Category: Business

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Business

Which apps make money?

[This post by Andreas Pappas, Senior Analyst at VisionMobile, first appeared on the VisionMobile blog on 13 November 2012.]

[Andreas Pappas takes another look at the results of VisionMobile’s Developer Economics 2012 survey and comes up with interesting new insights on app monetisation: how does app revenue vary by app-category and by country? Is there a correlation between time spent developing an app and they money it makes?]

VisionMobile - which apps make money

In Developer Economics 2012 we discussed app revenues and how they vary across platforms. We found that overall, around half of all app developers that are interested in making money did not earn a sustaining income, i.e. they were below the “poverty line”, which we drew at $500 per month per app. Of course the real poverty line will vary widely across countries and regions: while $500 per month may not be enough for a San Francisco-based developer, it could be more than enough for a developer based in Bangalore where average living cost is less than a third, according to Numbeo.

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Business

Different Ways of Winning on the App Stores

winning on the app stores

A recent report from Canalys highlighted the extreme concentration of income distribution across the iOS and Android stores in the US. The top 25 publishers make 50% of the revenues. 24 out of 25 of those are games publishers (the 1 exception is the Pandora music streaming service). During the first 20 days of November these 25 publishers made $60m from paid downloads and in-app purchases in the US alone. Is there still room left for smaller publishers? How can smaller companies succeed and start winning on the app stores?

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Business

Advertising to Existing Users – could re-engagement reap rewards?

re-engaging users

Currently the vast majority of mobile app advertising is used to generate new installs. At the same time, for some of the most successful revenue models, a small fraction of the most active users generate the bulk of the revenue. Free-to-play games are a good example of this model but there are similar in-app purchase driven schemes in other categories. Whilst a user is still very engaged with an app it’s likely that the most cost effective way to increase their spend is within the app. However, if an existing user stops using an app regularly ,then might there be more value in re-engaging users than acquiring a new user?

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Business Platforms

How to select a cross platform development tool

development tool

With the wide selection of cross-platform development tool (CPTs) available in the market, how should a developer select a development tool? The exact selection criteria will vary depending on the project and the individual developers involved. However, it’s valuable to look at the criteria other developers have used to select development tool and, even more importantly, the reasons they’ve stopped using them. Fortunately, we have this data from our cross-platform tools survey earlier in the year.

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Business

The changing landscape of app discovery

App discovery

[The explosive growth of app ecosystems is creating serious bottlenecks in app discovery that only popular apps can overcome. Having 700,000 apps is great for platform vendors, but not so great for developers, whose apps are lost in the heap. Andreas Pappas takes a look at the app discovery problem and considers whether social discovery is a better solution than the alternatives available today. This post also appeared on the VisionMobile blog. Follow Andreas on Twitter: @pappasandreas]

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Business Platforms Tools

Is the Era of Microtransactions in Free Mobile Games Over?

Mobile Games

W3i, the in-app offer exchange provider, released a report on December 6th showcasing recent trends in mobile app monetization. The W3iNSIDER Report breaks down data from its hundreds of game developer partners and 66 million monthly active users across iOS and Android.The data shows that smaller microtransactions ($0.99-$1.99), long thought to be the backbone of the freemium model, actually contribute significantly less revenue to mobile games than more expensive in-app purchases that range from $9.99 to $19.99.

When surveying the in-app purchase price points and how they contribute to the overall revenue of a sample of games, W3i found that, on average, 47 percent of total revenue comes from purchases costing $9.99 to $19.99. Smaller purchases from $0.99 to $1.99 only contribute an average of six percent to total game revenue.

The freemium model emerged as the foremost business model in mobile gaming with premium and subscription business models declining. The freemium model is built on the back of microtransactions with gamers spending a dollar or two to unlock virtual goods.

W3i is also reporting in-app purchasing trends from around the world:

  • The highest-spending region in the world is the United Arab Emirates- with 77 percent of revenue of revenue coming from $19.99 (55 percent) and $9.99 (22 percent) IAPs (as of Oct 2012)
  • The UK has the highest number of whale spenders- with eight percent of revenue coming from $49.99 IAPs sizes as of Oct 2012
  • $.99 IAPs sell the largest volume in China and Canada where they each make up about three percent of purchases

“Although the U.S. learned about freemium gaming from Asia, it’s apparent that Americans are taking their own approach to it,” says Robert Weber, co-founder of W3i. “Where mobile games in Asia still depend on microtransactions, U.S. gamers play more like whales- spending larger amounts of money in mobile games.”

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Business Platforms Tips

App Promotion: make or break your app

app promotion

With well over one million total apps available on Apple and Google app stores combined, plus hundreds of thousands on the other platforms, the competition to get on consumers’ handsets is fierce. As hundreds of apps are added each and every day, app discovery remains a largely unsolved challenge which is only getting worse. With a rapidly changing landscape of app store ranking algorithms, mobile advertising products, cross-promotion networks and specialist marketing services it’s very difficult to decide how to begin app promotion which is cost-effectively. The one very clear piece of advice we can give is what you shouldn’t do – nothing.

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Business

The Faces of Fragmentation: Musings on Versions and Installed Base

fragmentation

How do various forms of fragmentation of the potential audience impact the development economics? The answers will vary significantly depending on the specifics of each app but some general issues are worthy of consideration by everyone.As we pointed out recently, Android is now way ahead of iOS in terms of share of new device sales and installed base but also rapidly catching up on total revenues. The important questions for developers interested in that trend are what fractions of those markets can easily be targeted and how much will it cost to target more? 

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Business Tips

Crowdfunding: Leanest Way to Launch?

crowdfunding

One question that divides opinion among developers is when to start marketing your app. Some say if you start marketing too soon, the early interest you create will dissipate before you actually have something to sell. Others argue that you can’t start talking about your app soon enough, build a following of early adopters and you have great word of mouth marketing and an initial sales boost to climb the store charts. What if you can have the benefits without any of the downside? It might just be possible with crowdfunding.

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Business Tools

Tradable vs Non-tradable Apps

Tradable apps

We’ve previously discussed the major opportunities that are emerging for developers globally, fueled by rising demand from BRIC countries and other emerging app economies, representing at least half of the world’s mobile subscribers. In order to capture these opportunities, developers can focus on two broad strategies: to “reach-out” or to “search within”. Developers that “reach-out” will address international app-demand by supplying apps that appeal to users across borders and continents (tradable apps). These apps can reach far and wide but in order to do so requires a moderate level of localisation. Those developers that “search within” will look at gaps and opportunities in local markets. These apps have local reach and require a high level of localisation.

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