I built apps for android, iOS, windows incarnations, and even bb10. In aggregate maybe 25-30 branded apps on the iOS store could make 10k per month. The rest were garbage.
The most I ever made was 1m over a year on 7 BREW apps we made. That's right, those old dead handsets had only 20-30 apps in their store and we owned about 20% of the market.
What made that possible is that the ecosystem was so bad and it was so hard and expensive to get apps reviewed and built for multiple handsets, you could make money as long as you just got on the device.
The relative ease of launching has made a plethora of nice but unprofitable apps on the other ecosystems... And it points to what happens in any work economy when the barrier to entry becomes hobbiest-level easy. Happened to photography, writing/publishing, and others. There are too many people relatively skilled enough to do an average job and give it away for free for anyone but the best marketed and connected to make money.
"Once a game of piece of software leaves the very top of the sellers, the income fall-off is severe. Our poorest selling DLC for PC games generates more income than nearly every iOS or Android developer app we've gotten numbers for."
> The relative ease of launching has made a plethora of nice but unprofitable apps on the other ecosystems... And it points to what happens in any work economy when the barrier to entry becomes hobbiest-level easy. Happened to photography, writing/publishing, and others. There are too many people relatively skilled enough to do an average job and give it away for free for anyone but the best marketed and connected to make money.
Quoted for truth and that it bears repeating. When anyone can do it, anyone will. And if `$your` specialty becomes that easy, it won't be in high demand. This is something that we must be on our guard against, as professionals, and to continually self-improve our way such that it keeps a competitive moat between us and the hobbyist.
The "labor supply" side isn't the only factor in downward pressure on the value of apps--it's also the quality of the demand side. People tend to the cheap side when it comes to paying for apps. The result is that each marginal increment of "value" in an app comes with a geometric increase in cost to produce it. It's also a feedback loop: people aren't willing to pay (very much) even for good apps because there are a sufficient number of developers doing it "just good enough" and giving it away for free, and so developers who could make an even better app shy away from doing so since the prospective benefit doesn't merit the risk.
Is it worth it to be an App developer? How about versus working at Google or Apple?
From their perspective, the purpose of your work is to enrich their platform. The difference is in the distribution of payout and work conditions. Rather than having a stable 100k salary at said company, you have the chance to earn absolutely nothing, or be an outlier and beat the 100k. Is it worth it, by expected value? Well, according to the article numbers,
Expected Monthy Payout = 24%0 + 23%50 (using half of max of ranges) + 22%500 + 19%5000 + 9%50K + 3%200K (using double the greatest lower limit)
Which gives an expected monthly payout of $11,600. Not bad! I think 30% of this goes to the respective platforms, so an expected yearly salary for an app developer might be something like $97,500. And I believe this matches up fairly well with what companies are willing to pay app developers (on average it seems higher, aside from maybe in the Valley).
What's interesting is the distribution of payoffs into the "haves" and "have nots". There are few app developers pulling that $100K or so salary. Instead, two thirds of everyone is below poverty, and a select group are killing it. This seems to be the new modus operandus of the tech economy. The implication is obvious: extreme economic inequality (especially as non-tech jobs become less relevant), which by necessity will increase social inequality.
I think you are underestimating what the really big guys are pulling in. I doubt twice is high enough for the tail end, three or four times is likely better.
> There are few app developers pulling that $100K or so salary.
The article and report (which admittedly are not very clear) says there are very few app developers pulling in over $100k per app. Someone with an app making $250k a year and two more apps making $10k a year each would not be in the $100k-per-app bin as this report lays out the data,
Doesn't this title conflate "app businesses" with "developers"?
I'd also expect that the majority of app companies aren't sustainable. But from the people I've talked to, it seems like a lot of apps are being done as something between a hobby an a side business.
A lot of the people you see selling art and jewelry at fairs work like that. They don't expect it to be their full-time job; it's a fun way to make a little extra cash. So what looks like a non-living wage can be perfectly sustainable as long as you're doing it to supplement other income.
I find this completely unsurprising. Maybe because I'm someone who used to (kinda sorta) make a living as a writer?
Writing software is more profitable than writing prose (or poetry), because fewer people can do it, but at the end of the day the economics are the same: the fruits of your labor are easily copied, so making something that 10 million people read or use is not inherently much more expensive than making something 100 people read or use. Under those circumstances, it's easy for everyone to read the best content, and use only the best apps. People's differing tastes, need for variety, and imperfect awareness of their choices means the authors of the "second best" thing aren't completely screwed in either case, but it's still pretty close to winner-take-all.
(Also, social proof—people's tendency to use what other people are doing as a proxy for quality—amplifies winner-take-all tendencies, even when there are no obvious network effects.)
I feel like to a large extent this is just techcrunch being techcrunch and writing link-bait articles.
My thoughts on this:
1) Just about everyone is "interested in making money" from their apps. I'm not sure how they're filtering the developers in the survey, but I'm willing to bet the amount of effort put in, and the actual methods used to "make money" differ wildly among those developers. Apples to oranges.
2) 5-10k per app per month for a single developer with a full-time job doing this in his spare time is pretty good. For a 300 employees company, not so much. Similarly, millions a month will sustain a large company and make an individual developer extremely wealthy. What are we comparing?
3) I'll go out on a limb here and say that games make more than any other category on the app store. They also tend to require a higher budget and production value: better graphics, sounds, a storyline, etc... Maybe the 100 flashlight / todolist apps competing for the same spots don't make much money but they also cost nothing besides a weekend of work and the $99 / year ADC membership. I also wouldn't be surprised if most of that "1.6%" were game developers. Lumping every app together and trying to get stats out of it doesn't tell us anything about how much the developers are spending to get those apps out.
4) Obligatory plug: Storm8, the company I work for, is recruiting. We're a mobile games developer (on the App Store we tend to be better known as TeamLava) and have been profitable and fully bootstrapped for over 5 years now through rapid growth. We're all very passionate about creating new games and refining our existing ones and have a lot of interesting projects to work on. We're looking for developers interested in learning more about the mobile games industry, no experience required. Email is in my profile if interested :)
Thats not a fair argument.
It appears soundtrack has less than 1K downloads where Game has around Million downloads (Approximation based on number of ratings).
So it appears to me Soundtrack generated 10K where as Game Generated 3M.
On Windows Phone / Windows 8 this problem is even bigger. No matter how much effort you put in to build the best app in its genre, earning even $100 per month is extremely hard. I know a lot of Windows developers who are serious about building apps for those platforms, and none of them makes $100 per month or more from those apps.
Have you more on this - I assumed winphone would be so limp in the market that no one would develop for it, leading to the big wins for the few that bothered.
I am assuming I have been proven wrong by the market. But would like to know
>As Apps Disappear, Will They Be Seen As Disposable?
Haven't they always been? They're mostly games and toys. The number of actual tools I have installed is really really low, I have a half dozen additional apps because they're currently fashionable for communication. Everything else on the store is either serving a need I don't have, or ephemeral nonsense.
I'd even lump things like pandora in with the ephmeral as disposable. I got a new smartphone a few months ago and haven't even thought of installing it until writing this post. So even if the company pandora will be around for decades, I've reached the point of diminishing returns from installing apps before I get to them.
App stores are just download managers now.
Still a huge win - remember how hard it was to get your software into a users hands, free or not, 10 years ago?
"Game design is a highly creative art that takes a lot of practice. Angry
Birds was creator Rovio’s 52nd title. It is therefore not surprising to
find that those who have shipped a lot of game titles are the most
successful. The 3% of mobile game developers who have shipped
50+ titles are nearly 9 times as likely to be earning over $50k per app
per month than the 62% who have only shipped between 1 and 3
titles."
I was quite surprised that is was the 52nd game! Wow. That is a lot of persistence!
They started on mobile games way before iOS or app stores though. And millionaire family for funding. And they did AB as a side project while doing many other games for pay for other publishers. And AB didn't get a anywhere in the asp store at first, picked up months later due to marketing tricks & luck & relatively early days of iOS games.
They analyze the data on a per app basis, which may not be the best way to do it. Let's take the Facebook developers on Android. The Android Facebook app has been downloaded over 500 million times. Facebook's Android Slingshot app has been downloaded less than half a million times. With the way Visionmobile/Techcrunch break down the data, on an average per app basis, the existence of the Slingshot app drags the achievements of the flagship Facebook app way down - it halves it, basically. This doesn't really bear any relation to how much success Facebook has had though.
HN often contemplates the power law, so it's natural a developer might have one app which is very successful (Rovio released 51 apps before releasing Angry Birds), then another app which is half as successful, then a third app half as successful as the second app, and so forth. This analysis doesn't think in those terms though, they are more of the idea that every app released by a company will be more or less as successful as the other ones it releases.
Also the report sets the bar fairly high. It calls people who make $9000 per app per month "strugglers". I'd be happy with one app making $9000 a month, and wouldn't be struggling making the resulting six-figure salary. Even if I had two or three apps making $9000 a month each I'd be considered a struggler. This isn't really struggling. Maybe for a firm with venture capital that was expected to grow quickly it would be considered a failure, but not for a bootstrapped developer, or partnership of developers.
An App is often just a tool, and tools aren't a sustainable business on their own.
Ideally you have a profitable business, and the app is just one way for the customer to access your business. Then the app doesn't need to be sustainable in itself.
The app store that came with iOS6 totally destroyed the income of developers on iOS. Many developers pointed out the problems, many left the platform. With iOS7 apple plainly ignored the problem. With iOS8 some changes are coming which might help.
Apple did it. They had better undo it if they don't want their iOS devices to be nothing but ad display machines or in app purchase tricks.
"However, states the report, only the top 1.6% of developers make more than $500,000 per app per month, but of those who do, some are earning tens of millions per month. The next 2% – those who make between $100,000 and $500,000 per month."
I think these percentages are not low at all. In fact, they're almost pretty good. This is how success is distributed in almost any profession.
Releasing apps seems increasingly pointless. Unless you get featured, there is pretty much no visibility and almost 0% chance of discovery. At least with web based apps your ranking can improve overtime for a variety of keywords and traffic can begin to find you. I have not had a similar experience with development for the app store.
These numbers are actually quite rosy in my opinion. When I built PaperBox (www.gopaperbox.com), our chief competitor was getting about 50K downloads per day - this compared to maybe 50 a day for us back then. We knew we had a better offering - but we also knew that charging right off the bat would shoot us in the foot. Instead, we've opted to go the free route to build our user base & brand, and figure out the business model later on.
I cannot imagine an app charging and being successful right off the bat unless they have a platform for advertisement (something like Vesper and Daringfireball.com) or it's made by a very prominent figure/company. The reality is there are 10 apps for every idea in the app store (in 2014) and the best app likely won't win market share if they charge from the start.
What about Paper? Not only did they charge from the start, they charged a rather high price, and entered a market full of existing competitors, some free.
Half (50%) of iOS developers and
even more (64%) Android developers
are operating below the “app poverty line”
of $500 per app per month.
Maybe it's because there are so many clones and one-off experiments on these stores. For example, how many versions of Piano Tiles / Don't Tap the White Tile are there??? I can't even tell which one is the original at this point.
Also, some people will just write an app as a hobby, or to pad their resume. At least for the App Store, if you make $9 per month, you've already paid off your yearly subscription fee of $99, and can safely leave your apps up forever, even if they are below the "app poverty line."
I would be interested to see what percentage of developers who are actually trying to make a living from their apps are succeeding or failing.
> Accounting for 47% of app developers, the “have nothings” include the 24% of app developers – who are interested in making money, it should be noted - who make nothing at all.
This kinda implies they're filtering out people releasing apps just for fun, but I'm not sure how "interested" you have to be to qualify as an "interested in making money" developer.
A majority of today's small businesses are not sustainable either. Isn't it something in the range of 85% of small businesses fail after a handful of years?
That was an interesting thought. I had to look at the numbers a bit. In Sweden in 2012 69,216 companies where created [1]. In all of 2012 7,471 companies were declared bankrupt [2], about 10%. If 85% fail, then another 75% should have shut down voluntarily. That is out of 1.1 million companies of which 888,000 had some turnover last year [3], Can't find the statistics for the year on year growth though right now.
Edit: found the stats. Seems the number of companies have only grown by 10% in total or so in six years [4]. So maybe you are right then.
Not all small businesses are intended to be sustainable. Let's say I start a company in order to bill my freelance clients, but 2 years later I get a job and shut down the company (which never had recurring revenue as I was just selling my own services). That would show up in those figures.
So would a company which was set up to operate, say, a restaurant. If the company sold the assets (lease, fixtures & fittings etc.) to another individual or company, so that the owner could move to another country or start and run a different business, that would also look like a small business failure, even if the guy lived well for those years and came out on top before moving on.
The ones making a living are actually the consulting firms selling trainings, mobile developer certifications and doing apps alongside enterprise deployments of the main application,
In gold rush times, the ones selling shovels get the real money.
[+] [-] tsunamifury|11 years ago|reply
The most I ever made was 1m over a year on 7 BREW apps we made. That's right, those old dead handsets had only 20-30 apps in their store and we owned about 20% of the market.
What made that possible is that the ecosystem was so bad and it was so hard and expensive to get apps reviewed and built for multiple handsets, you could make money as long as you just got on the device.
The relative ease of launching has made a plethora of nice but unprofitable apps on the other ecosystems... And it points to what happens in any work economy when the barrier to entry becomes hobbiest-level easy. Happened to photography, writing/publishing, and others. There are too many people relatively skilled enough to do an average job and give it away for free for anyone but the best marketed and connected to make money.
[+] [-] x0x0|11 years ago|reply
- hobbyist apps getting better
- vc funded businesses willing to lose piles of money for a shot at winning the app lottery introducing apps/services far below cost
- deliberate deception on the part of app store owners about true prices of apps leading to very heavy use of iap and deceptive business practices
[+] [-] walterbell|11 years ago|reply
"Once a game of piece of software leaves the very top of the sellers, the income fall-off is severe. Our poorest selling DLC for PC games generates more income than nearly every iOS or Android developer app we've gotten numbers for."
[+] [-] pnathan|11 years ago|reply
Quoted for truth and that it bears repeating. When anyone can do it, anyone will. And if `$your` specialty becomes that easy, it won't be in high demand. This is something that we must be on our guard against, as professionals, and to continually self-improve our way such that it keeps a competitive moat between us and the hobbyist.
[+] [-] Iftheshoefits|11 years ago|reply
[+] [-] dredmorbius|11 years ago|reply
[+] [-] zxcvvcxz|11 years ago|reply
From their perspective, the purpose of your work is to enrich their platform. The difference is in the distribution of payout and work conditions. Rather than having a stable 100k salary at said company, you have the chance to earn absolutely nothing, or be an outlier and beat the 100k. Is it worth it, by expected value? Well, according to the article numbers,
Expected Monthy Payout = 24%0 + 23%50 (using half of max of ranges) + 22%500 + 19%5000 + 9%50K + 3%200K (using double the greatest lower limit)
Which gives an expected monthly payout of $11,600. Not bad! I think 30% of this goes to the respective platforms, so an expected yearly salary for an app developer might be something like $97,500. And I believe this matches up fairly well with what companies are willing to pay app developers (on average it seems higher, aside from maybe in the Valley).
What's interesting is the distribution of payoffs into the "haves" and "have nots". There are few app developers pulling that $100K or so salary. Instead, two thirds of everyone is below poverty, and a select group are killing it. This seems to be the new modus operandus of the tech economy. The implication is obvious: extreme economic inequality (especially as non-tech jobs become less relevant), which by necessity will increase social inequality.
[+] [-] tomjen3|11 years ago|reply
[+] [-] Ologn|11 years ago|reply
The article and report (which admittedly are not very clear) says there are very few app developers pulling in over $100k per app. Someone with an app making $250k a year and two more apps making $10k a year each would not be in the $100k-per-app bin as this report lays out the data,
[+] [-] wpietri|11 years ago|reply
I'd also expect that the majority of app companies aren't sustainable. But from the people I've talked to, it seems like a lot of apps are being done as something between a hobby an a side business.
A lot of the people you see selling art and jewelry at fairs work like that. They don't expect it to be their full-time job; it's a fun way to make a little extra cash. So what looks like a non-living wage can be perfectly sustainable as long as you're doing it to supplement other income.
[+] [-] chrishallquist|11 years ago|reply
Writing software is more profitable than writing prose (or poetry), because fewer people can do it, but at the end of the day the economics are the same: the fruits of your labor are easily copied, so making something that 10 million people read or use is not inherently much more expensive than making something 100 people read or use. Under those circumstances, it's easy for everyone to read the best content, and use only the best apps. People's differing tastes, need for variety, and imperfect awareness of their choices means the authors of the "second best" thing aren't completely screwed in either case, but it's still pretty close to winner-take-all.
(Also, social proof—people's tendency to use what other people are doing as a proxy for quality—amplifies winner-take-all tendencies, even when there are no obvious network effects.)
[+] [-] abk|11 years ago|reply
My thoughts on this:
1) Just about everyone is "interested in making money" from their apps. I'm not sure how they're filtering the developers in the survey, but I'm willing to bet the amount of effort put in, and the actual methods used to "make money" differ wildly among those developers. Apples to oranges.
2) 5-10k per app per month for a single developer with a full-time job doing this in his spare time is pretty good. For a 300 employees company, not so much. Similarly, millions a month will sustain a large company and make an individual developer extremely wealthy. What are we comparing?
3) I'll go out on a limb here and say that games make more than any other category on the app store. They also tend to require a higher budget and production value: better graphics, sounds, a storyline, etc... Maybe the 100 flashlight / todolist apps competing for the same spots don't make much money but they also cost nothing besides a weekend of work and the $99 / year ADC membership. I also wouldn't be surprised if most of that "1.6%" were game developers. Lumping every app together and trying to get stats out of it doesn't tell us anything about how much the developers are spending to get those apps out.
4) Obligatory plug: Storm8, the company I work for, is recruiting. We're a mobile games developer (on the App Store we tend to be better known as TeamLava) and have been profitable and fully bootstrapped for over 5 years now through rapid growth. We're all very passionate about creating new games and refining our existing ones and have a lot of interesting projects to work on. We're looking for developers interested in learning more about the mobile games industry, no experience required. Email is in my profile if interested :)
[+] [-] thegeomaster|11 years ago|reply
[+] [-] patmcguire|11 years ago|reply
"Monument Valley costs $6 less than it's own soundtrack. That’s how dysfunctional app pricing is."
https://twitter.com/gregmaletic/status/493430279122350080
It really can't continue like this. What comes after, who knows.
[+] [-] kumarm|11 years ago|reply
So it appears to me Soundtrack generated 10K where as Game Generated 3M.
[+] [-] watwut|11 years ago|reply
[+] [-] Avalaxy|11 years ago|reply
[+] [-] lifeisstillgood|11 years ago|reply
I am assuming I have been proven wrong by the market. But would like to know
[+] [-] forgottenpass|11 years ago|reply
Haven't they always been? They're mostly games and toys. The number of actual tools I have installed is really really low, I have a half dozen additional apps because they're currently fashionable for communication. Everything else on the store is either serving a need I don't have, or ephemeral nonsense.
I'd even lump things like pandora in with the ephmeral as disposable. I got a new smartphone a few months ago and haven't even thought of installing it until writing this post. So even if the company pandora will be around for decades, I've reached the point of diminishing returns from installing apps before I get to them.
[+] [-] dredericktatum|11 years ago|reply
[+] [-] gregpilling|11 years ago|reply
"Game design is a highly creative art that takes a lot of practice. Angry Birds was creator Rovio’s 52nd title. It is therefore not surprising to find that those who have shipped a lot of game titles are the most successful. The 3% of mobile game developers who have shipped 50+ titles are nearly 9 times as likely to be earning over $50k per app per month than the 62% who have only shipped between 1 and 3 titles."
I was quite surprised that is was the 52nd game! Wow. That is a lot of persistence!
[+] [-] philiphodgen|11 years ago|reply
Fifty attempts to hit the nail with a hammer is likely to improve your aim.
In addition, anyone willing to try 50 times is likely to be a survivor. Those unwilling to persist will go try their luck elsewhere.
It is oddly inspiring to see the "try 50 times" story and the payoff for the doggedly persistent developer.
[+] [-] fulafel|11 years ago|reply
[+] [-] chasing|11 years ago|reply
That sounds like great odds to me! Especially given the amount of garbage in the App Store.
[+] [-] x0x0|11 years ago|reply
[+] [-] hayksaakian|11 years ago|reply
[+] [-] Bamafan|11 years ago|reply
[+] [-] Ologn|11 years ago|reply
HN often contemplates the power law, so it's natural a developer might have one app which is very successful (Rovio released 51 apps before releasing Angry Birds), then another app which is half as successful, then a third app half as successful as the second app, and so forth. This analysis doesn't think in those terms though, they are more of the idea that every app released by a company will be more or less as successful as the other ones it releases.
Also the report sets the bar fairly high. It calls people who make $9000 per app per month "strugglers". I'd be happy with one app making $9000 a month, and wouldn't be struggling making the resulting six-figure salary. Even if I had two or three apps making $9000 a month each I'd be considered a struggler. This isn't really struggling. Maybe for a firm with venture capital that was expected to grow quickly it would be considered a failure, but not for a bootstrapped developer, or partnership of developers.
[+] [-] perlgeek|11 years ago|reply
Ideally you have a profitable business, and the app is just one way for the customer to access your business. Then the app doesn't need to be sustainable in itself.
[+] [-] onmydesk|11 years ago|reply
Apple did it. They had better undo it if they don't want their iOS devices to be nothing but ad display machines or in app purchase tricks.
[+] [-] archagon|11 years ago|reply
[+] [-] r_singh|11 years ago|reply
I think these percentages are not low at all. In fact, they're almost pretty good. This is how success is distributed in almost any profession.
[+] [-] chrishallquist|11 years ago|reply
No—only in professions where the marginal cost of serving an additional customer is low.
[+] [-] rahimnathwani|11 years ago|reply
[+] [-] Donzo|11 years ago|reply
[+] [-] danbucholtz|11 years ago|reply
I cannot imagine an app charging and being successful right off the bat unless they have a platform for advertisement (something like Vesper and Daringfireball.com) or it's made by a very prominent figure/company. The reality is there are 10 apps for every idea in the app store (in 2014) and the best app likely won't win market share if they charge from the start.
[+] [-] thrownaway2424|11 years ago|reply
[+] [-] ronyeh|11 years ago|reply
Also, some people will just write an app as a hobby, or to pad their resume. At least for the App Store, if you make $9 per month, you've already paid off your yearly subscription fee of $99, and can safely leave your apps up forever, even if they are below the "app poverty line."
I would be interested to see what percentage of developers who are actually trying to make a living from their apps are succeeding or failing.
[+] [-] forgotpasswd3x|11 years ago|reply
This kinda implies they're filtering out people releasing apps just for fun, but I'm not sure how "interested" you have to be to qualify as an "interested in making money" developer.
[+] [-] mmanfrin|11 years ago|reply
[+] [-] bjelkeman-again|11 years ago|reply
Edit: found the stats. Seems the number of companies have only grown by 10% in total or so in six years [4]. So maybe you are right then.
(all references in Swedish, sorry)
[1] http://www.tillvaxtanalys.se/sv/publikationer/statistikserie...
[2] http://www.tillvaxtanalys.se/sv/publikationer/statistikserie...
[3] http://scb.se/sv_/Vara-tjanster/Foretag--och-myndighetsregis...
[4] http://www.statistikdatabasen.scb.se/pxweb/sv/ssd/START__NV_...
[+] [-] rahimnathwani|11 years ago|reply
So would a company which was set up to operate, say, a restaurant. If the company sold the assets (lease, fixtures & fittings etc.) to another individual or company, so that the owner could move to another country or start and run a different business, that would also look like a small business failure, even if the guy lived well for those years and came out on top before moving on.
[+] [-] pjmlp|11 years ago|reply
In gold rush times, the ones selling shovels get the real money.