The discussion stems from this blog post by Jeff Atwood titled “Please Don’t Learn to Code.”

Following that, a couple of rebuttals were posted by Sacha Greif (Please Learn to Code) and esmooov (On Atwood’s Please Don’t Learn to Code).

I won’t rehash the statements brought up by each of these, however, I think on some level, they are all implying the same thing.

1. Computers are and will continue to be a central part of humanity’s present and future.
2. Everyone needs to have some level of understanding of how computers work in order to effectively interact with them.

Point #1 is moot. No one will argue it. It is on point #2 above that the debate begins.

Part of the difficulty is that almost everyone making an argument for or against learning to code has tried to introduce an analogy to something we already understand. Proponents for learning to code compare it to basic human skills like reading or writing. Those against compare it more to specialized skills such as plumbing. The problem is that programming computers is different than any of these, so ultimately, arguments break down when using them.

The difficulty in even asking the question is that there are so many levels of abstraction contained within the word “code” that we can’t fully answer it unless we have the same vantage point.

Let me break it down:

• To a computer, everyone is a hack because no one programs using machine code
• Assembly programmers think all high level programming is a hack.
• C programmers think anyone coding for a virtual machine is a hack.
• Java and C# programmers think scripting is a hack.
• Javascript programmers…well, most of what they do is a hack (and yes, I do javascript).

And these are only a few examples. What about those who write  macros in Excel, or apply styles in Word? The point is that at every level, some things are hidden away, and the level of control given to the coder is reduced. Does this make a coder who works in any of these given levels of abstraction less of a coder?

Coming back to everyone learning to code, let me pose this scenario:

My son has a Lego Mindstorms kit and has spent some time using the (albeit awkward) IDE in order to program his robot to do stuff like walk or respond when they see a certain color. To me, this classifies as coding, even though he didn’t type a word of code. He programmed the robot visually. Does he now understand a decision branch and looping structure? Absolutely.

I think this method of visual coding will become more and more popular in the years to come, particularly at a consumer level. We will always try to find ways to make things as easy as possible, which usually means hiding things in the background. 20 years ago, C was considered a high level language, but today, most people would consider it more low level.

So are you only a coder if you understand all of the things in the background? If yes, then at what level? An interpreted language? A compiled language? Assembly? Machine code? I don’t think it’s a correct distinction to say that coding only involves typing words in order to make a computer do something.

So trying to frame the discussion around whether everyone should learn to “code” is difficult because there are many different levels of coding, and each of them has a role to play. I think the better discussion is how can we use the concepts used in coding (at every one of these levels) in order to organize our thoughts, communicate better and solve real world problems.

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Developers are learning that even the greatest and most polished $0.99 apps have difficulty finding success because people just don’t want to pay for them. Almost paradoxically, developers are finding huge success by giving away their apps for free, but then charging for purchases made within the app (which apparently people are shelling out huge sums of money for).

So why is this? I’ve pondered this question on and off for several months now and I think I have a pretty good explanation. Before I get into that, bear with me as I discuss some of the reasons I’ve seen out there, and why I don’t think any of them are valid.

Apps aren’t tangible

Probably one of the most logical reasons surmised as to why people don’t pay for apps is that apps aren’t a physical thing. Once you pay for it, you can’t “hold” it. It’s almost like it doesn’t exist in the real world.

Yet they ARE tangible. You interact with it (sometimes more than you interact with people physically around you). You touch it. You swipe left-swipe right-swipe up-tilt left. Perhaps it is just pixels on a screen. But how does that interaction make it any less “tangible” than a piece of paper, or some Lego? The hardware is tangible, and provides a way to interface with the app, but the hardware is useless without the apps.

Think about it. How many physical objects do you carry around with you EVERYWHERE you go? Your keys? Wallet? How about those 58 apps you have installed on your phone? Ya, you carry those around too.

Buying an app is a risk

There is some merit to this, and in fact, it’s related to the solution I propose at the end of this article. Buying an app IS a risk.

People will spend time reading reviews, poring over screenshots, watching gameplay videos and getting opinions from their friends before buying an app that costs as much as a pack of gum. Sound illogical? Imagine you’re in the checkout line at the store and you spy a candy bar that looks good. Nine times out of ten, you just pick it up and buy it. If you saw someone stand there, Google the candy bar on their iPhone, then go on Twitter to ask their friends’ opinion, then look for pictures of the candy bar, it most likely would become the next internet meme. Yet, when it comes to apps that are priced the same, it’s completely normal.

So, yes, buying an app is a risk, but so is buying anything else for the first time. Yet that doesn’t stop people from doing it with most other goods and services.

You can always pirate it

Really? So people would rather spend their free time trying to find a pirated version of said $0.99 app and do everything else that goes along with that (jailbreak, etc), in order to save the $0.99? I don’t know about you, but my time is worth more than that, and I think most people feel the same way.

Sure, people like to get things for free, but if you make the process of getting that item so easy, so utterly painless, and charge a reasonable amount for it, you might be surprised how many people go with the paid option. We live in a world of convenience. Time IS money. One of the best examples of this is probably iTunes. I mean, can you make it any easier to download music? And even with all of the pirated music available out there, people still pay for it (to the tune of millions of songs a day) because iTunes makes it that easy.

Don’t get me wrong, the App Store also makes getting apps pretty easy. But there’s more to the story so read on.

People don’t want to clutter their phone with apps

This might make sense if it weren’t so completely wrong. I’m pretty sure that most people who own a mobile device know how to delete apps from that device. Digital delete…that magical feature that makes it like the thing you deleted was never there in the first place. No guilt. No strings attached. Sure, you’ve then wasted $0.99, but…really?

Free is the expectation (& people are cheap)

It didn’t take long after the App Store opened for the race to free to begin. Developers realized that you could get thousands of downloads by giving away your app, trying to sell it for even $0.99 was a huge struggle. And it’s true. In fact, I would argue that even if app prices could go as low as $0.02, you would still get far fewer downloads than if it were free.

Free was a great way for developers to get exposure for their apps. The unfortunate side effect was that as more and more apps went free, it became the expectation. The market value. Probably the second biggest reason why people leave negative reviews for an app (besides that the app is just plain bad), is that it costs too much (which in most cases is $0.99). So people would much rather download free apps, it’s clear. However, I don’t think that means that people won’t pay for apps.

Ultimately, it comes down to finding value in something. There are thousands of apps in the App Store, most of which were built by developers you’ve never heard of before, so value can be a rare commodity. Why do you think people are more apt to buy games that look like games they’ve already played? Because they’ve previously found value in something similar

Don’t think people will pay for value? Look at Apple. Why would someone pay full price for something when you can get a similar product for half the price (i.e., iDevice vs. Android)? Because people are willing to pay the extra for the value they perceive in a product. Why do people back projects in Kickstarter when they are nothing more than ideas? Value.

People are tight with their money in general, until you show them something of value. At that point, watch the money fly.

So onto my solution…

How to get people to pay for apps

I believe there IS a way to get people to pay for apps. Unfortunately, it’s not something that’s necessarily easy to implement, but if it’s done, it will change the way people download apps. So here it is…

Let people TRY the app first.

Earth shattering, I know.

No matter how many hours someone spends researching an app/game, in the end, there is a leap of faith taken when they click that Install button. That’s because no screenshot, or review, or even gameplay video can let you experience the game for what it is. It’s like showing me pictures of a Lakers game, then asking me if I’d like to pay for a membership at the YMCA to go play basketball. I can’t know if I want to play it, until you let me play it. One of the reasons why iTunes is so great is because I can listen to half the song before I decide I want to buy it. Why can’t we do something similar for apps?

You may be saying…sure, they have that, it’s called a Free Version. But there is still a barrier there. You have to download the free version to your device, take the time to play it, then delete it if you don’t like it. As small as that barrier may seem, it exists. I’m not saying that a Free Version can’t help your paid version get more sales. I’m just saying, maybe there’s a better way.

What if you went to the App Store, found a game that you thought you might like to buy, but weren’t sure if you should empty the bank to make that purchase (OK, maybe a hint of sarcasm there)? But you are pleasantly surprised to find a “Try” button alongside the “Buy” button? You click on that Try button, and immediately the game opens up (short preloader notwithstanding) and you start playing. Maybe there’s even a button in the trial that allows you to purchase the paid app so you don’t have to go back out to the App Store. No long download. No countless hours spent searching the recesses of the internet trying to see what the game is like. No uninstall afterwards. You just play.

It’s like giving away a no risk, no hassle, free sample of your app. In the same way that you get free samples at the grocery store, or watch a few minutes of a movie for free (a.k.a. trailer), or take a car for a test drive. The problem with pictures and videos and reviews is that you don’t get to USE the app before you pay for it. So here’s the real reason people don’t want to pay for apps: people want to EXPERIENCE something before they invest fully in it.

Based on experience, within the first 60 seconds of playing a game, I know if I’m going to keep playing or quit and never come back. So the player gets to make that determination without wasting any of their time (besides the 60 seconds).

As I mentioned, logistically, this would be difficult to implement (developers would have to be able to build this trial version standalone, at a fraction of the footprint), but I think it can be done, and the result could be to get more people to pay for apps. In fact, I think people are more than happy to pay for apps they’ll use. In essence, this is what the Freemium game model does, in that it lets you try the game, and once you’re invested in the gameplay, then you can pay for things within the game. However, I think my proposed model has fewer “ethical” issues surrounding it than Freemium does.

This certainly works better for some types of apps than others (ie, Angry Birds type game where you could try a couple of levels, vs. an app where the user experience involves the entire app). However, that doesn’t mean that it can’t work. Though I wouldn’t hold my breath for Apple to implement anything like this, as a developer, it’s nice to be able to dream. And get paid.

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If you listen to the numbers being thrown around, it’s seems reasonable to assume that the top grossing app on any given day can make upwards of $100,000 or more. Recently, Draw Something is reported to be making $250,000 a day AFTER Apple’s 30% cut! Considering that’s far beyond what most app developers make in a year, it’s no wonder so many are trying their luck in the App Store.

I’ve taken some time to break down some of the numbers behind the top grossing apps in the App Store, and once again, I’m focusing solely on games. Some things turned out as expected, but there were also several surprises.

Since rankings fluctuate on a moment to moment basis, doing this research one day may give different results than doing it the next day. However, I think the numbers provide a general idea of some of the things going on with the Top Grossing apps in the App Store. Also, as in the previous article, these numbers are taken from the US iPhone Top Grossing apps.

Games in the Top 100 Grossing

It’s pretty clear that games rule the Top Grossing charts in the App Store. Here are the numbers:

Games in the Top 20: 20

Games in the Top 50: 39

Games in the Top 100: 74

148 Apps has a breakdown of the number of apps in the App Store by category. At the time of this writing, approximately 17% of all currently active apps in the App Store are games.

17%!!

Yet, 100% of the top 20 grossing apps are games. Wow. If you doubted that iOS was growing into a serious gaming platform, then you need to take another hard look at these numbers.

Also of note are the number of free games at the top of this chart:

Free Games in the Top 20: 16

Free Games in the Top 50: 31

Free Games in the Top 100: 55

So, if you look at the numbers, roughly 74% of top grossing apps are games, and roughly 74% of those games are free. We’ll look at how those games make money later on in this article.

Publishers in the Top 250 Grossing

So let’s take a closer look at who is publishing the games that get to the Top Grossing 250. Figure 1 shows the publishers with the most games in that elite group at the time of this writing.

Figure 1.

There were also several publishers that had 2 games in the top 250 grossing. They included: OMGPOP, Funzio, Tap4Fun, Beeline Interactive, Fluik, Sega, Gameview, Haypi, Chair Entertainment, Halfbrick, Activision, Blue GNC, Chillingo and Playmesh. A lot of lesser known names mixed in with some game publishing giants.

If you’re interested in going with a publisher for your indie game, this chart might be of some use, as it’s clear some publishers can get their games to the top.

What Types of Games are Making Money

Obviously, as with all other stats, the types of games in the Top Grossing charts can fluctuate from day to day. Let’s take a look at which categories have the most games in the Top Grossing charts.

Keep in mind that each game can be attached to more than one category, so that’s why numbers don’t necessarily add up to 100.

Figure 2.

Based on the pattern we see here, one thing seems to be clear: SIMULATION games are the hit of the party right now.

It could be that simulation, adventure and role playing games are really popular right now which is why they are making so much money, OR it may well be that those are the types of games well suited to making money through In-App Purchases. Either way, this is something to consider.

How Games are Making Money

This is the big question. As I discussed previously, getting lots of downloads and making money are 2 very different realities in the App Store. Let’s take a look at how games are doing it.

Fewer and fewer games are making it into this list by up front sales alone. The exceptions to this in the top 50 are a pretty elite set of games:

Minecraft – Pocket Edition
Fruit Ninja
Swordigo (Haven’t played this one yet, but it’s in pretty good company right now)

Out of 39 games in the top 50 grossing apps, 3 of them cost money and DON’T have any In App Purchases (IAP). Even games like the almighty Angry Birds, Plants vs. Zombies and Infinity Blade contain IAP along with their up front cost.

All discussions of IAP being “evil” aside, developers understand that in order to keep players paying, they need to include IAP. Since app updates in the App Store are essentially free forever once you’ve purchased an app, IAP are one of the few ways to continue to maintain revenue without selling more copies.

So let’s dig a little deeper and take a look at what types of IAP are being used by the top grossing games.

Figure 3 shows the most common price points for IAP within the top 50 highest grossing games.

Figure 3.

As you can see, even though most games are free, the majority of IAP are far from free. 68% of all available IAP cost $4.99 or more. Also, there are almost as many IAP in the $19.99 – $99.99 price range as there are in the under $4.99 range!! The fact that IAP items in that upper range even exist shows that there are people out there willing to pay that amount of money on stuff in your game.

Of course, it’s impossible to state exactly what percentage of revenue comes from which IAP price points for any given game. However, the App Store does list IAP items in rank order (whether this is by items that generates most revenue, or items that sell the most units I’m not clear on), and let me just say that rarely does the cheapest IAP in each game take the top position.

More importantly, we need to look at the types of items being purchased. Here are the basic types I observed and some notes regarding each:

Virtual Currency – the most common IAP type, virtual currency is purchased with real money in order to use it to get virtual goods or some other “thing” within the game. However, I was surprised to find out that several games allow you to purchase virtual currency to play games that only give you virtual currency in return. As you may have guessed, casino type games fall into this category (slots, poker, etc).

Virtual Non-consumable Goods – these are things that you as a player get to keep in the game. They may provide some special skill or customization and are generally purchased to a) help you do better in the game or b) share the fact that you have them with your friends. Simulation games are made for these (land, buildings, equipment, animals, etc).

Consumables – these are things that you use in game and are used up, resulting in the need to purchase more (fuel, food, etc). These usually work well across most types of games. They also have the added “bonus” of keeping players coming back for more.

Speed ups – Not as prevalent, but these are items that allow things to happen more quickly in the game (plants grow quickly, level ups happen more quickly).

Level/Content Unlock – Though this was more popular early on the in App Store (particularly to differentiate between free Lite versions and paid Full versions), it’s certainly not that often used as an IAP today.

Clearly, the pattern is to sell virtual currency as an IAP, and then allow players to trade it in for something else of value, which in most cases tends to be either a non-consumable or consumable virtual good. Make no mistake though; these larger publishers have done a LOT of research, monitor their metrics very closely and tweak endlessly and have found that this type of purchase system works. As much as you as a developer may be against IAP, it has arrived and isn’t going away anytime soon.

Conclusions

I realize that what’s happening at the top of the Top Grossing charts (top 0.01%) isn’t necessarily 100% representative of what’s going on in the rest of the App Store. However, success at any level is worth looking into, so I think this is a good place to start.

Also, it’s important that, as a developer, you build the game YOU want to build. At the same time, I don’t think it hurts to be aware of the types of games that are bringing financial success in the App Store. Do you need to be at the top of the Top Grossing charts to make a living? I don’t think so, and there are lots of great games out there that never reach this point. At the same time, if this research helps indie devs make great games AND give them an idea of what it takes to get into the Top Grossing, that’s great.

Regardless of what people think of IAP, the fact is that millions of people are spending money buying them. I’m certainly not in agreement with all of the ways IAP are being used (ie, gambling, catering to addictive personalities), but instead of refusing to use them, maybe we as developers can use them more carefully, and really create value for the player. That’s a discussion for another day.

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My first order of business is to take a look at the mysterious Free App A Day (FAAD) service.

Before I begin, I need to make it clear that I am in no way promoting the use of this service. When I searched for info on whether this type of service actually works, there wasn’t much out there. My goal is to provide an objective look at what effect Free App A Day has on actual numbers so you can make an informed decision.

There are lots of services out there that claim to be able to get your app to the top of the App Store charts. Recently, some of these have been in the headlines due to the possibly unscrupulous methods by which the results are achieved. FAAD is a similar service, but it has largely escaped negative publicity and continues to be used by large publishers (Zynga, EA, Glu, Disney) as well as many indie game developers to market their games.

FAAD has pretty much been around since the early days of the App Store, so they purport to have tens of thousands of users who will download your app when it is featured by them, thereby shooting you up the App Store charts.

In terms of “Free App” promotion services, FAAD is not the only one out there. In fact, there is a Free App Alliance which links to a handful of these, and all seem to have varying degrees of success. However, none seem to be able to get your app to a higher chart position than FAAD.

The question every developer who has considered FAAD wants answered is: does it work?

In order to answer this question, I wanted to take a long hard look at the numbers and leave as little room for subjectivity as possible. Here is the methodology I used:

• Looked back on FAAD to find the free apps of the day over the past 2 months. In total, the results include 51 games featured on FAAD.
• I didn’t go further back than 2 months because things change so frequently on the App Store the past 2 months are probably a good indication of where things sit right now. Also, I didn’t want the holiday season to skew the results.
• I used AppAnnie to get app rankings over time. I chose AppAnnie because I’ve found it to be pretty reliable, and it’s easy to use. I also compared rankings for some games with AppFigures and found them to be pretty close, so I’m pretty confident with these numbers.
• I only tracked chart positions for iPhone in the US. I think this provides a decent snapshot, but keep that in mind if this is not your primary target market.
• Within this subset, I tracked positions in both the Games category as well as the Overall category. Since I focused solely on games for this study, this was appropriate. I ignored games subcategories as these vary wildly in terms of number of downloads vs. chart position in each subcategory.
• In addition to tracking chart positions before and after the FAAD promotion, I tracked things like how many times a game appeared as an Apple feature (Hot or New & Noteworthy), whether games were always free or went from paid to free for the promotion, and whether the game was able to crack the Top Grossing charts after the promotion.

Needless to say, the results were very interesting. Let’s take a look…

Effect on Games Category Chart Position

Looking at the games category first, here is where the games stood BEFORE their FAAD promotions:

• 11 launched with FAAD
• 17 were ranked outside of the top 1000
• 20 were ranked between 250 – 1000
• 3 were ranked inside the top 250

All in all, not too many surprises here, with the exception perhaps that 3 were already ranked higher than 250.

Figure 1 shows where games charted following FAAD. I took the highest chart position the game hit within 3 days of the FAAD promo. Generally, all games leveled off or started to decline after that amount of time.

Figure 1.

So from this, we can observe:

• less than 10% didn’t make it into the top 100 games,
• the most common top chart position landed somewhere between 30 and 40,
• 4 games made it into the top 10

Based on these results, it’s clear FAAD worked in pretty much ALL cases.

Effect on Overall Chart Position

A bump in the games category is great, but the overall charts are where I’d hope to see big gains, as this is where a game gets access to a huge number of eyeballs.

Prior to FAAD, games lined up like this:

• 11 launched with FAAD
• 32 were ranked lower than 1000
• 9 were ranked inside the top 1000 and most of those were ranked between 500 and 1000

Figure 2 shows overall chart position following FAAD.

Figure 2.

As you can see, all but 5 of the games made it into the top 250 overall free apps in the App Store, and 30 of them broke into the top 100. Not shown in the chart, 3 games made it into the top 10. Of ALL free apps. In the ENTIRE App Store.

Based on numbers given by Distimo back in December, roughly 25,000 downloads in a day will get you into the US top 50 Overall Free Charts, and about 80,000 will get you into the top 10. Huge numbers.

Looks pretty convincing so far doesn’t it?

Days Before a Fall

It’s one thing to get to the top of the charts, but it’s another to maintain it. Being sticky is the difference between Temple Run, and just about every other game that’s used FAAD.

Let’s be clear. FAAD makes it their job to get you near the top of the charts, but does nothing to keep you there. Nonetheless, it was interesting to see how much staying power games had following FAAD.

These results were a bit more subjective in that I had to look at the chart movement between days and decide when it looked like an app had started to tail downward. In most cases, it was pretty clear. In others, the downward slide was more subtle.

The results are shown in Figure 3.

Figure 3.

As you can see, over half of the games started tailing downward significantly within 5 days of the promo. That’s a pretty small window to make your money back (no, FAAD is NOT a free service – more on that to follow), much less earn some money on top of that.

So it looks like even though the games got a lot of downloads, most of them weren’t able to make their game stick.

You probably noticed from Figure 3 that there is one game that maintained chart rank far longer than the others. That was a game called Ski on Neon. Whether that was a result of using other services or getting good word of mouth is tough to determine. Some may say that a lot of it’s success is actually a result of the success of Tiny Wings, since the game bears a striking resemblance to that hit game. I’ll stay away from discussions of cloning in this post. Nevertheless, that game stuck and it has held on for 50 days (and continues to hold a high chart position at the time of this writing).

The results show that the window is short, and you really need to have a game that can find an audience during that time.

Effect on Game Revenue

So this is probably the section of the article you’ve been waiting for. Getting good chart position is great, but for a free app, if you can’t use that to monetize, you may as well not waste your time with the service.

During the early days of FAAD, the approach seemed to be to change the pricing of your app to free for a few days, then go back to paid. The hope was that the people who downloaded the app for free would generate enough exposure to increase sales of the paid app after the promotion. It appears to have been successful as many have reported revenue after going back to paid was higher than before the promo. However, sales inevitably returned to pre-FAAD levels over time.

Nowadays, it’s pretty clear that in order to make FAAD effective, you need to use a freemium model for your game. Continue giving away the game for free after the promotion, and charge for In-App Purchases. All discussions of ethics of the freemium model aside, let’s look at the numbers.

So how did our pool of games do with regards to revenue? This is difficult to say for many reasons:

• The only way to even estimate revenue for free games is to use chart position on the Top Grossing charts.
• Revenue for any given chart position changes over time.
• Revenue for any given chart position changes depending on the day of the week.
• App revenue and chart position isn’t something that’s openly discussed
• The revenue vs chart position is an exponential curve, not linear

So all I can do is present chart positions on the Top Grossing charts, and talk about those. Figure 4 shows the results. If anyone wants to share revenue numbers based on experience, I’d love to hear it in the comments.

Figure 4.

The chart positions on the Overall Top Grossing chart in the App Store were pretty varied. Here are some highlights:

• Only 25 of the 51 games broke into the top 1000 top grossing.
• For those that did break into the top 1000, they were all over the map.
• Of the 7 games that made it into the coveted top 100 top grossing, 6 of those were games from large publishers, specifically, Glu Mobile (2), Zynga (2), Disney (1) and Gree (1). So it’s likely these games had a LOT of additional marketing dollars behind them.
• The highest position held by any of the games in our test pool was 13. This was held by Zynga’s Dream Heights. Ironically, the date that Dream Heights held the #13 spot on top grossing, NimbleBit’s Tiny Tower held spot #14.

Based on some numbers shared by other developers on Twitter, I estimate it takes roughly $350-400/day in revenue (before Apple’s cut) to break into the Top Grossing 1000 on the US iPhone chart. Again, that varies widely even during the course of a week, as some have reported that over the weekend, revenue generally doubles, but doesn’t affect chart position much. Again, I stress, this is a *rough* estimate.

A HUGE thanks to @millsustwo, @sethsandler and @rykos for being willing to share sales numbers. If you’re a mobile app developer go ahead and do yourself a big favor and FOLLOW them now.

Other Interesting Tidbits

I also tracked the number of locations where the games were featured by Apple (New & Noteworthy and Hot) both before and after the promotion. Here are my findings:

• In most cases, FAAD had little effect on the number of locations in the App Store where the game was featured
• In nearly all cases (except for newly launched games), the games were already being featured in some locations of the App Store in various countries. So it’s clear that developers/publishers did other leg work besides using FAAD.
• This is an important observation because if there was a consistent increase in Apple features, that could have had an indirect impact on chart positions.

Of the 51 games, 33 were NOT free games prior to FAAD. An additional 10 were brand new. So only 8 were free before their stint on FAAD. In my mind, this holds some significance, as there are several sites and apps that track apps/games that go from free to paid, which results in additional eyes getting news of these apps. This could result in FAAD potentially being more effective as those games that went paid to free could have received more downloads from these sources.

There was one game that stuck out from the others. In fact, after looking at the numbers, I questioned why it used FAAD at all. It was a game called Zombie Jombie. At the time it undertook the FAAD promo, it was already sitting at #6 on the OVERALL chart. FAAD bumped it up to a high position of #5. It also hit on the Top Grossing chart all the way up to #28, which is huge. My guess is that it had previously used another chart boosting service, and perhaps it worked better than anticipated, to a point where FAAD had virtually no effect on chart position.

The Cost of It All

So this all sounds pretty good right? It appears that whatever FAAD is doing, the result is a dramatic number of downloads resulting in an equally dramatic rise in the charts.

Here’s the rub.

Results like these don’t come cheap. Word on the streets is that the charge for this service can range between $4k and $20k(!) and is booked up weeks in advance.

If you look at the revenue numbers we discussed above, if you get all the way up to #1000 on the Top Grossing chart, you would need to stay there for around 3 weeks just to break even (after Apple takes it’s cut), and it’s clear from the data that the odds of doing this aren’t in your favor. Of course, the higher you go, the number of days you need to stay there decreases exponentially. Also, I realize that these numbers don’t take into account iPad sales, as well as sales in other countries, so you need to factor that into the big picture.

So the question becomes whether the pay off will more than offset the up front cost. For large publishers that already have brand awareness and staying power, this is a great jumping off point. For the majority of others, it seems that profitability using this service is an uphill battle.

Any personal experiences? Would love to hear from you in the comments.

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But wait. Let’s think about that for a moment. 3 million. In 3 days. For a product in a category that didn’t exist 2 years ago.

Since Apple sells millions of units of it’s products every month, numbers like this tend to be glanced over. If it was any other company, this would be BIG news. But it’s Apple. We expect numbers like this. But in order to see what these numbers actually mean, I wanted to do some digging and find some numbers to compare this to.

So here’s what I found.

Before I start, I want to point out that my goal is to be objective. I am NOT an Apple fanboy. I use their products (MacBook, iMac, iPad), but I don’t line up to get their latest toys. I also own a PC, Kindle Fire, Nook Color and my current phone is a Droid R2D2. Moving on…

iPad 1 & 2

When the iPad first launched back in April 2010, it sold 300,000 units during opening weekend. At the time, this was pretty impressive, considering it was a category of computing that didn’t exist. Unproven technology. In all, it took over 3 months to reach 3 million sales.

When the iPad 2 launched in 2011, the problem was lack of supply, which was well publicized. Stores sold out quickly and there just weren’t enough units to meet demand. This obviously makes sales numbers a bit difficult to compare. However, by some estimates, anywhere between 500,000 – 1 million units were sold opening weekend.

So the NEW iPad sold 3x more units than the iPad 2. That in itself is impressive. What’s more impressive to me is that in my mind, the iPad 2 was a bigger update than the NEW iPad. It was considerably thinner and lighter, introduced a camera, and by comparison, ran noticeably faster than it’s predecessor (sure, the NEW iPad has a faster processor, but it’s also pushing around a LOT more pixels, so the difference in speed isn’t going to be as noticeable). So the fact that it sold that much better than the iPad 2 is really telling.

iPhone

Now let’s look at numbers for the iPhone. I know these aren’t really comparable numbers, but there is one thing I wanted to point out.

The first generation iPhone sold 270,000 units during opening weekend. The third generation iPhone (3GS) sold 1 million. So even though the first generation numbers for the iPhone and iPad were nearly even, the third generation iPad outsold the third gen iPhone by 3x. Crazy.

Android Tablets

Unfortunately, most manufacturers aren’t as open with their actual sales numbers as Apple is. So this makes actual numbers difficult to confirm. That’s problem #1.

Problem 2 is that most other manufacturers talk about units in terms of number SHIPPED, not SOLD as Apple does. So it’s likely that the actual number sold will be lower than the shipped number as many units sit on shelves, and ultimately get shipped back to the manufacturer.

According to a study by Gartner on tablet sales, Android devices were projected to run in the neighborhood of 11 million for 2011. That sounds pretty decent actually.

That number is boosted heavily by the Kindle Fire and Nook Color/Tablet.

The Kindle Fire was reported to have sold 3 million units in the first 3 weeks after launch. Aside from the NEW iPad numbers, these are perhaps the most impressive sales figures in my mind. Considering this is a first generation product, that shows how well Amazon has done in creating something people actually want (which probably says more for Amazon’s content than it’s hardware). In addition, the Nook Color/Tablet sold 1.5 million units in Q4 of 2011. Also a good number. One important thing to note is that these tablets go for roughly 1/3 of the average price of an iPad, so obviously the iPad can’t compete from a cost perspective.

So I don’t think it’s unreasonable to say that these 2 tablets could have accounted for half of all of the Android tablets that sold in 2011.

The only other Android tablet I found hard numbers on was the Motorola Xoom & Xyboard. Apparently, those sold 200,000 units in Q4 of 2011. Not nearly as impressive.

The other big name Android tablet is the Samsung Galaxy Tab. There has been a lot of speculation as to actual numbers of these sold, but from the sounds of it, the actual number sold in 2011 may have been closer to 200,000 than the reported 2 million it reportedly shipped. Again, no way to confirm these numbers at this point.

Other Tablets

Other notable tablets include the RIM PlayBook and HP TouchPad. The PlayBook reportedly sold 200,000 units in Q2 2011, and likely sold quite a few more later in the year when the price was reduced to $199. The TouchPad made headlines with it’s fire sale at $99, which resulted in an estimated 2 million units sold during 2011. However, at that price point, comparing it with iPad sales doesn’t really fly.

Conclusion

If you look at the numbers objectively, it is impressive how Apple is able to sell that many units, particularly when you consider:

• The price point of the iPad rests between $499 and $829. Not cheap. In fact, the top of the line iPad is only $170 cheaper than a MacBook Air.
• From what I’ve seen, there has been little advertising surrounding the NEW iPad. In fact, every iPad billboard I’ve seen is advertising the iPad 2.
• Aside from the retina display, there isn’t a lot that stands out in my mind about the NEW iPad. It’s also thicker and heavier than the iPad 2.
• Unlike phones, which just about everyone has a real need for, tablets are still a bit uncertain in terms of the purpose they fulfill. And they are certainly not proven to be good for content creation.

Hopefully that helps put some perspective around 3 million.

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It’s no secret that the App Store is home to several success stories from small companies who both built great games and also had good timing. Games like Tiny Wings, Trainyard, Temple Run, Tiny Tower, Jetpack Joyride and even the almighty Angry Birds were created by very small indie development teams. So I started by learning as much about the platform as I could, reading documented experiences from developers, getting hard numbers surrounding the App Store and getting a better understanding of how the platform works in general. Let’s just say these past few months have been, well, eye opening.

Let me start by saying that though mobile game development may appear glamorous on the surface, the cold, hard truth is that it’s a stressful, sleep depriving, money bleeding, thought consuming roller coaster ride of emotions. If you are full-time employed, imagine the best and worst work days of your life, then multiply those extremes by 1000. That puts you in the ballpark. This is based on my own experiences.

Along the way, I appreciated the developers who shared their experiences and stats, but early on, I still didn’t have a very fleshed out picture of the ins and outs of the App Store. After 6 months, I have a much better picture. Here are my thoughts on the current state of the App Store and being a developer on this platform.

Competition

As of this writing, there are well over 600,000 apps available in the App Store. Sounds like a lot? It is. What’s even scarier is that according to Apple, 26,000 new apps are submitted to the store EVERY WEEK. Granted, they say that roughly 30% of those are rejected for various reasons, so if we work with that number, about 18,000 new apps are accepted into the store weekly, which works out to well over 900,000 new apps in the store by this time next year. That’s IF the number of submissions stays flat, which is doubtful as more and more people get into app development. You think it’s hard to compete with today’s flood of apps, the reality is that it will only get harder. This isn’t 2009 anymore.

Not only are you competing with a large number of other apps for eyeballs, if you’re building games, you’re also competing against large, well funded game studios like EA, Zynga and GameLoft.

Let’s look at an example. Doodle Jump is a cool game, no doubt. I’ve purchased it and played it. Between April 2009 and March 2011, it sold over 10 MILLION copies. Crazy. However, I’m sure few would disagree with me when I say that if it was released today, it would be hard pressed to reach those sales figures. 2009 was a time when the number of games in the App Store numbered in the few thousand, not hundreds of thousands. Less competition, more chance of getting seen. Also, less chance that 10 other games exist that are pretty similar to the one you  made. That’s not to say you can’t stand out, but the level of polish you need to stand out is a lot higher now than it was 3 years ago.

But you say, “Sure, but most of these 600,000 apps are crap.” Probably true. However, all that does is make it more difficult to separate the wheat from the chaff. Which leads directly into my next issue.

Discoverability (or lack thereof)

App discoverability in the App Store was something I talked about early on in my journey. As much as Apple is lauded for it’s UX, the App Store is certainly never mentioned in those terms. It’s like Apple’s own little Bizarro world. If you’ve ever tried to find something (without knowing the exact name of the thing you were looking for), you know exactly what I’m talking about.

Recently, Apple acquired Chomp to help fix App Store discoverability. While it remains to be seen what comes out of this, searching for apps is one of the biggest sore points with the App Store.

This directly affects you as a developer because this limits your options when it comes to being successful. Either you have to get featured by Apple (see below), or you need to first get into the top of the charts (also see below) in order to get anyone to see your app, much less download it.

Front Page Visibility (a.k.a. getting featured by Apple)

So how does Apple pick the apps they feature as “New & Noteworthy” or “What’s Hot?” Though I can’t pretend to come to a conclusion on this by any scientific means, it appears from the outside that Apple let’s the community drive this to a degree. Let me explain.

I don’t have specific numbers on this, however, it’s clear that the people at Apple keep watch over several mobile games review sites such as PocketGamer, 148Apps and most noticeably, TouchArcade. On a regular basis, I cross referenced games featured in the New & Noteworthy section of the App Store with games reviewed at TouchArcade, and there were a large number that happened to exist in both locations. To be fair, a lot of the games reviewed are really great games and absolutely deserve the visibility. At the same time, there are lots of great games that don’t get reviewed, and few of those seemed to end up in New & Noteworthy.

I should clarify that the TouchArcade team is a super open and forthright group of people (on Twitter they go by @hodapp, @jaredTA, @blakespot, @nissacam and @nicholsonb). I met with a couple of them to demo my upcoming game (Toyride) at GDC, and they were happy to take the time to look at it. My point is, if you have a great game, get it on the TouchArcade forums at a minimum. Following the team on Twitter is also a good idea, and heck, reach out to them in a non-stalking kind of way.

Gaming the System

Besides getting featured by Apple, the other way to have huge success with your game is to get to the top of the charts. Unfortunately, this a chicken-and-egg type of problem. If sales aren’t good, you can’t get to the top of the charts, which you need in order increase sales and move you even further up the top of the charts. So how do you GET to the top of the charts. It used to be that getting featured by Apple was a sure fire way to do that. Not today.

If you’ve read anything about the App Store over the past few months, you’ve probably  read about companies that have found a way to game the system. Essentially, this includes anything from having bot farms that auto-download thousands of copies of your app to companies paying people to download an app in turn for money, even if you never open the app once (yes, they’ll pay YOU to download apps). Aside from the ethical issues this brings up, it’s a way to bring an app to the top of charts, which in turn will drive REAL downloads, yes, downloads from real people who will then bring the developer actual revenue. Of course, these companies charge HUGE amounts of money to get you to the top (anywhere between 5k – 14k is what I’ve heard), but if you HAVE money, then it’s really a no-brainer, because in a lot of cases, it works. Apple has threatened to remove apps that use these practices, but I’m not sure I’ve heard of any actual apps being removed for this reason.

So the need arose to get apps to the top of the charts, and these companies sprang up to meet that need. Don’t you love free-market economics?

Price (the fastest path to free)

The reason why bot farming and pay-per-install works as mentioned above, is that these days, more games than not are free and use other means to monetize such as In-App Purchases or ads. So that’s one consequence of free apps on the App Store.

There are other large scale consequences that have arisen as a result of this race to the bottom in terms of app prices. One of the other heated debates surrounding the App Store (games in particular) is whether giving away an app for free, then using In-App Purchases to monetize the user, is a good and/or ethical model. Freemium is the term coined to refer to this model. I’m not going to address this topic here in depth, however, one of the reasons that this is even an issue is that companies have chosen to punish players for not paying for things, rather than rewarding them for paying for things. I think there are a lot of good freemium games out there mixed in with the bad ones. Regardless, this model is here to stay.

Studies have long proven that people are MUCH more likely to take something that’s free, than something that costs even a penny. A great read on this topic is Free: the Future of Radical Price by Chris Anderson. So it was probably inevitable that the App Store has taken this route. Unfortunately, this means that it’s becoming increasingly difficult to make money on app sales directly. As mentioned at GDC, 17 of the 20 TOP GROSSING apps (yes, apps that make the most money) are free.

It also leads into my next point…

Customer Expectations

A side effect of the race to the bottom when it comes to pricing is that it has fundamentally altered how people put value on apps and games in the App Store. One of the running jokes of game devs on Twitter is that people will walk into a coffee shop and pay $4 for a specialty coffee that took 30 seconds to make, but they’ll spend hours researching your 99 cent game before purchasing it. Welcome to the App Store. If I were to go back 5 years (pre-iPhone), show you a game like Infinity Blade, and tell you it would only cost you $5.99, would you have hesitated? Yet today, $5.99 is almost UNHEARD of in the App Store. Unless you are a huge studio with a ton of marketing dollars behind you, almost no one will pay $5.99 for your game. That’s the truth.

The expectation today is that I should be able to get 80% of games for free, with the other 20% at 99 cents. Not only do players EXPECT to pay less, they EXPECT to get more. So you can’t put together a game in a weekend, put it up on the App Store and expect success. In fact, most decent games take TEAMS of developers MONTHS to make. For every success like Jetpack Joyride, there is a team of developers working behind the scenes (9 months in this case, after they initially budgeted 4 weeks) to bring it to life. The name of the game is polish.

So not only do you have to deal with the huge risk that few people will buy your game, you also have to put up a lot of your own money up front to even take that risk.

Cloners & Fakers

So you’ve spent months polishing your game and bringing it to market. And it does well. Perhaps it does TOO well. Think that’s a great position to be in? I honestly wouldn’t know based on experience, however, what I do know is that you’ve now entered the realm of the App Store where an entirely new problem exists.

One of the greatest things about building games for iOS is that the barrier to entry is pretty low. You pay for your developer license, get the tools, and you’re off and running. That’s also one of the biggest problems. In a world where patents mean nothing (and who knows, patents may make matters even worse than they are now), you’re pretty much left with a free for all, where anything goes. Well, just about anything.

The most publicized case of game cloning is probably Dream Heights, a game by Zynga in which it’s hard to ignore the similarities in game mechanics between it and Tiny Tower, the game Apple lauded as Game of the Year. In fact, in quite possibly the most clever response to this type of cloning I’ve seen, NimbleBit wrote a letter to Zynga displaying some of the resemblances. Moral of the story: if your game is successful, EXPECT others to build similar games in order to muscle in on some of the game’s popularity, and be concerned when it’s big companies with deep pockets. Other highly publicized cases of cloning have taken place with the guys at Vlambeer with their game Radical Fishing and Spry Fox’s Triple Town. Dozens more are out there.

The other well known method for leeching off of an app’s success is the rise of the fakers. Fakers are pretty much scammers that create apps that are either designed to look like a duplicate of your game (a very convincing one appeared recently that looked like the actual Clear app), or a spin-off/sequel. The original game’s popularity is enough to get people to pay for and download these apps before they realize that they are not anything more than a companion guide or just plain don’t do anything. Temple Run likely holds the record for most fake games produced for a real game. Apple has responded by removing apps like this from the App Store, but in all honesty, it’s amazing to me that apps like this can even make it through review.

Luck of the Draw

If all of the above weren’t enough, most of the time you just plain have to be lucky.

The creators of Angry Birds were a step away from going broke after creating over 50 different iterations of their game that never stuck. Now, they have a franchise worth over $1 billion.

Trainyard never took off until developer Matt Rix offered a lite version that was picked up by a news site which ultimately led it to be featured by Apple.

Even Temple Run was out of the top 100 paid games, when it went free on Free App a Day, and spread virally.

It’s impossible to predict success. You just learn from it and do the best you can next time.

Your Cut

If finding success was difficult enough, keep in mind that we haven’t even translated app revenue into real world dollars. Remember that for every dollar in revenue your app makes, you will only see 70 cents of that. And of course, that’s a pre-tax dollar amount. Apple doesn’t hold back taxes or send you a 1099 at the end of the year, so you have to plan accordingly and remit everything yourself. Also, in some countries, some amounts will be withheld by Apple (ie, Europe, Japan, etc) due to laws in those regions. There is a good explanation of how app store tax works in Japan here.

The Numbers

Ok, so to finish off, here are some real hard(ish) numbers I’ve dug up about life in the App Store. Take them for what they’re worth. In all honesty, REAL figures are nearly impossible to come by.

~600,000 – apps in the App Store
>25,000,000,000 – number of apps downloaded
143,000 – number of active publishers on App Store
70% – number of developers that publish only 1 game
26,000 – number of new app submissions/week
30% – Apple’s cut of app sales
315,000,000 – number of iOS devices sold ever
62,000,000 – number of iOS devices sold Q4 2011

If you have a passion to make your game and have it succeed in spite of the odds, then more power to you. I just hope some of this info helps you make some informed decisions during that process. Good luck!

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