This is a guest post written by Bo Wang from iPhone app developer house Team iBokan, part of Bokan Technologies, about the lessons learned while conducting a pricing experiment on brick game Galaxy Impact, the company’s first iPhone application. For a different take on paid versus ad-supported iPhone apps, read our previous post on the subject.
Galaxy Impact, a classic brick-break game and the first iPhone app created by Team iBokan, went on sale in iTunes App Store on Oct 27, 2008, free of charge. It had about 220,000 downloads in its first two weeks and was ranked as No 10 in “Top Free Apps” in the Game category and No 20 in “Top Free Apps” overall, before we started charging a $.99 fee for purchases on Nov 9th 2008.
Here are the details:
Galaxy Impact downloads before start charging $.99
The downloads for Galaxy Impact in its first two weeks, broken down:
* 10/27: 1,377 (the first day on sale)
* 10/28: 10,839
* 10/29: 13,110
* 10/30: 18,875
* 10/31: 18,556
* 11/01: 25,898
* 11/02: 28,390
* 11/03: 26,156
* 11/04: 18,182
* 11/05: 16,633
* 11/06: 14,883
* 11/07: 13,024
* 11/08: 10,928
* 11/09: 1,153 (started charging: 27 downloads PAID)
* 11/10: 23
* 11/11: 20
* 11/12: 1,435 (free of charge again)
So the free downloads vs for-fee downloads is about 400:1. That means for 220,000 downloads, our revenue amounted to $550. It’s obvious that there was no way we could make money out of this with a $.99 list price.
Another lesson learned: before the price change (from free to $.99), average downloads per day was above 10,000 but after price changed back to free, the average rebounced to about 1,000 per day, which continued for a long time. If we had not experimented with charging for the app, the total number of downloads would have been much higher.
Next, we decided to try advertising and updated Galaxy Impact with ads from Admob along with other new features. There was a huge spike of update downloads with a 30,647 peak of November 22, two days after the update release.
Galaxy Impact Downloads after Update
As you can see, the huge traffic for the update does not increase the number of new downloads, even if the app remains free of charge. To this day (Mar 18th), there are about 500,000 downloads in total and about 160,000 updates (one third of new downloads). Note, only updates have ads.
So how was Galaxy Impact doing with advertising powered by Admob? Let’s take a peek at the first month of the year.
Ad revenue from Admob for Galaxy Impact (Jan 2009)
The highest daily ad revenue was $16.37 (on 17 January) and right now it’s about $2.50 per day.
Here’s our monthly ad revenue, broken down:
* Nov 2008: $70.81 (11/20 - 11/30)
* Dec 2008: $236
* Jan 2009: $175
* Feb 2009: $142
* Mar 2009: $67 (03/01 - 18)
With no update or marketing, the current rate of free downloads for Galaxy Impact is about 120 per day. If we apply for-fee ratio, this transfers to about 0.3 daily downloads at a $.99 price, which leads to revenue of $.21 for us, or about 8.4% of what we are making right now on a daily basis ($2.50).
Conclusion
In the case of Galaxy Impact, we have done absolutely no marketing and did 2 updates with new features.
1. Free downloads vs for fee downloads ($.99) is 400:1
2. New downloads vs updates is about 3:1
3. If you decide to go with ad support, do it from the very beginning.
4. Updating does not help much
5. Ad revenue in the long run is higher than sales revenue
6. It’s hardly a sustainable business for most common app developers (with average apps).
See all
Post
Perhaps a game that isn’t based on the old and over-done brick breaking concept might do better? More information such as your games user rating and general feedback that customers submitted on iTunes would be relevant in your discussion too?
Yes, we need ad-supported stupid games. And, we need spyware as well. Ask toolbar or Zwinky anybody?
+1
Wow, when you charge for something people can get for free, they don’t buy it. Funny that.
Maybe I should release a graph of the iDie downloads (over a million to date). But would I ever attempt to charge for such a thing? No way, because its obvious no one would buy it.
From my personal experience, I have only purchased games after trying some free trial versions first. So perhaps the best strategy is an ad-supported trial version with a paid full version.
I’d say interesting numbers you’ve got there especially for your sales. I guess people expect something that’s already free to remain free unless you go the free (or lite) vs paid versions route like: http://www.techcrunch.com/2009.....developer/
Is AdMob the highest paying mobile ad network that’s available to iPhone apps?
I don’t think there any hard and fast rules about what works best here. I released my first iPhone app as ad-supported from day one. I’m now just about to release another one which will be “pay ware” as something of an experiment.
Very disturbing numbers.
No 20 in “Top Free Apps” overall has an avarage of 10,000 downloads a day?!
It’s way too low, and defiently not a business case.
Could be that all those pretty numbers of many Cinderela stories are just part of a larger Apple public relations campaign? Someone has to persuade new developers to come and build application for Apple for free.
Again, very disturbing numbers.
Come closer folks, here in this side of the museum you can see a M$ shill, be careful, it doesn’t bite unless molested.
Except for the fact that he’s right, and made the most important observation in this entire thread. Disturbing indeed.
I really doubt how Apple ranks those apps. In my category, one app with only six reviews was number 2. I have a very strong impression that if you have only one free App, Apple is not going to like it.
The number is absolutely true but it was Oct-Nov, 2008. Right now it might be a bit differernt
We also released Galaxy Impact II: Ignite, at price of $.99. The number is quite similar to the for-fee downloads of Galaxy Impact.
A key point that seems to escape you - your 400:1 ratio is something you can *work on improving*.
1) Better / more convincing sales page
2) Code some features that people would be more willing to pay for.
3) Advertise the thing. You don’t even need to pay for this - set up revenue share deals with people who have audiences who would buy it.
You’ve just stuck a pay wall on something that was previously free leaving all other things the same - and you’re wondering why your conversions are low?
These numbers aren’t “disturbing” as the commenter above said - they are just untested and unoptimised. I bet a whole bunch of journos use this 400:1 soundbite as blog fodder though.
Insightful comment.
“Ad-supported” isn’t the only business model that works on the web. Sure it isn’t easy to sell things on the web, but that’s why you have to work on
a) an even better sales pitch
b) the quality of your product, and
c) increasing the size of the market in which you sell
For example, TechCrunch, which is largely ad-supported, has worked over the years on diversifying its income. Present day TC now earns revenue from events, sales of business intelligence reports and probably lots more than what most of us privy to.
If you are having difficulties selling your games, then you may need to introspect, conduct surveys and find out what people are truly ready to pay for.
This is odd coming from someone who is involved in an online ad management firm but the truth has to be said.
Ads aren’t the only route. It is just one of many.
Mark
That’s very true. We at iBokan are very good at engineering and creating iphone apps, but very bad on marketing and sales.
If anyone who’s interested in teaming up with us on this, we’d be more than happy to do deals.
–Bo
http://www.iBokan.com
Pretty much knew this already. It’s spot on. The great thing about stats is you don’t need big numbers, such as a top 10 app, to get the same results. A small sample will do.
We’d already crunched the numbers in our shop and decided we either have to charge, go free with a lite version to cross-sell, or do ads right from the start, and then stick to it.
Does cross-sell work for you? We did that in Galaxy Impact linking to Galaxy Impact II: Ignite. It does not seem to be a big help.
–Bo
http://www.iBokan.com
you made three major mistakes. first, you started charging after having the app for free. second, you changed back to free after being paid, i bet a lot of users who bought the app got pretty pissed. and three….. well, you went with admob.
I agree with youngfook, and I also think the conclusions of this article (especially #6) should not necessarily be applied to any application except Galaxy Impact. One set of data do not make a convincing conclusion, except for that sample used. A more creative, novel app that brings something new or different to the platform is something I regularly pay for. I don’t typically pay for reworked simple games that exist everywhere. I think the type and quality of app can make all the difference not to mention good old fashioned advertising and marketing.
Bo, you wrote
“3. If you decide to go with ad support, do it from the very beginning. 4. Updating does not help much.”
Can you please elaborate? Are you saying that if you have gone ad-supported from day one-you would have more installations with ad-supported upgrades?
Thanks for sharing your data. Clearly, there is a sustainability problem for developers. We need more public dialogues to engage Apple, Google, Microsoft and Nokia to build a sustainable model for developers.
If we did ads from the very beginning, no other parameters changed, we would have made a lot of more money and my guess would be 3 times more ad $
Galaxy Impact went on sale on 10/27/2008 but the ad update was 11/21/2008.
1). the peak time to download is gone
2). only one thirds did updates
If you look at the chart, the green line is updates and blue line is new downloads, the updates did not help new downloads.
–Bo
http://www.iBokan.com
These numbers are very much in line with our calculations at Portable Hole. And if you do a little extrapolation, you will see that Apple is not making nearly the money on the App Store that analysts project (Piper Jaffrey’s $1.2B estimate for 2009, for instance). When Steve Jobs told the WSJ that they made $30M on the first 60M downloads, he was almost certainly referring to total revenue, not Apple’s 30% cut.
I would suggest letting the consumer choose. A free ap with ads, or a pay for ap with no ads. Also, changing things around like you have been is annoying for the consumer. First it’s free, then it’s not, then it’s free again with ads. At that point I would just say forget it and look for another ap. Decide which way you are going to go from the beginning, and stick to it
I agree, have a full paid version no ads, and a free full version with adds. Light versions do not work, and people are slowing down on spending money for apps that they may use for one day and then never use again.
The question becomes, are no ads enough to make a user pay for the app? Then of course, you have to take a long look at where you are putting the ads.
It seems like these app store stories are discussing new and novel territory. It’s not. It’s software on a device. Some make money, some do not. There is no story here.
This looks like the traditional curve for apps in the store. Depending on popularity, the curve is either more extreme or shallow. The publisher went with a paid model after the game’s life span had expired.
I’m guessing that most games and such don’t make much money. I’m also guessing that you would have recouped your dev costs if you went paid from the beginning. I’m a big fan of business models, and generating a return is part and parcel to running a business.
Frankly, I will be happy when the market is left to either people running as a business or very interested amateurs. Thinking you’re going to make big bucks with retreads is nutty.
Hey Nicholas,
You have a great point here. We need BD people here. I’d be very interested in talking to you more on this (offline if necessary). My email: bo.wang@BokanTech.com
Thanks in advance!
–Bo
http://www.iBokan.com
“With… absolutely no marketing… It’s hardly a sustainable business for most common app developers.”
Doesn’t this pretty much apply to any business venture? If you don’t put the effort in to let people know about your product, people aren’t going to to buy it.
Very interesting article, gives us all a perspective on how to release an iPhone app. It would be interesting to see the numbers if they were marketing the app. It seems as though people are slowing down with the amount of apps they buy.
In all honestly this is a really crap study. If my parents are anything to base something off of they are willing to pay for applications that aren’t remakes of games but rather original games that are “cool” or “different”.
If you provide something new and different to people and it works well people would be willing to pay for it.
Also this amount of data doesn’t really say much in my opinion. I think getting a bunch of the “top” apps data that goes paid vs. ad supported would be a much better way to examine this. Of course that would mean these top app makers in there respective categories paid vs. free would have to release data and such. A hassle at best.
For all app developers take this worth a grain of salt and do what would most likely work best with your said app.
http;//www.lostthetech.com
http://www.twitter.com/holdenpage
Does Admob working in Turkey?
Probably not. It does not work well in India but anyway, we have better thing to do, such as feed our goats and post silly comments on TC. I have spoken.
Anjali Sen
From India
Goats are always hungry.
Yes, we’ve a healthy presence in Turkey and will happily share insights with you. Please drop me an email with more information your activities in Turkey and I’ll see how we can help - contact me via nic@admob.com
It makes sense, and we will start to see apps that make their money through ads. But i think it is up to whether apple will allow it [danger of porn ads, etc.]
But i thing it will happen especially as apple expands its multi-carrier strategy http://technocitizen.tumblr.co.....r-strategy
well that change many things in head of anyone plans to build app or try to make money from.
great article. This is why I continue to come to techcrunch.
A really great and helpful post. Thanks Tech Crunch.
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This confirms that which many of us suspected.
Kudos for the transparency and let’s continue this discussion. There’s too many bright minds working on fart aps and it would be fantastic to have this energy angled at useful services and new ideas of a proprietary nature.
That said, I have access to dozens of Hollywood brands that would do GREAT on iPhone aps, if anyone wants to reach out to code em!
Hi Ben,
It’d be interesting to know more about your ideas. And you can check out what we’ve been doing on http://www.iBokan.com as well. Thanks
–Bo
this would prove to be a much more interesting reading without all the marketing hype.
I think, whilst this is very interesting, is fatally flawed.
You were top 20 free, so are readily available in Apple’s top 25 list. Free marketing!
You change to pay, and announce that as a result you now conclude that paid apps get 400 times less downloads than free ones.
What you’ve missed is that actually, the change that really happened is you are no longer in Apple’s top 25 list. If you’d held on for more time, and your app was truly great (I don’t know, I’ve not seen it), then you may well have increased in download rate and found yourself again at top 20 in the paid app list. Then you’d have been able to make a legitimate conclusion over what is better.
The evidence to support my theory is that whilst you are now free again, you’re only getting 1000 downloads a day. I’d conclude that’s because you’re not top 20 in the free app list.
From the results on this page, it seems like making money off an iphone app is easier said than done. Either those stories about kids making millions off iphone apps are lies or the niche you are targeting is just not a very good one.
Can someone enlighten me as to how easy or difficult it is to make money with an iphone app? If sales were butchered with a mere .99 charge, it sounds very hard to make some good money off an app.
Also I’m surprised the author gave so much info out in his screenshots =o
$175 dolar per month is good enough money for third world country however it will not be good money for U.S. based developer
Perhaps your game just sucks???
Have we learned nothing from Facebook?
Apple, Facebook, and Google all opening up there platform to get free content from developers, in order to attract new users with free stuff.
Google, Facebook, Yahoo, all need eye balls on their site in order to serve ads for advertisers. Apple on the other hand need consumers to continue to buy every version of the IPhone, and IPod.
What does the developer get? Other then angering their spouse and kids for neglecting them?
If these platforms fail to compensate the developers, the developers will abandon their efforts and go back to their day jobs, leaving only the top 10-100 or so apps running. These apps are not exactly “Hamlet”. Users, will and do get board with even top apps. Which will lead users to abandon facebook for the next social network just as they did with myspace for Facebook now.
In Apples case they will ditch their IPhones for the next shinny thing. Just as users are ditching Microsoft, for Apple, or they ditched Yahoo for Google.
If anyone of these guys want to maintain their success they will need to attract developers by compensating the developers in order to keep the flow of new interesting things coming.
In mean time, the “Gold Rush” of 2009 continues. Perhaps Apple, Facebook, Google, will get together in the next 10 years, and start a new University near Palo Alto as former California Governor Leland Stanford had after the Gold Rush of 1849 in 1876.
I’m sorry, but I have to call it like I see it — this is really bad advice. The developer botched a quite decent chance to make thousands of dollars a day in paid sales, and by following this advice, you’ll lose your chance too.
The primary problem - going out free without testing demand. There *was* significant demand for his product - it reached #19 on the US Top 100 Free list. Generally, if an application has significant demand for free, it’ll also have significant demand paid - perhaps a tenth as much. But this application developer has no idea how many applications he could have sold at $0.99 or an even higher price point, because he satisfied the bulk of the demand at a price point of $0.00.
Here’s what the developer should’ve done:
a) start high - at $2.99 or even more - to see if there’s significant sales (aka ‘get ranked on a Top 100 list’ sales) at that level;
b) drop the price to $1.99 and then $0.99 if necessary to see if the application can get ranked;
c) optionally, compliment the paid offering with a less-featured free offering (fewer levels, etc.) built to drive people aggressively to the paid version;
d) make the application free and ad-supported only *after* establishing through hard evidence that he couldn’t get significant exposure for the app at a higher price point.
The CPMs and fill rates from AdMob are representative (although a minority of applications do much better, AdMob’s marketing folk should share their histogram here.)
I *do* agree that the bulk of applications on the AppStore don’t recoup their development costs, if the developer’s putting a fair market value on his time. But the bulk of applications on the AppStore are launched completely wrong, like this one - the mobile equivalent of putting out a content site without doing any SEO.
Greg Yardley
Co-Founder, Pinch Media
Greg: Great comment. Thanks.
Well said.
I agree with you on every point.
Very much on the mark.
Greg,
Great suggestions!
I think you have data to back up the data I put in this post, even better (Galaxy Impact was ranked No 19 on Top Free Apps overall, instead of No 20 as I said)
It’s a great lesson learned for us at iBokan. It’s also very helpful to have a system to track and analyze those data, like you have in Pinch Media, which is why we’re developing such on in house and will release it to the public next month.
–Bo
http://www.iBokan.com
I can’t understand what’s with this one size fits all approach to marketing. Sometimes it makes sense to give away an app for free at first just to gain exposure. And, except for niche products, starting high and going low seems generally like very bad advice, since this greatly lowers your chances of making it into the top N lists.
As for why this app didn’t succeed as paid, that’s fairly obvious: there’s plenty of other breakout type games in the store, and several are free.
It is increasingly evident that making money from e-media content is a herculean task. Solutions are not easy… downright impossible for most development houses. One answer is to keep EVERYTHING on board, from the content creation to the ad sales. Giving up even the smallest piece of the pie may starve the company (I said it would be impossible for most small development houses). Additionally, you have to cross brand each and every entity and look for “out of the box” opportunities to gain revenues from unexpected streams.
Every new hire needs to be a utility player. No one should have just one talent or do just one task. The guy handling IT had better be a writer or a coder or something. The girl in HR needs to be good on camera, have great product ideas or be a kick-ass graphic designer… anything that can pump-up the workforce… and not the payroll.
If you happen to get it right, maybe there will be a time, somewhere over that hill, when you can relax and single task… don’t hold your breath. Not the world you want? Do something else.
It’s a multimedia universe from here on out and only multifaceted, multifunctional cogs can remain a part of the gears of e-media… if you want to make money anyway.
Keeping ad sales in-house isn’t easy for most companies, least of all independent bloggers or software developers.
Even TC can only generate 30% of its revenue from its in-house sales team/person.
http://www.techcrunch.com/2009.....-partners/
The two main issues are costs and reach.
However, you can make mitigate these problems by deploying a self-service ad sales / management system like Trafficspaces or Adify.
Great article - also I was sold on the idea until I just read through Greg’s response. This is a great how to for anyone considering iphone development. Having said that, we went free with something we new would never have any paid demand and we are doing well with admob - our earnings seem to be growing exponentially - although I’m sure that like Galaxy Impact, our downloads will eventually take a dive and the shelf life for the app will expire after 2-3 months…
I agree with your point that simply moving traditional push advertising method from old media to a new media would not work and it’s not working.
However, there are many examples of pull advertising, particularly paid search, that’s native to internet that’s not going to fail. Because it’s working better than other methods. It may not be perfect but it’s best that’s out there right now.
On your alternative methods monetazion, I was unable to see clear suggestions. Do you expect Facebook, MySpace to charge for participation? Or YouTube? Or do you think SecondLife will not be dead in a few years?
How does TripAdvisor make money? Not by facilitating a reasonable trusted environment for reviews. They make money by selling, actually pushing, advertisements within that environment.
Selling access to content would work only for certain type niches, particuarly those that are intended for businesses ot high-net worth consumers. A company like Stratfor.com can charge for access because they deliver but many other content sites that are geared towards consumers, will have depend on advertising and this model will continue to work.
And I do believe the current slow down in the internet advertising is caused by general recession.
This is an interesting article for sure. One app doesn’t make a case study, but more of a data point.
With Pinger Phone we tried ad supported only, with Text Free we have both ad supported and paid strategies going at the same time.
I do agree that switching from free to paid without any reason and when it was in a good rank was a poor decision, but then again earning nothing while getting tons of downloads isn’t great either!
Regards,
Brook
I think your conclusions are a bit premature… you only have TWO days of non-free downloads. Clearly this is not statistically significant. But those two days are both far better than even your best day of ad revenue. Would you have continued to get 20+ sales per day if you hadn’t gone back to the free model? You panicked too soon.
I agree with you as well. And like others have said the application should have been paid from the start, and then free (ad supported) if sales were almost nothing. In a consumer’s mind something that is free is worth exactly that — nothing.
It looks like there are two challenges for app store developers. The younger generation of tech and internet users don’t like paying for digital content at all, like music and movies. People are getting used to getting things for free. Look at the drop in sales over a $0.99 charge which is almost nothing. The second problem is that all the developers lowered the bar significantly by being so competitive and starting a price war. They collectively screwed themselves a bit. This might change over time it will be tough to start raising prices. Realistically they will have to overcome this with volume as iPhones sell more over the next couple of years.
I took a look in the appstore - the current #1 free title is another brick-breaker (”3d Brick Breaker”) and the paid version of the same game is the #9 paid title. So the “limited-features-free/full-features-paid” model is working right there. I also remember the story of the guy who created iShoot, which of itself is nothing fabulous, but he’s done quite well with it (http://www.iphonesavior.com/2009/01/iphone-developer-quits-day-job-after-ishoot-hits-number-one.html). He also followed the same “limited-features-free/full-features-paid” model. The idea of giving away a limited demo is a famliar approach in the PC world as well.
I checked out Galaxy Impact and 3d Brick Breaker and they’re on different planets as far as feature offerings and complexity. Galaxy Impact is a clone of brick games that were on the market 15 years ago. 3d Brick Breaker, although similar in concept, has taken it to whole new level. The game play of brick-breakers is little more than that of paddleball (http://www.officeplayground.com/paddleball.html?productid=paddleball). The new angle, pardon the pun, offered by the 3d aspect of 3d Brick Breaker sets it distinctly apart and the AppStore shoppers are responding positively by throwing down their money. I’m actually surprised that their marketing people let them call it a “brick breaker” knowing the long history and dry-white-toast flavor of that type of game.
I think this is a simple case of a weak product failing in the marketplace. Accordingly, I believe that the “Galaxy Impact Case Study” proves only one thing: the AppStore community doesn’t want to pay for Galaxy Impact and by extension that iBokan needs to hire some good game designers if they plan to make money from developing games.
Your point is well-taken, Fring!
I think Galaxy Impact is as simple as it could be but was much better than brick-breaking games at that time.
Galaxy Impact II: Ignite is much better in terms of images and sound effects and powerups, but it did not do as well as expected
I think it takes a huge jump in innovation, and developing cost, to create 3d Brick Breaker.
–Bo
http://www.iBokan.com
Great, but disturbing write up. Your story shows what’s wrong with the ad model. You delivered almost 800,000 CPC Impressions but only got $175 for that. By comparison a small local market flyer can get a couple of thousand dollars for 5,000 circulation. I feel like these ad networks and advertisers really take advantage of websites. Have you considered trying to go the flat rate route with advertisers? I know it’s easier said than done.
I would say, our ad-support strategy was also flawed. We only have one ad spot on one panel in Galaxy Impact. This mean, players only get one chance to view the ads when the game started.
We definitely should have one ad on every level of the game, just like others did. This might lead to much more ads revenue.
–Bo
http://www.iBokan.com
How about develop something people are willing to pay more then $1 for then run the numbers?
This is a great article, thank you TC and Bokan for posting it.
It would be great to have many more ‘case studies’ like this published on TC.
I agree, this is really a great post and good insight for developers
You cannot just convert a free application to a paid one overnight without adding anything and with *no* marketing and expect it to work. This comparison is almost rigged against the paid model
Take a look at this guy’s published numbers (the maker of iShoot) and how the app is being bought like crazy at $2.99:
http://twitter.com/EthanNicholas
(400K paid downloads)
It’s all about marketing when it comes to paid apps guys.
Yes I agree, Marketing is key if you are planning on selling your app.
Marketing is key when selling anything!
Interesting post. I have 10 Promo codes to giveaway for an App called MMS Buddy, would you pay $3.99 for this app? http://www.whichwebsite.com/20.....eaway.html
This is interesting. As a developer with two products making decent revenue on a consistent basis (almost 1 year now) my thoughts are the following. First the answer to the question the title of the post poses is: If you have respect for your users, you would never put ads in an iPhone app. It is a ridiculous notion in the first place, I believe most of this ad revenue is generated by accidental clicks, and Apple should ban ads in apps completely. Secondly, perhaps $.99 is not the right price, I have found that in some cases raising your price may APPEAR to lower your downloads, but over a long period of time, sales spike on certain days, and the average monthly revenue is actually higher.. Thirdly, there’s more to it then saying your downloads are 400:1. One paid download is one paid download. A free download is a customer lost. You can’t sell them something you just gave them for free.
This market needs to mature, and these questions will disappear.
Hi guys,
The best part of this article is the spirited discussion. I agree with previous authors that this isn’t really a case study.
Giving something away for free is not a test for demand or a valid way for finding the price a consumer is willing to pay for your product. And there wasn’t a valid A/B test performed to test any hypothesis. However, looking at the data and thinking about what it could mean is a great first step and I applaud the author for doing so.
As someone with 14 years marketing experience with five in video games (3 of which were in mobile gaming), I think a stronger go-to-market plan for this title would have been to ship a “lite” version simultaneously with a “paid” version, and design the “lite” version to upsell the free version. That is, give enough of the game away for a consumer to understand what they might get, if they buy the full version, then ask them to do so.
Flurry has insight into 3D Brick Breaker because Digital Chocolate is one of our customers. While I cannot discuss details of their performance, I can say that gathering data through an analytics package helps informs companies like DChoc figure out the best strategy for their company.
Regarding the right way to price it (from my personal point of view), it’s a toss up. I have seen top publishers go out with “introductory pricing” to first break into the top 50 and then start charging to take advantage of the strong merchandising position. I have also seen publishers come out at a higher price to see if early adopters will nibble, then slowly drop price over time. This is a classic pricing approach (”temporal price discrimination”).
Regarding drawing any conclusions about shipping this as an ad-supported or pay-per-download model (the original case study hypothesis), it seems clear to me that advertising loses out. In fact, the only thing that is actually tested here is the number of people willing to download this for free. It seems to me that if a company is unable to generate more than a few downloads per day to match the single digit dollar figures generated by this title, then the game is not hitting the mark in the market, and more work needs to be done on the product. This is also good information to have, as it helps a publisher think about what to do next.
Best regards,
Peter Farago
VP Marketing
Flurry Analytics
I have to admit this is our first iPhone app and we knew nothing on this. Here’s how Team iBokan got started (http://ibokan.com/2009/iphone-bokan/)
However, we’ve learned our lessons and done much better with “Cute Math”（http://ibokan.com/2009/about-cute-math/) and “Eye Test“ (http://ibokan.com/2009/testing-your-eyesight-handily/)
The graphics are created from our own tools that will be open to public in April. I hope you’ll check it out later.
Thanks a lot for your comments, which is really what I wanted for this post.
–Bo Wang
http://www.iBokan.com
Thanks for sharing this! I agree that charging caused your app to go invisible in the app store’s top free downloads and no one saw you. Also, I don’t think you can make the assumption that people aren’t willing to pay for something they can get for free. It’s the same thing with price changes. People have this notion that everyone saw your app and saw its price and now somehow are on the lookout for a sale or free (or vice versa). For so long Apple has had 50-100K new users come online daily between the iPhone and the Touch. There’s plenty of opportunity. If you are ranked, you are marketed through Apple and if you are not they are only your distributor where you are listed and sold. We had a similar experience with AdMob: very little money and it is intrusive for people mostly because the ads are not relevant. Google AdSense for Apps may be coming to the rescue soon!
When are iPhone spyware coming out?
If the cost to deliver is zero, “free” needs to be a significant component of the go-to-market strategy. The two best options are 1) free, lite version the upsells the paid version and 2) free, ad-supported.
People have to get over their objections to “free”.
Hi,
If TC (or someone else) could contact Ethan Nicholas (from iShoot and iShoot Lite: http://twitter.com/EthanNicholas ) in order to share his experience, we could have a second interesting “business case” to see how things works in the App Store environment, and, more important, to see what should be avoided in this market.
Ideally, a debate between Ethan and Bo Wang would be perfect
Put out a free Lite version with the intent to upsell to a paid version.
Thought I’d weigh in with another developer’s perspective: I released a Kids game, MASH ( http://appstore.magnateinteractive.com/mash/ ), as a paid app initially, and saw pretty modest sales for the first few weeks, about 30 to 40 per day. When I released a free version, MASH Lite, which saw many more downloads, around 2000 per day, the average sales of MASH jumped by around 100. I believe iShoot experimented with a similar method - admittedly, Ethan Nicholas sees many more sales conversions than I am, but I’d say the strategy is a fairly good one overall.
You made 10,000+ downloads a day because you were on the ‘Top Free Apps’ list, giving you great visibility. By switching to ‘paid’, you disappeared from the ‘Top Free Apps’ list, while not having enough sales to make the ‘Top Paid Apps’ list, rendering your application more or less invisible. That is the reason for the drastic drop.
Exactly. That was WRONG decision.
Gets away from a direct example, but a good one regarding people being rabid for free. In a nutshell, an experiment where people could buy Godiva chocolate at a staggering discount, something like 90%, or buy Hershey’s Kisses for a penny each. Sho nuff, people glommed up the Godiva, all but ignored the Kisses. When they switched it so the Kisses were free, sales of Godiva–at the same staggering discount–went through the floor.
Again, a different comparison, but I’ve long thought cable TV succeeded because they charged for it from the git-go, might well have cratered if people were teased with free ESPN, etc., for a while and then charged for it.
We will be releasing a brick-breaker variant very soon, but like 3D Brick Breaker it brings a lot to the table in terms of alternative gameplay. Our initial price point will be $1.99, along with a lite version.
Our lite version features admob ads, which we will utilize for ad exchange.
Will be interested to see how this one does compared to Galaxy - and whether it disproves all the comments about not having an completely original game. We will share our data as well, if you are interested in the results let me know.
Rob
- http://www.radial50.com