The Harsh Realities of Making Mobile Games for a Living

Several months ago, I started down the long and treacherous road of indie mobile game development. In the beginning, my goal was to develop for as many platforms as possible. Ultimately, the lure of Apple’s App Store and accompanying iOS devices was too great to resist, so that’s where I’ve spent my focus over the past few weeks.

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!

If you enjoyed this article, follow Phil on Twitter for related stuff.

23 Responses to “The Harsh Realities of Making Mobile Games for a Living”

  1. corey lansdell March 19, 2012 at 12:22 pm # Reply

    Hey Phil!
    Really enjoyed this post. Great bits of information here. In your research did you find any details related to other types of apps apart from games. Are there variations in opportunity based on the type of app you build?

    • Phil Chung March 19, 2012 at 1:10 pm # Reply

      Glad you enjoyed it Corey. My research is based primarily on my experience with the App Store from the games side of things, but I think many of the things I’ve touched on can also be applied to non-game based apps.

      Perhaps the one big difference is in monetization. For games, it’s pretty easy to charge for In-App Purchases but that’s harder to justify for other types of apps. So I’m not sure freemium will catch on for apps other than games, which means that those types of apps generally aren’t free, or are free but largely ad supported.

      Also, if you want some stats on number of apps by category in the App Store, 148Apps is a good resource: http://148apps.biz/app-store-metrics/?mpage=catcount

  2. turboRamble March 19, 2012 at 2:36 pm # Reply

    Thank you for this article. It was very informative, and, as an indie game developer myself, it’s nice to know more about how the AppStore works. The whole “grass is always greener” saying certainly applies here. It’s easy to think that small-time games can make big money on the AppStore, but that’s rarely the case now.

    Again, thank you for the article.

    • Phil Chung March 20, 2012 at 8:33 am # Reply

      Glad it was helpful :)

  3. Nicholas Lovell March 20, 2012 at 2:27 am # Reply

    These days, I think few people make it on the strength of a single game. Cross-promotion is the key, which means that you have to have a plan for creating multiple games, or of building relationships with other indie game developers to cross-promote each other’s work.

    The days of the AppStore being a route to easy money are over. I don’t think the days of it being a viable business (provided you use IAP) are.

    • Phil Chung March 20, 2012 at 8:32 am # Reply

      I agree that cross promotion through your own network of games, or through other developers games has been successful for some. Unfortunately, it seems to be few and far between. Ya, the gold rush is certainly over.

      BTW, I enjoyed the session you moderated at GDC. Really excellent stuff.

  4. Jeffry Houser March 20, 2012 at 5:56 am # Reply

    A lot of the things you mention, such as the trouble getting noticed and the threat of competitors are not unique to game developers, or even app store developers. It’s the reality of any business.

    • Phil Chung March 20, 2012 at 8:35 am # Reply

      Definitely, some of these apply to all businesses. I do think there are issues unique to the App Store though, and I’ve tried to touch on those here as well.

  5. Jeremiah Nunn March 20, 2012 at 7:00 pm # Reply

    I think you’re being a little too negative about what you can expect. I’m guessing maybe this is from your own experience with your iOS apps? But as others have mentioned, the approach should be a combination of cross promoting with other apps, developing multiple apps, and cross platform development.

    If you are interested, I can find an article (with graphs, yay!) that broke down the success rates for developers, grouped by number of apps released. Releasing more apps greatly improves your chances at commercial success. This could be for a lot of reasons; I’d like to think at least part of it is that over time, you get better at the process.

    I would recommend checking out something like Moai, CoronaSDK, or even Unity3D for cross platform. Android Market won’t generate nearly the sales that the AppStore will, but most of my research has shown it to be about 20%. At that rate, it’s worth it to look at cross platform, especially if you can get it for almost no cost to you. Right now, you can get Unity3D licenses for iOS and Android for free (offer good until April 18th).

    With respect to customers expecting higher quality for lower prices, I have at least a couple of anecdotal data points to refute that. Check out Eiswuxe’s blog, specifically

    http://www.eiswuxe.de/developer-income-report-february-2012/

    His apps aren’t ridiculously high quality (solo developer), but he’s making a decent amount, and mostly from one app. At any rate, just wanted to say keep at it; don’t quit just because the chance of a huge payout is vanishing. There’s still plenty of room for developers to make a respectable living.

    • Phil Chung March 21, 2012 at 8:32 am # Reply

      My goal with this article was to point out all of the issues with the current system, and not sugar coat anything. A lot of developers jump into app development dreaming of a gold rush, which has certainly come and gone. We need to be aware of all of the potential difficulties.

      Having said that, there is definitely potential that I see, based on what people have shared, but for every success story I read, I see at least a few stories of developers selling 2 or 3 copies a day.

  6. HJ Choi March 20, 2012 at 9:35 pm # Reply

    Great post! As a part-time game developer I can definitely relate to some of the things you mention, and I might have to re-read this whenever I get the itch to jump in full-time…

    I just wanted to add a small correction: you said “even if you never open the app once”, you are charged for incentivized install campaigns. This part is not true – the way these companies track conversions is when a user runs the app to the point proposed by the advertiser (developer). So for instance, you could run a campaign that says “I will give the user $0.15, if they play up to level 3″ or something like that.

    Also, paid game developers such as myself run campaigns that pay users slightly under how much Apple pays out. I have a campaign running for my game Cool Curlings (99¢) at 50¢, which gets me 20¢ net per new user, and it’s likely people who might not have tried my game at all. In a typical month, this contributes 30-40% of my App Store sales, leading to 10-15% extra income.

    Disclaimer: my “day job” is at Tapjoy.

    • Phil Chung March 21, 2012 at 8:35 am # Reply

      I guess my explanation of incentivized installs was a bit superficial and I know there are a lot of different depths to it. Thanks for bringing up another example of how it works.

      • Andy March 22, 2012 at 11:50 am # Reply

        Knowing other companies do this I be tempted to as well. You have to admit it’s much more effective than advertising.

        And if the game were somewhat complex or a networked multiplayer game I would think that would be the most cost effective way to test the game and the game network server.

        But I don’t have $5000 – $14,000 to pay for such luxories.

  7. John Tran March 21, 2012 at 11:49 am # Reply

    Wow! You just summarized everything I went through developing our latest puzzler. Rock vs. Paper vs. Scissors Rumble took me three months to develop. It has not reached its full potential yet. We might look into other avenues as you mentioned (FAAD, app publishers like Big Fish, etc). That said…This is a great read…It is kind of discouraging…Since I really wanted to make developing games my full-time gig…The harsh reality is that it is tough out there and you have to adapt and persevere…And with a little bit of luck, you might just break through…Thanks for sharing!

    • Phil Chung March 24, 2012 at 8:29 pm # Reply

      You said it…adapt and persevere. Things are constantly changing. Apple has full control over the App Store environment so things may look completely different tomorrow. Who knows. Good luck in the future.

  8. Dwayne March 23, 2012 at 7:34 am # Reply

    Excellent article and it has generated some very good responses!

  9. Danyal March 24, 2012 at 2:05 am # Reply

    For anything worth doing well there will be obstacles – writing a book, making a game, becoming a sportsman or athlete, going to a good university. Of course there will be barriers that stand in a hopeful game developer’s way. Let people find out for themselves. Would the makers of any of the games you listed have proceeded had they taken your post to heart?

    • Phil Chung March 24, 2012 at 8:27 pm # Reply

      Sure, perhaps ignorance is bliss in this case. But I think it’s helpful for people to understand how the App store works and not just blindly go in thinking making a good game is the only thing you need to do, when there are other factors at play. Hopefully, more than discourage developers from trying, it will make them actually think about what obstacles are out there, and work through or around those.

      • Karlo March 30, 2012 at 2:59 am # Reply

        Thanks for this article. It was an eye opener for me too. It seems that having a good quality game just doesn’t cut it anymore. Most good games I know that got released is just piled on over until it is lost to oblivion.

        I wonder if this phenomenon is happening to the flash game development scene as well. I’m not up to date on it but I’ve heard that it is already in decline due to some of the reasons above ( competition, cost, pricing, etc)

  10. David March 28, 2012 at 12:41 pm # Reply

    Definitely a great article! Lots to think about.

  11. Zeeshan A Zakaria May 2, 2012 at 2:54 pm # Reply

    Another great article. You are a really good writer. Although this article is more discouraging than encouraging, but I am sure there must be an intelligent way to make some decent money of newly submitted apps. I am now thinking hard what can I come up with. Seems like I’ll have to do more homework than I had previously thought.

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