KoboldTouch has been on sale for exactly 5 months (released: Nov 1st, 2012). Time for a “numbers post”.
Let’s start with new user signup rates and popular pricing plans before I get to reveal actual and projected revenues.
New User Signup Rate
With a build-up of anticipation, the first month is always noticably on the positive side. If you ignore that first month, you’ll notice that signup rate has been very steady from December through February when it suddenly doubled in March.
This chart shows the number of new users who signed up to any of the pricing plans, with refunds already deducted:
The actual “new user” numbers (not including refunds) for each month are:
- Nov 12: 44
- Dec 12: 15
- Jan 13: 15
- Feb 13: 16
- Mar 13: 33
I believe the reason for the influx of new users in March is two-fold: first I introduced the 1-Month billing plan in Mid-February. And around the same time frame I started hosting the KoboldTouch documentation and KoboldTouch Sales Pitch on www.koboldtouch.com. Continue reading »
Continue reading »
With Apple’s blazing Q1 2012 quarterly results, which sees iPhone sales double (!) that of the previous Q4 2011 and last year’s Q1 quarter, it’s time to update my iOS Device sales statistics from July 2011.
Apple’s Quarterly Results Reports have one big flaw for those interested in per-device numbers: Apple only mentions how many iPhones, iPods and iPads they have sold in each quarter, but this includes all models. So you have to exclude the discontinued models as well as somehow determine (if only by guesstimating) how many iPod touch vs regular iPods, or how many iPhone 3G vs iPhone 3GS have been sold in that quarter.
I took the publicly available numbers and then used a reasonable guesstimate to split the device sales of two combined models in order to get a reasonably accurate estimate. I mainly wanted to determine how the gap is widening between the OpenGL ES 1.1 and OpenGL ES 2.0 models. This is particularly interesting for Cocos2D developers who may be wondering if it’s save to upgrade to Cocos2D 2.x or whether it’s still worthwhile to stick with Cocos2D v1.x to be able to deploy even to 1st and 2nd generation iOS devices. Continue reading »
Continue reading »
Update: please find the iOS Device Sales Statistics for Q1 2012 here.
Currently Cocos2D is being overhauled for a v2.0 release. It will only support OpenGL ES 2.x and thus games made with Cocos2D v2.x will not run on 1st & 2nd generation devices (iPhone, iPhone 3G, iPod Touch 1 & 2).
The two development threads in the Cocos2D forum here and here are full of users expressing their disappointment (among other emotions/criticism) not to support a rendering core that supports both GL ES 1.x and 2.x. Even though it was said that if you still need to support all devices, you can simply continue to use the Cocos2D v1.x branch.
I’ve run some numbers and came to the following conclusion: if your game only supports OpenGL ES 2.x and comes out in Q1 2012, you will lose less than 10% of customers!
Here’s why I think OpenGL ES v1.x is currently in the process of dropping dead, and close to hitting the ground within the coming ~6 months.
iPhone Sales Statistics Q1 2011
Wikipedia has a nice list of iPhone sales statistics (totals) as they were reported by Apple each quarter. These statistics range from Q3 2007 to Q1 2011. Unfortunately, sales by Apple are not reported by device, so some quarterly sales are combined sales of iPhone 3G + iPhone 3GS respectively iPhone 3GS + iPhone 4.
I tried to extrapolate individual device sales by making the assumption that over time periods where two different iPhone devices were being sold, the newer one was likely to have sold more. Since we’re talking about Apple I choose a 70/30 split, meaning I assumed that 70% of the sales were for the newer device. This seems about right since newer devices have always sold better than the previous generation, but also according to some developer statistics.
For example the Bump developers reporting an iOS 4 adoption rate of 90% in January 2011 across all iOS devices (1st generation devices can not install iOS 4). Or the Surgeworks iOS 4 Adoption report which contains usage statistics of 1st generation device users of only 2.5% for one app, and 5% iPhone 3G users for another app.
The left side of the following pie charts shows the total number of iPhone devices sold to that date, with sales periods of two devices combined. The pie charts on the right show the extrapolated sales statistics for individual iPhone device generations, and which OpenGL ES version they support.
Download the Excel sheet I used to create these charts:
Notice how in Q1 2010 about two third of all iPhone devices supported only OpenGL ES 1.x, but within a year the picture turned just the other way. In Q1 2011 two thirds of iPhone devices sold were capable of running OpenGL ES 2.x code!
This has a lot to do with two factors: the iPhone 4 sold like crazy, whereas the last OpenGL ES 1.1 iPhone being sold (iPhone 3G) was discontinued in June 2010. Meaning since Q3 2010 Apple does no longer sell OpenGL ES 1.1 iPhone devices. And OpenGL ES 1.1 iPod Touches stopped selling in Q4 2010 as well.
All iOS Device Sales Statistics Q2 2011
According to Unwired, Apple reported to have sold 200 million iOS Devices during the iOS 5 announcement. 25 Million of those were iPads. These are the most up to date sales stats, which I assume to be the Q2 2011 statistics.
Based on Wikipedia’s numbers which states 83 Mio. iPhone devices sold vs. over 60 Mio. iPod Touch devices sold, the remaining 175 Mio. should be 42% iPod Touch (74 Mio) and 58% iPhone (102 Mio).
The percentage of OpenGL ES 2.x capable iPhone devices to those only supporting OpenGL ES 1.1 was 31% in Q1 2010 and jumped to 64% in Q1 2011. Assuming the 1.1 to 2.x ratio is the same for iPod Touch, that gives us 137 Mio iOS devices (iPhone, iPod Touch, iPad) with OpenGL ES 2.x capability versus 63 Mio devices (1st & 2nd generation iPhone / iPod Touch) which don’t support 2.x.
That means 70% of all iOS devices sold to date support OpenGL ES 2.x. This leaves us with only 30% of iOS devices not capable of running OpenGL ES 2.x code.
I don’t want to lose 30% of my customers!
Keep in mind that these statistics are only about devices sold. They do not reflect what has happened to these devices since, or how they are being used today.
I can also assert that older devices are disappearing fast from the market. Even though 30% of the devices sold support only OpenGL ES 1.1, your potential customer base will be significantly less than the number of devices sold. This is for a variety of reasons:
- device has been lost or was stolen
- device broken beyond use/repair
- device simply no longer in use
- device owned by a person who is unlikely to buy new apps
Particularly the last item must be considered: the device user. Again, the user is your potential customer, not the device. And in general all of these items are more likely to happen the older the device is.
One commenter in one of the two GL ES 2.0 threads on the Cocos2D forum reported how happy users were to see a game running smoothly on their 1st generation devices. For me that is not proof that support for older devices is beneficial. To the contrary, I think it clearly shows us that old generation device users are much more selective about their purchases, are already giving up their love for their devices, and may be considering an upgrade because they may have stopped enjoying their devices. This contributes to the “less likely to buy new apps” factor.
You can also assume that users of older devices have less expendable income, or are satisfied with the device as it is. If a user is actually happy with an old iOS device, it’s likely that person prefers to use apps and plays few(er) games or just keeps using the apps & games already owned.
The number of potential customers you would lose – if you released an OpenGL ES 2.0 game right now – is maybe around 10% to 20% at most. Far less if your game is complex and visually rich, and would suffer some performance or visual degradation on older devices anyway.
What about the near future? (Q1 2012)
Considering that 6 months from now, in Q1 2012, we will have seen the release of new iPhone devices (iPhone 5, possibly iPod 5) and thus another boom in sales, it is a better deal to start making some cool visual effects with shaders that look great on iPhone 4 and 5 rather than trying to still support 1st and 2nd generation devices.
In particular if you need to put in some (or a lot of) effort to support the older devices, for example if you have to optimize the performance, reduce the feature set (eg no or limited Game Center support) or (god forbid) you need to ensure compatibility with iOS 3.0.1 or lower (CADisplayLink unavailable!). That time and effort are better spent on making a better OpenGL ES 2.x game!
Obviously the decision also depends on how visually rich your game is going to be and whether you can expect to run into performance and other issues on older devices anyhow.
I fully expect the market share of OpenGL ES 1.1 devices sold to drop to around 20% by Q1 2012. That puts the number of potential customers (for game developers) still using those devices and buying games to certainly much less than 10%. Then consider that the iPhone 5 may even already account for up to 5% (~10 Mio) of all iOS devices sold by Q1 2012.
By the end of 2012 the potential customer base (for game developers) still using 1st and 2nd generation devices will have become entirely negligible.
That means, if you start developing an OpenGL ES 2.x game within the next 3 months, and your game takes 3+ months to complete, you will lose very few customers by only supporting 3rd generation and newer devices. And you may actually be able to win more customers by cleverly supporting the new devices!
I think it’s wise to start using Cocos2D v2.0 as soon as it is production-ready, which may be in around 3-6 months according to the comments and current progress.
Game On, Cocos2D 2.x!
The important bit first: the price of the Line-Drawing Starterkit is back at $179!
The simple reason: customers voted with their wallet, it sold zero units at the $299 price point over the last two weeks while people kept asking me for rebates and price drops. I clearly misjudged the value proposition of the Starterkit and how much potential customers would be willing to spend.
About Thinking, Learning and Knowing
I’m going to be upfront about the sales numbers because I want to be instructive and convey the lesson’s I learned. I also find these numbers posts very intriguing myself. One of the things I love about working under my own terms is that I can choose how transparent you want to be. I feel there’s more to gain from transparency, being open and upfront, and sharing what you know then there is to lose.
I’ve actually been told a few times that you can’t sell to cocos2d developers. Which I find astonishing. “I don’t think there are sufficient willing customers” was the one sentence I received in an email which I find most telling. Thinking is not knowing. Thinking is: not knowing! Trying and not succeeding is ok, but thinking and not even trying is not. The former you might regret financially but seldom will you regret having done it. The latter is just being complacent and accepting the status quo, or simply a reluctance of pursuing unconventional business ideas.
I can only say: I’ve learned a lot from running this website over the past 4 months. Certainly more valuable lessons and knowledge than from most of the books I own, and the above selection is just a fraction of my library. They are the books I hold most dear and are most relevant to my work right now, including Stephen Hawking’s Universe in a Nutshell as the perfect separator between left-brain (hard skill) and right-brain (soft skill) books. It puts everything in the proper perspective. I certainly didn’t expect to learn some of the lessons nor was it easy to deal with the very unexpected ones, but I did nevertheless. The good part about the hard lessons is that they make me think even harder to learn what I need to know to understand. I also have a bunch more unconventional ideas now. And I grok Invictus.
The Line-Drawing Game Starterkit has been on sale (40% off back then) from July 10th to August 1st, that’s 23 days. From July 10th until the public announcement on July 20th the sales were limited to my Newsletter subscribers, close to 670 people were given the password to access the sales page at the time.
When I formed the idea of selling a Starterkit, I punched some numbers about website traffic, pricing, conversion rates, looking at other products, thinking of what certain indicators could mean, why people are having success and why others don’t. Being a pessimist I came to about 3 sales per month if the price is around $200. That would have been nice, and would have allowed me a return of investment in less than 6 months. And when I was optimistic I thought I could be making up to 5-10 sales per month, perhaps by being featured prominently. I definitely had enough positive indicators to go ahead and try making and selling the Starterkit and being sufficiently convinced that it’ll have a positive impact, financially and otherwise.
The reality is that I sold 30 copies at $179 each within 23 days! Way, way more than my expectations. See the screenshot of the payment report to the left for the monetary details. Note that the first section with 3 sales were test sales by myself, so that amount should be deducted from the total. Also, 30 times $179 does not equal the sum on the bill because surcharge fees depending on the payment method have already been deducted. Net sales is the amount after Plimus took their share, which is close to 5% if I remember correctly.
I estimated my return of investment (break even) at about $4,000. So overall it’s not bad. Not bad at all given that I made all those sales in 23 days instead of months.
The downside to this story is that after setting the price high at $299 I did not make a single sale in the past 2 weeks! This price point seems past a certain pain threshold that developers are feeling comfortable spending. Customers voted with their wallets and I basically killed my own business by modifying just one (crucial) aspect of it. I was my own worst enemy by making a wrong judgement call.
And of course I’ll try to fix it: from this day on forward the Starterkit’s regular price will be back at $179! It has proven to sell at this price point and I’m hoping to see sales pick up again. Despite this no-sales period of over 2 weeks the Starterkit earned me $120 per day on average, or an hourly rate of $15 assuming a regular 8-hour work day.
If it turns out that continued sales from the Starterkit allow me to live off it, I’m going to run this website full-time in the near future. That means more free stuff, more intriguing blog posts and every once in a while a new commercial product that targets very specific unfulfilled needs of cocos2d game developers. You might consider the cocos2d book to be one of these commercial products, and I intend to improve it after press by listening to reader’s feedback and filling any holes with free Tutorials and FAQ entries on this website. It will be a book that continues to get written.
More Lessons to learn
If you want to learn some business & marketing lessons in general I recommend reading The Long Tail to understand how niche markets work and Influence: The Psychology of Persuasion for a lesson in marketing which I find important to understand both from the seller’s and the customer’s point of view. The Long Tail was instrumental for me to actually become comfortable with the thought of selling a product to a niche audience and why that idea might just work. But also instrumental because I just keep shaking my head when I read the naive comments of some people. That’s also where how to deal with critics comes in handy.
If you think your game suffers tremendeously from App Store Piracy, you’re wrong. To put it bluntly: your game has simply failed on the market!
Reports that put the App Store piracy rates at “at least 60%” and developers reporting piracy rates of 80% and even up to 95% are mathematically correct but what they often forget to tell you are actual sales numbers. In the rare cases where Indie developers also mention how many sales they have made, pirates or not, these numbers are always extremely low. For a commercial developer who reports an 80% piracy rate on one of his games it’s simply an attempt to turn terrible sales into a PR story which might give their game a little bit more attention. In fact, i expect the games who report piracy rates of over 30% to have sold no more than 5,000 copies. At $.99 this creates a revenue of $3,500 – maybe a good number for a two-man team but a catastrophe for a commercial developer. This is hardly a problem caused by piracy but a simple failure of the product on the market.
What you have to understand about Software Pirates in general: they use a lot of software. In fact, this is their hobby and favorite passtime, to try out as much software as they can get their hands on. So you will always have a minimum amount of pirated copies of each piece of software, no matter how successful this software is (or not). Of course, with higher success and more sales of the software more pirates are also likely to use it because they, too, value quality software. But given the amount of jailbroken iPhone devices prepared to run pirated software there’s a hard cap of the maximum amount of piracy you will ever see on any title. Just as much as there will be a minimum number of pirates playing every game as soon as it becomes available and regardless of how successful it is on the App Store. If your sales are close or below that minimum number of pirates, you naturally get piracy rates of over 50%. These pirates don’t cut into your revenue however. Ignore them. They never would have bought your App in the first place!
David Rosen from Wolfire reports in his Another View on Piracy article that the highest number of Jailbroken iPhones worldwide is said to be 10%, and in the USA – whose users constitute about two thirds of the iPhone/iPod market – the number of jailbroken devices is just 5%. Assuming a total installed base of 75 Million iPhones (50 Mio. as of April 2010) and iPod touches (20 Mio. as of Sept. 2009) we get at most 7.5 Mio jailbroken devices worldwide, or approximately 2.5 Mio jailbroken devices in the USA. They are not all pirates, however. PinchMedia reports that 38% of jailbroken devices have run at least one pirated App. They also state this number is low. So let’s just take half and we’ll end up with 3.75 Mio. jailbroken devices worldwide which have run at least one pirated App. Still a pretty high number – but it only tells us that they have started one pirated App but not how many or how much of a pirate these users really are. If i had to guess i would say that 10% or just about 400,000 of these users are active pirates who try out a lot of Apps on an almost daily basis. These are the pirates who make the biggest impact in terms of per-App piracy numbers. They are also the users who are least likely to upgrade their pirated copy to a legal one, if they ever do it at all. And trying to fight these pirates is anything but futile – they will never be your customers!
PinchMedia also supports my theory that most Pirates try out as much Software as they can which, of course, leaves less time to use each App intensely: “Pirated applications are used less frequently, less intensely, and for a shorter overall length of time than purchased applications.”
Let’s go back to the gist of it: developers who have a problem with App Store Piracy have, in my opinion, either a problem of perception or they’re making a simple PR statement aimed at getting them more attention, hoping to achieve better sales. The developers who suffer most from App Store Piracy are those who simply are not successful. Their real problem isn’t Piracy, it’s much more likely that they failed either at Marketing, Timing, Quality or finding their Target Audience.
Let me sum this up with a simple chart which i think explains why App Store developers report amazingly high piracy rates, when in fact they are reporting the commercial failure of their App: