jonnathanson|10 years ago|reply
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.)
[+] [-] Scirra_Tom|10 years ago|reply
You've left off the biggest deduction, $280,000 to his partner. 3x more than he paid to the government in taxation.
[+] [-] IkmoIkmo|10 years ago|reply
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.
[+] [-] maxerickson|10 years ago|reply
[+] [-] OpenDrapery|10 years ago|reply
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?
[+] [-] blazespin|10 years ago|reply
[+] [-] to3m|10 years ago|reply
[+] [-] kdamken|10 years ago|reply
[+] [-] smaili|10 years ago|reply
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.
[+] [-] giarc|10 years ago|reply
[+] [-] jiiam|10 years ago|reply
"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."
[+] [-] bsamuels|10 years ago|reply
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?
[+] [-] pvg|10 years ago|reply
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.
[+] [-] vacri|10 years ago|reply
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%
[+] [-] nemothekid|10 years ago|reply
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?
[+] [-] nkohari|10 years ago|reply
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.
[+] [-] sosborn|10 years ago|reply
[+] [-] pjbrunet|10 years ago|reply
[+] [-] megablast|10 years ago|reply
And before Apple came along, to get your app published (J2ME days), you had to get a publisher who would take 70 to 80%.
[+] [-] colechristensen|10 years ago|reply
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.
[+] [-] tsunamifury|10 years ago|reply
[+] [-] trcollinson|10 years ago|reply
[+] [-] mdorazio|10 years ago|reply
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.
[+] [-] spoinkaroo|10 years ago|reply
Edit - They made 2.5 billion last year with nearly a billion in profit, so they may reach 10 million a day this year.
[+] [-] animal531|10 years ago|reply
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.
[+] [-] alc90|10 years ago|reply
[+] [-] fsnb|10 years ago|reply
In Poland I would pay 19% linear tax + $50/month for medical and social insurance in first 2 years, $160/month after 2 years. Nothing more.
[+] [-] vacri|10 years ago|reply
[+] [-] chvid|10 years ago|reply
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.
[+] [-] WA|10 years ago|reply
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.
[+] [-] rogerbinns|10 years ago|reply
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.
[+] [-] qzervaas|10 years ago|reply
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.
[+] [-] jkirsteins|10 years ago|reply
It gives you access to its customers. That's not a bad deal for many.
[+] [-] clamprecht|10 years ago|reply
[+] [-] paulpauper|10 years ago|reply
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
[+] [-] misiti3780|10 years ago|reply
[+] [-] misiti3780|10 years ago|reply
[+] [-] JabavuAdams|10 years ago|reply
[+] [-] philliphaydon|10 years ago|reply
[+] [-] malchow|10 years ago|reply
[+] [-] transfire|10 years ago|reply
[+] [-] smhanov|10 years ago|reply
[+] [-] kelukelugames|10 years ago|reply
[+] [-] metaphor|10 years ago|reply
[+] [-] kevindeasis|10 years ago|reply
Like "How to start a startup" by YC