How an app with 200,000 downloads led to developer homelessness

The app was released <i>seven</i> days ago. I'd say 200,000 * 0.67% * $2.99 ($4,000-ish) is a nice first week for an indie game. Now I guess I know how I can get Penny Arcade to feature my next app.<p><a href="http://appshopper.com/games/gasketball" rel="nofollow">http://appshopper.com/games/gasketball</a><p><a href="http://www.appannie.com/app/ios/gasketball/ranking/history/#store_id=143441&#38;view=grossing-ranks" rel="nofollow">http://www.appannie.com/app/ios/gasketball/ranking/history/#...</a>

Such a confused and poorly written article. The developers aren't homeless because they had 200,000 downloads... They're homeless despite 200,000 downloads because they're game developers and not salespeople and so didn't even consider that they have to actually make the sale! Apple and Google and Amazon provide the big parking lot where people show up and have money in-hand, but if you give away the goods and never ask for the money, of course you'll end up broke. I'm glad to see that the developers have taken some steps to change the situation, but from what can be gleaned from the article, it sounds like they're not really handling the situation well.

So many things wrong with this article and devs I don't know where to start.<p>1. Contract work sucks. You know what sucks worse? Being homeless. Do some work, get paid, save some runway, then get back to your game.<p>2. Man I'm having trouble making money on this thing I'm giving away for free. No kidding? If your app is free you should be making it really really obvious that there is more to be paid for that is really awesome, and then maybe have a button somewhere that actually allows your customers to give you money.<p>3. Don't spend 2 years on an app with an ARPU of a couple of pennies. The mobile app market moves really fast and you can't expect the revenue from this game to last you for the next 2 years unless it is a huge hit.<p>4. This app has been out for a week. This linkbait title is a joke. 200k downloads for a free app isn't that amazing, but it's not bad for a week. Even if it had 10 million downloads, they'd still be homeless as they won't be getting a check from Apple for this until October. Their stupid decisions over the past 2 years led to them being homeless. The success or failure of their launch week has nothing to do with it.<p>Clicking to the article I assumed this was going to be a case of giving away something and server costs bringing them down. Nope. We just decided to not have jobs for 2 years, not do any contracting, and not having enough money saved ahead of time.

While this is a sad story, I'm finding it hard to feel sorry for them. This is a prime example of excellent execution but poor marketing.<p>First, I've never heard of this game an it looks pretty awesome. My wife and I loved The Incredible Machine and this seems like a great derivation on that.<p>Second, it's iPad only so you are missing out on a ton of iPhone sales. I've bought stuff on my iPhone which I didn't on my iPad. It would be great if it sync'd between the two.<p>Third, .67%?! You've made some poor design choices if you can't get more people to upgrade that that. Sounds like you gave away the buffet and not just a taste test.<p>From the article author: <i>I had downloaded the game based on the positive word of mouth, and had already enjoyed what felt like a wide amount of content without paying anything.</i> <i>I wasn’t even aware there was anything to pay for to unlock ...</i> <i>I learned I could buy the game .. I went looking for that option .. took me a few minutes to figure out how to pay ... </i><p>This plug on Penny Arcade should give them a significant bump in revenue. Tycho and Gabe could talk up toilet bowl cleaner and the PA audience would go out and buy it in an instant.

<i>"It makes me sick to my stomach as it so transparently preys on the weaknesses like addiction and compulsion."</i><p>You know what makes me sick to the stomach? Developers starving themselves to death because of a complete disregard to basic business sense and a misguided sense of righteousness.<p>5 easy steps to homelessness:<p>1. Spend years building products for a platform, where $1.99 is a high price.<p>2. Avoid doing even the most basic mental arithmetic to figure out how many units you need to sell at $1.99 to be able to pay rent.<p>3. Then set the price to zero, because <i>you're a nice guy</i>.<p>4. Sell in-app purchases for the super duper high price of $2.99, thus raising your customer's LTV to a magnificent $2.99. But, don't be an asshole. Ask for the upgrade politely and quietly, in the third screen of the settings. Remember, you don't work for $ZNGA!<p>5. Make it up in volume<p><i>"We really want to stick to the ‘free and pay 2.99 to unlock’ model, but if only .5% of users buy our game, we’re going to have to figure something else out. It’s very malleable at this point. Perhaps we’re giving too much away for free, it’s really hard to say until we see more data.”</i><p>6. Look a bonus step no.6! If after following steps 1-5 you're still not quite homeless, then it's time for some more data collection. Spend another year or so A/B testing the gradients of your upgrade button. And oh maybe, your upgrade price is too high? Yeah, test that.<p>Excuse me while I relieve myself of the agony of watching people do this over and over again.<p>AAAAAAAAAARGHH!!! FOR FUCK'S SAKE, STOP IT!!!!!<p>Why do developers worship Apple, but absolutely refuse to take the slightest hint from them on how to do business?<p>Read this - <a href="http://www.joelonsoftware.com/articles/StrategyLetterV.html" rel="nofollow">http://www.joelonsoftware.com/articles/StrategyLetterV.html</a><p>And repeat after me:<p>"Commoditize your complements."<p>"Commoditize your complements."<p>The app store is the most brilliant and brutal execution of this strategy. Apple is selling $500 <i>phones</i> - the most expensive phones - while simultaneously making developers fall over each other and well, go homeless, to make software for their platform to give away for free.<p>As if that's not tragic enough, the celebration of the lottery winners has the public and developers believe that making apps is a great business to be in!<p>patio11 has been trying to drill these things into people's heads for ages. But, all he seems to get is upvotes and not enough people <i>getting his point</i>.<p>You don't have to suddenly go all Zynga on your users. There's a vast chasm between selling virtual sheep to addicted grandmas and giving away the farm for less than the price of a toilet roll. You can charge a good price, which does not depend on huge scale to pay the rent.<p>Edited to add: Lest I sound like some smug business know-it-all on a high horse, I've made the same mistakes. Most of us are like this. We need to make a conscious effort to be good at business.

Sounds like they wanted to get the sales figures of the addictive IAP-dependent top-selling games, but without any of the actual psychology behind it. Doesn't work like that. The reason those other games were in the top 25 weren't just because they had IAPs - nearly every mobile game has IAPs nowadays, whether they're initially free or not. It was because they struck the "right" balance between entertaining and manipulative.<p>In particular, most of the games/apps I've tried that use that "upgrade from free via in-app purchase" model make it <i>annoyingly</i> easy to upgrade. They remind you when you finish a level. They remind you when you start the app, and when you go back to the main menu. They have buttons for full-version features that just pop up a "Sorry, you need to upgrade to do that, click here to do so!" dialog. They beat you over the head with the idea of upgrading until you submit, and going by the sales figures, it seems to work. That's how they make conversions, and if you're going to leave that out you're probably better off pursuing a different style of monetization.

I'm seriously sick with people complaining that the software they gave away for free didn't make them any money. Maybe we need a better business model for people who make other people's life better, but hey, at the point you make the decision to give away stuff for free, please don't complain.<p>DISCLAIMER: I'm making Open Source software and I can (sometimes) make a living out of it. I'm trying not to complain too much though

1) Don't spend two years working on your iPad game before you ship it. Far too long a cycle.<p>2) As an indie dev, you're suppose to attack the easiest, lowest hanging fruit to build your income base. After you're past a point, you can take on ambitious long-term projects. Otherwise you are always depending on a "hit" title.

It sounds like a major reason they've had such terrible conversion rates to the paid version is that nobody could figure out how to actually buy the game.<p>Remember: When people want to give you money, make it as easy as possible.<p>Hopefully they get some better conversion after their update: "There was an update available for the game, and after applying it, an “unlock the full game” message was added under the main logo."

I'm currently building a game company so I sympathize with these guys, but it sounds like most of this is self inflicted.<p>1. Development cycle is way too long. You have to move much faster in mobile, especially for a casual game.<p>2. Assume financial failure for each game. Doesn't sound very encouraging but you should never count on income from a new title, especially if you're trying out new ways of monetizing.<p>3. Keep a cushion. If you need to take some time off to contract then do it. Running out of cash isn't an option.<p>4. Don't leave customer acquisition to chance. It sounds like their customer acquisition strategy was based solely on app store visibility (and hope).

I'm going to be honest here, I look at IAP games as spam. I don't care how much time you game took or how well it's designed, as soon as I see that I must buy coins/points to upgrade weapons, levels etc, the little 10 year old nes kid in me dies a little.<p>Everybody is so worry about monetization and get rich that they forgot the fundamental rule on a game: Let it be fun and enjoyable, let it be immersive.<p>How would you feel when you were young playing atari, nes, etc and something kept asking for your parents money to continue to play the game ?<p>TBH I rather play 5-7 dollars straight away for a game that includes everything then 0.90 cents where everything is locked up.<p>If DLC's are getting ridiculous on consoles, IAP is the apple store game cancer. It should go away.

I personally am pretty turned off to in app purchases. Most games are only getting worse. I cannot count the number of times that I have been approached by my 5 year old asking for me to "type in my name so I can have _______" while playing angry birds, jetpack joyride, or where's my water.<p>The problem is that he doesn't realize that there is real money tied to that. To him, I just enter my iTunes password and the level/swag/etc that he wants magically appears. Most of these games are geared towards kids, and they may or may not understand this. IAP is a great way to disappoint children!!!

There's multiple aspects of this story you can tweak such that the business becomes successful. Pick any one of them:<p>1) There is an extraordinarily lucrative market opportunity in iDevice contracting right now, which they allude to but mentioned that they avoided doing to keep momentum. Giving that living on a couch is presumably not momentum-enhancing, a two week consulting engagement would buy them another 6~24 months of runway at their imputed burn rates.<p>2) A platform/language/etc is not a death-til-us-part commitment. You can follow the money. Independent developers are not best served by the App Store, unless they get ridiculously fortunate with regard to its kingmaking economics. If you only have one chance to develop an application, you would be better served by developing for a platform where the median case pays the rent.<p>3) Don't develop video games. You're competing for the business of toxic people who hate paying money against the union of well-funded corporations (which have high production values and effective, ruthless monetization) and amateur hobbyist artistes (who have "that vision thing" and are willing to starve to deliver it for free). Try making something for more lucrative markets like, oh, businesses.<p>4) You may have deep psychological issues with comfort about charging people money. They seem to be fairly common in our community, which is unfortunate, and we seem to actively promote them, which is unfortunate++. You should first recognize that you are creating something with value for people (if not, stop) and then come to the immediate realization that, as a business, people trade value for money. (If you desire to do charity work, do it for more deserving people than gamers with iPhones and entitlement issues... and you should probably do it after having secured your ability to deliver on obligations to your family.)<p>5) If you've got a budget of 100 awesomeness points or focus points or whatever, spending 90 on your software and 10 on your business will have much worse results than spending 10 on your software and 90 on your business. Having people who can concentrate 100% on building software is a wonderful thing. They're called "employees" and they cost about $10k to $20k a month; you can pay for them after you've got a business. <i>If you desire to work 100% on software, you desire to be an employee.</i><p>6) Burying the buy button three screens behind Settings: probably not ideal for conversion rate maximization.<p>7) Maximum customer LTV of $2.99: also not ideal. Consider anything you can do to increase this, for example, offering upsells on top of the base offering, cross-selling them to other things in your portfolio or things from others' portfolio for a percentage, or developing a permission marketing asset such as an email list. Some of these are very not viable on the App Store but I think I already gave you the advice for that.<p>8) If you sell X, look at the tactics used by successful sellers of X. If these tactics strike you as morally outrageous, don't sell X.

So their first game sold for $2.99 up front and earned them $20k-$40k for two years. I would call that successful. Then, for their second game, instead of sticking to what works, they made the decision to switch to a freemium model, and made the mistake of making the "free" mode too good, and neglected to advertise in-game that there even is a premium version to unlock. Many lessons to be learned here, but rather stunning that they weren't able to fix this much earlier, before becoming homeless.

I think it's important for stories like this to get out there to contrast with big successes like Super Meat Boy and Fez (which were featured in the awesome movie "Indie Game: The Movie").

They're now Top 200 Grossing on iPad- seems like they managed to trip their way into one hell of a marketing strategy.<p>1) Bitch about not making enough money because you boned your conversion funnel.<p>2) Get an article written about how you don't make enough money<p>3) Make money!<p>Don't try this at home.

At first, 200,000 downloads sounded impressive, getting into the top apps lists is also impressive, but the problem is outlined in the second paragraph.<p>&#62;&#62;<i>Gasketball was released for free, with a one-time in-app purchase that unlocks the rest of the game offered for $2.99. The conversion rate to the paid version of the game sits at 0.67%.</i><p>It seems like they should figure out why the conversion rate is low (e.g. perhaps the free version offers too much functionality for free, perhaps the free version quality is poor and users aren't motivated to pay more etc...)

This smacked of RIAA logic. It doesn't matter what your conversion rate is when your game is free - non-converts don't <i>cost</i> you money.

This is going to sound harsh. This story exposes a simple fact: These developers went at this in utter ignorance of the realities of business.<p>If their goal was to put out a free app and not try to make a living off of it, then fine. I take it back. You don't need to know anything about business or making money to give shit away. If this is the case, don't complain and be very thankful that people around you are kind enough to support you financially and beyond.<p>If, on the other hand, their goal was to offer a free product with IAP in order to earn money and make a living, well, their decision making reveals their level of business ignorance.<p>Why is it that the competitors they refer to have such intense IAP approaches? Could it be because that's a pretty solid way to monetize your app? If my goal was to make money in that segment I'd certainly stop all coding and look at what others are doing in detail. I would not hold myself back due to ideological nonsense. If it is a business, it is about making money. If it is a hobby, it is not. So, yes, I would copy, borrow and mutate ideas from others who, before me, trenched the territory and became successful.<p>The only exception to this is if you truly have in your hands one of these edge-cases that will succeed because it is so unique, entertaining and, yes, addictive.<p>This also demonstrates a reality of FOSS (even though this was not OSS): In order to provide FOSS someone has to be earning a living somehow or the equation is never balanced. That's why FOSS is never really free (as in cost) because the development costs are being banked by someone. Linux, as an example, is probably the most expensive piece of code ever developed.<p>This case was a simple failure to make the right business decisions and nothing more.<p>That's how you end-up on the street and broke.

1) Depending on writing <i>games</i> for your income is foolish. Very few people make real money from games.<p>2) In-App Purchases come in 2 flavors: The kind that are permanent, and the kind that aren't. Apple doesn't tell you which one you are buying, which means that I just don't buy any, generally.<p>3) The few times I experimented with IAPs, my conversion rates were also total crap.

Most apps, particularly games are limited to a few dollars, which requires them to basically be hits. Reaching out to tons of people to make a hit, is difficult and expensive.<p>Giving a game away for free seems like an easy way to gain some marketshare. In practice it isn't enough. In other hit based businesses, companies use multi-faceted marketing strategies to get the word out, each one a lead bullet.<p>Unfortunately for app developers, measuring marketing efforts through the iTunes funnel is almost impossible. Where do they come from? What's working? Nobody knows. Its difficult for marketing pros, let alone a pair of developers who spend all their time developing and not marketing.<p>They just need to keep at it. Being an indie developer requires more than just developing. Marketing is part of the job. If they are determined enough they will get there. Its just tough to put 2 years into a project, thinking you are finished, and only realize you're at the halfway point.

These guys are homeless? I'm willing to shell $1000 to buy ownership of the entire game :)<p>But it sounds like they focused too little on making money. You can't give everything away for free. Give people a taste of the good stuff, but make them pay for the rest.

This isn't a sad story it's another example of developers being good at code but terrible at business. If code is your livelihood, treat it as such. Misplaced idealism is dangerous. Besides, doesn't giving someone a free game feed into their game addictions? Game pricing shouldn't be subject to some moral code. It's a game: if people don't like the price, they don't have to play.<p>This illustrates the problem with pirate software as well as pirate music and movies. People don't buy the cow if they get the milk for free.

The linkbait title is much more interesting then the actual article. This discussion is also much more interesting then the article.<p>The obvious thing is that if you are self funding, don't bet everything on one game. No one knows what games will hit and what games won't. The best thing is to swing the bat a few times. As many have pointed out, it seems like these guys should experiment more with what they have. It's not clear at all that their situation is dire.

It's an interesting article and I love how they're approaching app sales. There are some successes out there that are doing well with this sales model (the most recent download I've had like this is Outwitters: <a href="http://onemanleft.com/" rel="nofollow">http://onemanleft.com/</a>). It is hard to see where the app sales ecosystem is going though (and if consumers will really dictate this path).

+1 to devs in Iowa!! But maybe if Iowa wasn't so cheap, they would have started by charging for their app out of the gate.

I hope they read this (not sure if they will), but:<p>Ads!<p>I've a friend who gets approx $4/user/year from a non-game mobile app from ads through mobclix. I think it's a fair assumption that you'd get even more ad impressions on a game (as people spend more time in games), but even without that, 200k players * $4 each = a lot of money.

0.5% upsell sounds about right. In the app business you want to avoid a one time sale and focus on recurring revenue. There is a cap on growth, and revenues must be sustained by current users.

incentives are tricky and the story is showing what happens when you induce the wrong ones.<p>They want to have "a free game", a "cheap upgrade" and a "only one upgrade needed". Three things that do not match. If they are going for a free game but that offers the enthusiastic 1% an payed to play upgrade, that upgrade can not be cheap. If they increase to 29.9$, their conversion rate would likely only go from 0.67% to 0.5%, but increasing profits by around 500%.

Change the game name, Change the action names, Change the colors (nothing else), Put the new thing on the appstore, Report results.

Take this link off or HackerNews. It is a fraud.<p>Ctdonath summed it up beautifully... "1. The "buy" button was hidden. People who wanted to pay couldn't find it. People didn't even know there was anything to pay for.<p>2. The app has been out a week. Users haven't had time to play thru the free content and develop any desire for [unknown (see #1)] paid content.<p>Made near all users sound like Scroogeish tightwads. Unfair."

Where is the story here? You can have the best game in the world but if no one can figure out how to buy it - of course you will go broke. Isn't this common sense?<p>I see you have finally figured this out (now that you are homeless). If that does not boost your revenues - Lower the price to 1.99 or $0.99. We are in a bad economy and $2.99 is not in the sweet spot by any means.