Category Archives: iPhone

For those that haven’t heard the term before freemium is a business model becoming popular in mobile apps, though it is also used extensively in web services.  The idea is that you give away the product or service for free and then charge for the extra things.  Dropbox is an example, you can sign up for free but if you want more space and a few extra features you can pay to upgrade your account.  I think it is a superior business model.

For UFO Invader I started the game as a paid app for $0.99.  With that low price I was only making one sale every other day.  Over the course of that first month it made just 32 sales, including sales to friends and family.  That simply wasn’t good enough for me so I decided to test a freemium model.

I added a few things to the game that could be bought in the game through in app purchases at various price points and released the update, while dropping the price to free.  The change to the number of installs was dramatic (5 paid apps one week up to 3500 free apps installed the next) and it wasn’t long before some of these new players were buying things in the game.  The same week I switched to freemium I made roughly 5x the revenue from the previous week.

Enough time has passed now that I can start to compare numbers:

  • During 8 weeks as a paid app it made 50 sales @ $0.99 price tier
  • During 8 weeks as a freemium app there has been 43 transactions at various price points
    • 27 @ $0.99 price tier
    • 14 @ $3.99 price tier
    • 2 @ $39.99 price tier
  • 50 paid installs vs. 5200 free installs in 8 weeks
  • Ignoring currency differences, roughly $50 in revenue as a paid app, vs $163 as a freemium app

Even for a game like UFO Invader that was my first attempt at an iPhone game and which has never made it up into the top 100 freemium has proven to be significantly better way to get paid for the weeks of work that went into it. Going freemium more than tripled my revenue directly, and increased my installed base by 100x.  The value of that installed base cannot be underestimated since several thousand players opted in for push notifications which I will use to help launch my next game.

My advice to App developers is to try freemium if it can work with your app.  It’s a bit more work to add IAP, but in my case it proved to be worthwhile for me, and beneficial to the thousands of people who got to play for free and otherwise never would have bought it.  Obviously this is just one case study, different things may happen in other apps, but I think it’s worth testing.

As a way to help encourage me to learn how to use Inkscape to draw vector art I set myself a challenge over this past weekend to re-skin an iPhone/iPad game.  I wanted to completely finish it and submit it to Apple.  Which I did manage to accomplish.

The result was Whack A Turkey.  A very simple game which is finished and currently waiting for approval into the App Store.

I must say that using Inkscape was surprisingly easy especially after reading through the tutorials that inspired this endevour.  2D Game Art For Programmers over at Gamasutra.

The very first lesson I have learned about making profitable iPhone Apps is that the most effective monetization strategy is to have a free app with in app purchases.  I have very little problem spending $0.99 for a game on the App Store, but I have found that there are many people out there that don’t have credit cards attached to their iTunes account or simply won’t buy things.  The free app gets past this initial barrier and also opens you up to additional people who can play with your app and act as word of mouth promotion.

For in app purchases a lot of thought needs to be put towards how best to price things.  Choosing the most effective price points and providing a range of options so that people can buy the things they find the most value in is crucial and non-trivial.  But one key thing to keep in mind is to make it really easy to spend $1 and possible to spend $100/month.

The value of money is a strange thing.  To me spending $100/month on a iPhone game is crazy, but to others $100 is only 10 minutes worth of work.  Perspective is everything.  In a world with an increasing gap between rich and poor it is important to give rich people ways to spend more of their money – selling digital goods with zero marginal cost is a pretty good strategy for that.

Looking forward I don’t think I will consider doing an app that doesn’t have the opportunity to make full use of in-app-purchases.  I’ll share my actual numbers at the end of the month.

After getting UFO Invader published there were a couple of things that became obvious points of improvement from a marketing perspective.

Web sites have the advantage that you can count on having internet access when visiting a website so it’s easy to tie things in dynamically all over the  place.  Things such as Adsense ads are loaded and managed by other people using other services.  they change depending on who you are, what the page is like, and what time of day it is.

With a turn around time for publishing native apps to the iPhone being more than a few days – having anything from news messages, advertisements or dynamic content becomes a bit more complex.  You can’t simply push an app update out to update a message to say you’re working on a big update for example.  You also can’t count on internet access being available.

The idea for the iPhone App Control backend is to pair a web admin service with a library of Objective-C UIKit components.  An API call would be made out to the service to get marketing messages, news or alerts text or whatever else and it would also serve as a bit of an analytics service, tracking clicks on ads, and perhaps performing A/B split tests on offers.

Once built, this software will help control all of my current and future iOS Apps.

Will I release this software?  I’m not sure.  What do you think?  should I sell it? open-source it?  sell accounts and access?  Let me know your thoughts…

After the initial release of UFO Invader there was one thing that I found extremely frustrating.  Lack of information about how many people were using the game, how often they were playing, and what areas of the menus were being accessed.  I was left to guess based on download numbers, ad impressions and the number and quality of reviews how it was doing.

Real data on app usage allows you to make design decisions based on what people are actually doing rather than what a few loud people say they want.

Doing a bit of digging yesterday I found out that there is a Google Analytics SDK for iPhone apps.  It allows you to track exactly what users are doing when they’re in your app and then you can easily comb through the data in Google Analytics.

Google Analytics gives you tons of ways to slice and dice the information.  But there’s a catch.

Analytics is designed for websites. Within a native application some of the concepts need to be twisted a bit to make sense, others won’t work.  It’s also a bit different in that you have to manually trigger all events in the code it’s not as simple as adding a bit of javascript to a WordPress theme.

However, it only takes an hour or so to get everything set up in your app to use Google Analytics.  The insight it gives into how people are using your apps and what they do with them could easily be worth 10x the effort.

Update: After playing with a bunch of different analytics options,  Google Analytics seems like the worst of the options (the library takes up a massive 1MB in your app, and it is kind of awkward to code)  I have opted to switch over to using Localytics

Since launching UFO Invader in early August I have been hard at work with a MAJOR update to the game which will add in all the features that I never had time to implement for the first release.

This is totally changing the game.

I have added a store and a currency system to the game with a couple of novel ideas that I think will be interesting to gauge the response on. Users will be able to upgrade their ship, with various weapons, power ups and just like the old arcade games there will be a pay to continue option.

One thing that I have been interested in trying to tackle is adding features that give the game more replay value. Some of the things that will be implemented are:

  • different gameplay modes
  • progressively get harder to make beating your personal score more of a challenge
  • prominently displaying friend’s and global top scores for incentive
  • new levels, graphics, power ups and upgrades to change gameplay options and add variability
There was a very long list of things on the TODO list to get this done.  A lot of effort was put into getting the iPad version working which was actually a lot more time consuming than expected.  A result of doing the iPad version is that the entire menu system was overhauled with new graphics. It looks 10x better.
I’m excited to get this out there.  It should be in the store sometime  in the first week of September.

In my last post I wrote about some strange numbers that I was seeing in my app that I just had to investigate.

But first just some background information. My first iPhone Game (UFO Invader) was released just one week ago as a  $0.99 paid app.  It’s also a bit of an experiment so I included an ad at the bottom of the the menu screens as an extra way to make some money.  With the App I can see the sales in my reports from Apple and I can see my ad impressions and clicks in reports from AdMob.

On Tuesday, things started to get a bit wacky.

I noticed my ad impressions (and clicks) spiking massively.  However there wasn’t a corresponding increase in sales to account for it.  Either something was not counting properly or I was missing something.  This was a big discrepancy on the order of 1000x what I would have been expecting for the day.

After looking at the numbers it became obvious that more people were playing the game than had bought it. A lot more.

At this point with limited publicity and 4 days after launching the game I had registered 30 sales.  But there were over 200 ad clicks and over 1200 ad impressions (1000 in one day).  There were 400+ different users with top scores registered in Game Center.

A Google search revealed what I suspected.  A handful of forums and automated blogs were linking to cracked versions of my game.  (I won’t link to them because I don’t want to give them any SEO Juice)

I wasn’t sure how to feel about this.  On the one hand as a small one man developer shop getting my game into the hands of 1000 kids is awesome exposure and it might help drive sales.  The other hand I’ll explain in a bit.

First, here’s a couple of graphs showing my sales and ad revenue for the first week on the App Store.

You’ll notice there were negligible ad impressions until the 9th.  The 30 people who bought the game at that point were registering 5-10 ad impressions per day.  It very quickly spiked up to 1000 per day.  This correlated with an increase in ad revenue.  Unfortunately there has not been any positive effect on sales (yet) as a result of being pirated.

There were some other numbers that caught my attention as someone who is familiar with both side of the advertising fence – advertiser and publisher.  I had run a test ad campaign to see if I could profitably make sales by advertising my game.  Unfortunately only 1% of clicks converted into buyers, and even at a very cheap $0.03/click it wasn’t possible to run advertisements at a profit.  That sucks.  If it were possible to profitably advertise then my money worries would be over.  Alas.

The advertising that I did run on AdMob reported about a 0.5% CTR.  The ads that my game was serving was reporting a 18% CTR.

To me, 18% CTR is clearly evidence of click fraud.  Nobody clicks ads that much.

What was going on?  Well it seems that people who download cracked copies of the game are clicking ads in order to “help” me, the developer, make some money.  Unfortunately click fraud has the opposite effect.  It reduces the value of those clicks below the minimum bid allowed for everybody.  Meaning that I and every other indie game developer cannot effectively use mobile advertising to find customers.

Here’s a concrete example with my numbers:

$10 in advertising buys 334 clicks at $0.03/click.  My cut on a $0.99 game is $0.70 which means I need to make 10/0.7 = 14.3 sales on average for every $10 worth of ads or a 4.3% conversion on clicks in order to break even on the advertising.

4.3% for a $0.99 impulse purchase should be EASY.  Without knowing any better I would expect to see closer to 10-20% for something like this.

Unfortunately it is impossible to know what percentage of the ads I paid for were actually fraudulent but based on experience running ad campaigns for the last 4 years on the web it seems like mobile ads are terrible and my best guess is that AT LEAST 75% of clicks were fraudulent.

I was seeing a 1% conversion, but removing the fraudulent clicks might have bumped it up into the realm of profitability.

This level of fraud creates a huge problem for developers.

  1. The value of a click is so low that using ads to make money doesn’t work. (My stats show a click pays just 2.8 cents)
  2. All the Advertisers who have good things to sell won’t buy ads because they’re paying too much for fraudulent clicks.
  3. Developers can’t profitably advertise their Apps with mobile advertising
  4. The high volume of clicks that I saw with my Game could potentially get it flagged, accounts locked, money taken back, and prevent any money being made now or in the future from advertising.

To those people who download cracked iPhone apps and want to help the developer here’s the best thing to do:

  1. Don’t click any ads unless you are actually interested in what they’re advertising. Ever.
  2. Tell your friends to check out any cools apps you find.

You know I’m cool with people pirating my game.  They wouldn’t have bought it anyway.  And with the right bits of marketing in place I could still communicate with them, promote future apps, sell in-app-purchases to them and ask them to tell their friends about my games.  But destroying the advertising ecosystem makes my job more difficult.  It eliminates what would be the simplest way for me to promote my game to people who might actually buy it.

What are my options as a game developer to deal with this?

  1. Release free to play games and be more creative about monetizing them.
  2. Ignore pirates and forget about trying mobile advertising to advertise.
  3. Ensure you have ways to communicate with users through push notifications, email, or in-game messages.

Unfortunately, There’s pretty much nothing that can be done to thwart hackers.  If they want to crack software bad enough there’s always a way to do it.  What sucks most of all is that the click fraud puts me at risk of losing a lot of money if my account gets flagged.

But this is also very early on and it will be interesting to see how things change over the next few months.

I’m still doing a lot of testing around how this iPhone Apps stuff works but yesterday I ran an experiment to see if mobile advertising would help boost sales of my game.

The results were very odd.

Firstly, I have been running various ad supported websites for about 8 years now so I’m pretty confident about how the revenue has been working for websites using Adsense.  I have also run quite a few AdWords campaigns so I’m familiar with how much that traffic usually costs.

Very quickly after launching an ad campaign on AdMob I blew through the $10 test budget at $0.03/click which netted 334 clicks with a click through rate of about 0.5%.  That’s pretty cheap traffic in comparison to my experience with AdWords which are often 10x to 100x more expensive.

Immediately following the campaign I could see that more people were playing the game.  More people had scores show up in the leader board, and I was seeing ad impressions from the in-app ads.  Ad impressions spiked roughly 20x compared to previous days so I was expecting to see significant sales.

Then I started seeing revenue come in from the ads.  It was shocking that every time I refreshed the page there would be a few more cents of revenue.  People seemed to be clicking the ads at roughly 20% CTR.  As of right now I can see four times more ad clicks than people who have bought the game!

Today, if the trend continues I expect my ad impressions and revenue from AdMob to exceed what I make with AdSense across all my websites combined!  This is crazy.  In the last week I have sold 30 copies of the game.  I can attribute 7 of those sales to the ad campaign I ran.  Before running the ad campaign I had 5 days of zero ad clicks and an average of roughly 10 ad impressions per day.  in the 24 hours following the ad campaign I saw ad impressions spike to nearly 1000 with 175 clicks.

Something doesn’t seem right.  These numbers are wacky compared to what I’m used to seeing with ad revenue.

Update: Found out that a hacked version of my game was uploaded to a forum at roughly the same time I started the ad campaign.  That explains it.

There are many ways that you can make money with an app on the App Store.  One of the lesser used ways is through affiliate sales.

Apple has an affiliate program that runs through LinkShare.com which pays out 5% on iOS Apps, Music, iBooks and even the Mac App Store software.  It’s free to sign up for LinkShare.com and takes just a couple days to be approved to promote App Store products.

Once signed up you can start creating links using the Apple Link Maker which will deliver a user directly to the App Store if they click the link from their iOS device.  It puts users in a position where one click and a password is all that’s needed to make a purchase – and for you to get a 5% commission.

It was an important part of my longer term App strategy to bake this into everything that I ship for two reasons.  I can share some of my favorite games with people for a few extra bucks in my pocket and going forward I can swap out swap out other people’s games for my own and use the same code to help promote my other products.

The code that I wrote for this feature I have made freely available for you to integrate into your iPhone App.  I would love to start seeing more indie developers finding new and different ways to monetize their apps.  Every little bit helps, especially when it’s a small shop.

It gives you a screen that looks like this:

 

Clicking on one of the links brings you right into the iTunes store to read more about the app.  The About tab is there just for information about the current app and back will dismiss this screen and put it back into the game.  It’s very basic code and should be relatively easy to understand and use.

To use this in your own iPhone App check out the project on gitub.

UFO Invader – my first iPhone game is now available for sale in the App Store. It actually took much less time than I expected to get it through the review process. There were no real issues that were found, no hang ups or concerns.

The actual submission process is fairly complex and took me a few hours to get through because I had to read all the documentation. It requires creating a bunch of signing certificates building an “archive” and then checking and submitting the binary using Xcode. It was super confusing at first because the documentation on iTunes Connect refers to Xcode 3.2 but everything is moved around and changed in Xcode 4. After I found the documentation within Xcode I was able to make progress.

It took 72 hours from the time I uploaded it until it was available in the App Store. That’s not bad at all. And much less time than I expected after reading the threads on stack overflow. Current review times are actually estimated on http://developer.apple.com/news/ and are showing that 94% are getting reviewed within 7 days.

If you’re interesting in checking out the game: