Kindle Review – Kindle Fire Review, Kindle 4 Review

The Kindle Store is scary and exiting and full of possibilities and full of danger.

1. Will the Kindle Store make it possible for writers to make a comfortable living?
2. Will the competition drag prices to unsustainable lows?
3. Are Publishers justified in being worried to death and calling the Justice Department over $9.99?

Well, the iPhone App Store is a good example of a low barrier to entry, very competitive marketplace. Perhaps it has a few lessons.

iPhone App Success Stories and the Stories behind them

Had an idea for an App (big surprise) and this was the research (some of it is from interviews at Pocket Gamer) - 

Geared  

The Success Story – $276K in 47 days. Bryan Mitchell (the creator) gets $193K.

A graph -

The Story behind it -

1. Paid Ads at Touch Arcade and Something Awful. Led to a What’s Hot listing in the App Store. 
2. Feels Reviews on top websites like TouchArcade and SlideToPlay are key to spreading the word.  
3. Spent almost as much time working on the Geared Update as on the original application. 
4. Advises mimimizing risks in development and making small games.
5. Feels luck element is very large.

Field Runners

The Success Story – 1.6 million sales at $3 each.

The Story Behind It -

1. SubAtomic Software founders had experience making real-time strategy games at Stainless Steel Studios – the company that makes the Empire Earth series of games.
2. There is no mention of actual timelines – However, they spent 6 months translating from 3D into 2D.  
3. They hired an Industry Music Designer. 
4. They talk about the expectation that there will be updates and supporting a title long after it is released.  

Rolando

The Success Story – One of the best-selling iPhone games ever. Voted Best iPhone Game of 1998.

The Story behind it -

1. 4-5 months of experimentation and prototyping Mar to July 2008.
2. Part time Mar to Aug/Sept and full-time Sept to December (when it launched).
3. Worked with a graphics guy and with game publisher ngmoco.
4. New Version in Mar 16, 2009 with 5 secret levels. Newer version on April 21st with 2 more levels.

Pocket God

The Success Story – Sold over a million units (1.2 million).

The Story behind it -

1. Initial game in a week and then 1st 10 updates 2 days or so, and then now each update takes a week. 
2. 23 updates so far. 
3. Long history of programming experience – The developer had worked on Clay Fighter (an old, excellent fighting game). 
4. Mar 2009 – #1 in App Store with 13,600 apps sold a day.  
5. In-App Transactions accounted for 27% of new revenue after in-add purchases were added by Apple.

iShoot

Success Story – $800K in 5 months.

The Story behind the Story -

1. Hit #1 in the App Store and made $600K in a single month.
2. 6 weeks to code the app. 4-6 hrs a day.
3. $800K in 5 months. So the first month is big.
4. iShoot released October.
5. Then iShoot Lite released January.
6. Lite downloaded 2.4 million times -> 320K people bought iShoot Full Version. 

What Lessons does the App Store have for us?

These are the lessons successful app store developers are sharing –  

1. iPhone App Store is a business like any other. You have to work hard.
2. Yes, developers and companies are making a ton of money in the App Store. The Top 20 Paid Apps are probably making $10K a day (or more).
3. The amount of competition is brutal.
4. There is a very real race to $1. Now, in-app purchasing will put even more pressure on prices.
5. A lot of very big companies are making Apps.  
6. Apple makes things very easy for app makers. Contrary to what they might think. Apple handles everything i.e. distribution, going international, and so on.

Here are my takeaways illustrated with numbers (also from Video Game Chartz) -

Pricing is Brutal

1. Average of Top 10 apps is $1.75. 47 of the top 100 paid apps are at $1.  
2. Without brand name recognition you have to go at $1 or $2. Only big Publishers are finding success with higher priced apps – GameLoft with 13 Apps in the Top 100 priced at an average of $4.76 is an example. As is Electronic Arts with 12 apps at an average of $5.49. 
3. In-App Purchases means even more people will put out free and $1 apps hoping to make money on in-app purchases.

Competition is Brutal

1. The Big Publishers in the Top 100 account for 34 titles and nearly all of the higher priced games. 
2. There are also lots of smaller publishers, like Pangea, that are pretty hard competition.
3. A marketing budget is pretty important.  

Most App Store success stories leave out details like these -

1. The company behind Tap Tap Revenge, Tapulous, was co-founded by a developer who helped launch Firefox and was the CEO of Flock, and someone from McKinsey & Co. 
2. The company behind Skee-Ball, Freeverse, is a full-fledged Mac Software company that won an Apple Design Award in 2004.
3. Pangea have been developing for Mac for over a decade. No newspaper story will mention that – only that Pangea will make $5 million this year.
4. RedLaser maker Occipital had TechStars funding and a PhD background. Do read their impressive ran out of money and almost did not make it story.

Going through a list of App Store success stories is like reading Outliers by Malcolm Gladwell. Most of the huge successes are companies and developers who have honed their skills over a decade or more.

Success is Often Fleeting, You have to Keep Updating

Not only are you competing with 80,000 plus apps, you are competing with new apps.

1. A lot of success stories describe the highs i.e. iShoot and its $600K in a single month. They leave out that it made $800K in 5 months and that the highs do not last.  
2. There is a very real sense of – Keep updating the App to keep customers happy and to keep selling.
3. Lots of developers talk about how updates are ongoing and take up a ton of time (Geared and Pocket God updates, for example).

Those who Find and Sustain Success, earn Huge Rewards

If you create a great app, market it well, price it intelligently, get to the top charts, and update your app regularly – you will find a lot of success.

You seem to need luck too – though what Bryan Mitchell of Geared talks about and the fact that a company like EA has 12 of the Top 100 Paid Apps means that Luck might be over-rated.

The iPhone App Store seems to be just like any other business -

1. The very good businesses (top 1%) in any niche find a ton of success. The next 4-9% do OK, and everyone else does terribly.
2. The Press fixate on the 1% and make it seem as if your 14-year-old brother could make a million a month – all he has to do is write an app.

It is a Huge Opportunity – Zero Barrier to Entry

The biggest plus might be that there is no barrier to entry.

Apple handles everything for you – selling in multiple countries, currency exchange, distribution, everything.

It’s just giving you this huge captive audience of tens of millions of iPhone owners.

The Million Dollar Apps – What The Press Fixates On

This is the tip of the iceberg – literally and figuratively. This is all the press shows you while avoiding the 78,000 apps that failed.

BusinessWeek List of Million Dollar Apps.

Douglas MacMillan at Business Week has a list of apps that have hit it big -

1. Engimo by Pangea. Sales of $2.5 million.
2. FAST by SGN Sales of $1.8 million.
3. Ocarina by Smule – Sales of $1.3 million
4. I am TPain by Smule. Sales of $1.1 million.
5. Roller Coaster Rush by Digital Chocolate $1.1 million.
6. Flick Fishing by Freeverse. $1 million.
7. Ragdoll Blaster by Backflip Studios. $950,000.

These are sales and Apple gets 30% of these. They also do not account for marketing (if any) and development costs.

Video Game Chartz List of BestSelling Apps Ever

It’s from some analyst firm (via Video Game Chartz) and based on total unit sales (not revenue) -

1. Tap Tap Revenge Classic – 4 million at $1. For some part of its lifetime it was perhaps Free.
2. Fieldrunners from SubAtomic Software – 1.6 million at $3 (That’s $4.8 million, if accurate). Do Not download this game – it makes time disappear.
3. Flight Control – $1.38 million at $0.99.
4. Touchgrind - 990K at $5.
5. Zombieville USA – 960K at $2.
6. iShoot – 843K at $1.99. This is one of the favorite App Store Millionaires story.
7. Super Monkey Ball – 749K at $6.
8. Hero of Sparta – 747K at $1.
9. Enigmo from Pangea – 686K at $3.
10. TheSims 3 from Electronic Arts – 669K at $10.

Note that some of these apps have been at various prices during their lifetime. So the list is mostly useful as unit sales. Interestingly this estimate matches the Engimo revenue figures from the BusinessWeek article.

What could this mean for the Kindle Store, Authors and Publishers?

 To be quite frank it means some rather amazing and some rather painful things -

1. No barrier to Publishing.
2. Publishers, especially big publishers, will have an advantage over Independent Authors. 
3. Things will be tougher for everyone.
4. The race to the bottom is inevitable.  
5. Middle-men will get weeded out. There is no long-term solution that has a place for distributors and retailers. Regardless of whether Apple wins or Amazon or even Google, the middle-men will get cut out.  
6. Book Review Sites, Book Social Networks and Blogs will become very important.  

It will still be a business – you will still have to write a great book, market it well, price it right, treat customers well, build and maintain relationships.

There will also be an element of luck – However, that is not something you can control.  

Perhaps the single biggest takeaway -

1. Get in Now while the Kindle Store is still beginning to take over Publishing.

Every app store maker has talked about the importance of building a brand and getting in early and the fact that in-app purchases are huge. All of that applies to reading – The Kindle Store lets you build up a brand at a very low cost. As more and more people realize this it will become tougher and tougher. Now is the time.

Filed under: apple ibook reader, thoughts Tagged: | iphone app success, top iphone app