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 Numbers
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.
The Future
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.
WOS Blog has a post online which really sums up well how i look at the App Store:
“Don’t believe anyone who whines that it’s hard to make money with a really good game on the App Store, viewers. They’re either lying, or imbeciles, or both.”
It’s called How not to do it and covers some basis of why certain Apps succeed while others fall by the wayside. Sometimes it’s a matter of beating someone to the market, other times to learn from other’s mistakes, but mostly to price your Apps fairly.
A while ago i read about Indie game developers who eventually thought it would be a good idea to spend 3-6 months on their next game, to sell the App by means of quality and content. While there are chances that this will work and even reward you greatly money-wise, it also increases your risks by several factors. You’re going down the same path that leads to similar problems of the AAA game developers, albeit on a much smaller scale. It’s a hit-driven business. If you did moderately well on your 1-2 month games, and then you do a 3-6 month game, your chances of making it a success get slimmer and slimmer. It does help to understand the market and marketing but even that won’t help you if the game doesn’t vibe with players.
So, would you rather have a less than 50% chance of making it (relatively) big, or a 100% chance of doing moderately well?
Of course, if you can keep running the 100% part of your business you should really consider making the bet. But if you have no money to spare you should stick with moderately well and instead keep pumping out moderately well doing games. Make 8 of those over the year and you got yourself a respectable business nonetheless.
I wonder what happened to those Indies and their “big project”? Hmmm …
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:
I just published an update to the Marketing FAQ beginning with the lesson Your Privacy isn’t.
Those are mostly thoughts i had while i was cleaning out my Twitter list (who i am following) to make room for all the much more interesting people who are now following me because of this new cocos2d website. The Twitter celebrities had to go to make room for you! 
It never actually crossed my mind that the Marketing FAQ would be so popular. For me it was a last minute addition to the cocos2d FAQs from a spontaneous thought. I’ll make sure to update Marketing and PR more frequently. I certainly learned a lot about it while i was busy with my colleagues getting an iPhone game company startup funded for the better part of 2009.
Check out my profile on TheyMakeApps. It’s a cool site to get listed on if you do iPhone or Mobile Development in general.
They have a free account and a commercial which costs a whopping $89 per month. Given how frequented the site is i think for some developers it can be worth it but most should be ok with the free account. Once you have customers you should try to make them feel happy and foster that connection - if it is a good one. It’s much easier to close a deal with someone you know and worked with rather than finding another contractor. But to make the first connections a place like TheyMakeApps can be pure gold!
Before you create your own profile, take a look at the existing ones and check which you find the most impressive. Make sure you sell yourself well. A one-liner “I’m a programmer, i can make iPhone Apps.” just won’t cut it. Remember, you’re selling yourself, so put on that Marketing hat before you write.
I stumbled across this AppBoy Blog Post about Android and its Market. And it reminded me of what i think when i hear people swearing by the Android: the Android is not going to rule the world. Period.
The reasons are not many but they are crucial. First, Open Source is not a Feature! I hear that very often. “Yeah but Android is Open Source, you can’t compete with that!”. Uh-huh. As a matter of fact, i do not want to compete with Open Source if that means low-quality crap. There is no quality control on the Android Market. For some this spells freedom of choice and what not. And yes, Apple has made some decisions to pull apps from the App Store that a lot of people didn’t like. But let’s not forget that 99% of iPhone OS users just don’t care. There’s still enough diversity, and it’s not like Apple has pulled the Facebook App, Twitterific, Doodle Jump or Angry Birds. Apps that people really use and like. Keep in mind that whenever Apple decides to pull an App, recently that was because of mature content while allowing a big player in that market to keep his Apps online, people talk about that because (a) they like to get upset and (b) the blogosphere and news outlets need something to talk about. In the end it’s just hot air.
Let’s get back to Android though. So it’s open source. What does that even mean? The OS itself is open source. Great for the companies who build their own devices on that software. Bad for the consumer: you still have the same problem all mobile phones have. It’s like switching from Nokia and it’s hundreds of different devices united by the Ovi Store to Android, with its hundred and more and more diverging devices and a united App Store. Where does that lead us? A huge pile of free choice no one really wants if you so will. For developers it gets increasingly harder to develop Apps that run on all Android devices and what’s more, even if you manage to support 99% of all devices right now, tomorrow there will be a new device coming out that won’t run your app. As an independent developer this is hell. You have no way of telling whether supporting a specific line of Android devices will get you a significant sales boost. So how do you calculate how much time you’ll spend on each? It’s pure guesswork. I pity Android developers.
The iPhone market itself is hard but there’s one thing you can and should put all your efforts in: Marketing. You develop for one device (well, ok make that 3) while in the meantime you figure out which websites to target, what to blog, which communities to join, where to apply for App reviews, what Press Releases to send out, etc. The code is already done, Marketing your App is the hard part. It’s the same with the Android, except that the code part with its diverging devices is just as hard to do. And it’s just not fun adapting the same app to different devices. It’s one of the things i wouldn’t mind not doing.
Most of the outspoken people who choose Android choose it because they don’t like Apple (fair enough), or they don’t like closed ecosystems and enjoy (really?) everything that has the label “Open Source” attached to it. However, they’re a minority on the Android market. Most Android users just got what they needed: a working mobile phone. They have no idea, and no clue and don’t care about Open Source. For them, the label “Open Source” has no meaning.
Search my cocos2d for iPhone FAQs & Tutorials
Please note that the blog search in the upper right corner doesn’t search my FAQs and Tutorials.- Note: please do not share direct download links to PDF files, the download links expire after a couple minutes!
Marketing your Game
- How much does PR cost?
- How important are casual game reviews?
- Important tips for making a great website for your game!
Bad user reviews and comments can actually be a good thing
Bad reviews, or simply trash talking and bad-mouthing, can have a positive effect on your game, and yourself. Don’t be overly concerned if some idiots voice their BS and drag down your review score. If you value what you do and others see that value, the positive effect of some bad rep is simply that it encourages others to voice their opinion in favor of the product and you. The things you should not do, however, is to be overly protective and try to remove such posts. That will only serve to earn you disrespect from everyone because freedom of speech is a much higher value. If disrespected, it will earn you much more disrespect in return. If you’re in doubt whether what’s been said is offensive, keep it online until someone complains. The more absurd and unreasonable negative comments are the more happier should be, and you’ll quickly notice other users jumping in to make their case. You, on the other hand, should stay out of it. React to the positive comments, ignore the bad-mouthing and trash-talking that is only targeted to lure you out in the open.
Applied to the App Store, where you have no control over the bad reviews other than complaining about them in your blog: don’t do it. No one cares about your whining on bad reviews. They happen. If your game is really good, it will get good reviews. The bad ones will only serve to encourage others to post their opinion and they often provide good reasons not to listen to “those jerks”. The other bad reviews which are clearly not from idiots you should hold dearly. They contain valuable criticism about your product. It will help you improve. Nothing is more powerful than a dissatisfied customer or someone who was simply disappointed which you were able to turn to your side by listening and reacting to their criticism. People love to criticize, but even more so they love when someone is actually listening and making changes in their favor.
Caveat: some people will always criticize no matter what. And some will always know how to make things even better. Those are the kind of people who could sway you into feature-creep, don’t listen to them, they’ll kill your product the more you try to make it theirs. And some will be jerks for live and just randomly change their opinions on a daily basis, probably based on what they heard or read today, or whether they were drinking or not, or whether today’s weather is good or bad. Listen only to the feedback that is voiced most often, which others agree on and which is consistent.