http://appshopper.com/games/gasketball

http://www.appannie.com/app/ios/gasketball/ranking/history/#...

This is really gonna sour sympathy for future stories of actual failures.

It's a classic shareware model and results in my willingness to pay more for games because there's much less risk. The good ones also are very explicit in the description on the App Store that it is a first level/trial with IAP.

I find it to be very consumer friendly.

As for the guy's situation it sounds like they need some more nag screens and easier ways of sending them money. (Well it is currently a lot easier than the old days of shareware, no envelopes to fill out, just a button to press.

Yup. For what little it's worth, "IAP" is a big red flag to me, a warning that the "free" app will prove annoying and/or expensive. I'll usually not download any with it, having learned the hard way (right or wrong) that at these prices it's better to pay the couple bucks up front and get the full clean app, than get "free" and have to wrangle with brokenness and intrusive ads and still end up having to pay.

That's a less than ideal launch if you've failed to monetize it properly, but obviously that was nowhere near the cause of homelessness.

Freaking out because conversion rate on their IAP is lower than expected seems a little premature. If they keep getting 30k installs a day, they will end up with plenty of options for monetizing the thing.

Of course i'm talking trends, not real numbers here, so don't nitpick the specific numbers i've made up here please.

You seem to have learned the facts, and you seem to have gotten the point, and it seems to be the same point that I got, which suggests that the message is getting through clearly enough. So what's wrong?

Are you unhappy because the article doesn't have a strong editorial slant, as your comment does? Do you wish the journalist had come right out and said, in paragraph one, "These developers are homeless because they have lousy sales skills"? I'll say three things about that.

One: Some articles do have that style (ahem Zero Punctuation ahem), but others simply try to state facts and let the readers draw the conclusions.

Two: The two styles work well together. The interviewer lets the principals tell their story, states some numbers for perspective, and politely adds a few important factual observations ("It took me a few minutes to figure out how to pay for the game, and I was specifically looking for the menu. There’s nothing shocking about the low amount of paid sales; the value proposition is never made explicit.") and then someone else - like you - draws a conclusion and drives the point home. It's a team effort.

Three: If one makes a habit of using the stories one hears to overtly and publicly ridicule the storytellers, one's career as an interviewer won't last. People will clam up. This is a fact of human nature. Don't expect more from journalists than is possible.

(There are journalists who are so talented that people happily visit with them in order to be ridiculed. This is a miraculous skill and I suspect it's particularly hard to pull off in games journalism: The people building the games have no need to appear in public at all, let alone risk ridicule. They're not politicians or celebrities.)

A whole lot of emotive verbiage burying two salient facts:

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.

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.

Made near all users sound like Scroogeish tightwads. Unfair.

I like a good information article that lacks editorial slant. I also like a good editorial as long as the facts are there to support the angle. This article has is labeled an editorial but the only slant seems to come from the subject of the article and isn't supported by anything more than comments by the article subject. Most of the important information can be found somewhere in the article, but that's no excuse its confused and poor presentation.

Beyond the time it took to conduct the interview, I'd be surprised if the author of the article spent much more time writing it than it took to type the words and hit submit. Because that's how it reads, and that's what makes me unhappy.

The article doesn't live up to the promise: "Our focus will be on longer form journalism with in-depth research, interviews and data, highlighting aspects of the gaming lifestyle that many would miss at first glance. Reviews and previews of games and hardware will certainly be a part of the content, but the discussion will be less on specs and more on experience. We want people to not only see new aspects of the industry, but think about games in a different way."

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.

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.

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.

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.

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.

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.

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.

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.

From the article author: 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 wasn’t even aware there was anything to pay for to unlock ... I learned I could buy the game .. I went looking for that option .. took me a few minutes to figure out how to pay ...

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.

As for exposure: Surprisingly, Gabe and Tycho haven't managed to talk up themselves enough (IMO):

http://www.kickstarter.com/projects/pennyarcade/penny-arcade...

With an hour and a half left, I'd expected this number to be three times larger than it is. Sure they "hit their goal", but when you set up that road map of stretch goals it seems like you're really hoping/expecting to hit $1M, and that doesnt look like a remote possibility.

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.

5 easy steps to homelessness:

1. Spend years building products for a platform, where $1.99 is a high price.

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.

3. Then set the price to zero, because you're a nice guy.

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!

5. Make it up in volume

"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.”

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.

Excuse me while I relieve myself of the agony of watching people do this over and over again.

AAAAAAAAAARGHH!!! FOR FUCK'S SAKE, STOP IT!!!!!

Why do developers worship Apple, but absolutely refuse to take the slightest hint from them on how to do business?

Read this - http://www.joelonsoftware.com/articles/StrategyLetterV.html

And repeat after me:

"Commoditize your complements."

"Commoditize your complements."

The app store is the most brilliant and brutal execution of this strategy. Apple is selling $500 phones - 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.

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!

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 getting his point.

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.

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.

"We need to make a conscious effort to be good at business."

Part of being good at business is resisting the temptation to listen to some of the things that are written on HN which highlight how wonderful sharing and giving away things are for free, and scorning anything that looks like profiteering at the expense of the poor users, developers or Aunt Jane.

There is what appears to be a consistent "don't be evil" meme where "don't be evil" takes on whatever the group think is jealous of that they can't do but perhaps makes money for companies and developers.

I've run several businesses and make money in many different ways. All above board. But I'm sure if I highlighted some of the things that I do I would be roundly criticized and downvoted on HN for, in the opinion of the group, taking advantage of people, developers, programmers who expect perhaps that everyone dedicates countless hours to helping others for the good of society. One example might be anytime I attempt to highlight how I've sold or help sell domain names for people. The hate comes out in droves from HN'ers who don't believe there is absolutely any justification at all for someone being able to sell a domain name. Of course if I tell the same story to regular business people I get looks of envy - consistently. While it is true that they don't have a horse in the race, they also appreciate the point of business is to make money.

In fact, they say normal IAP is exploitative, but the fact is, they can still learn from the technique to make money without violating their ethics. The question they should have asked is "at what point are we crossing the line?"

The accurate title should be 'developers bankrupted by their own incompetence'.

It's how you start thinking if you grow up with everybody giving away their $product for free on the one side and the opensource/libre software hippies who give you a hard time if you try to make a living with software products on the other side.

Now if the results were just some homeless developers that wouldn't be a big problem. But it's far worse because the customer base has been miseducated and now awaits almost everything for free or for $.99.

/rant

I don't think that's quite the case.

They went free because they saw a lot of profitable apps using the free + In-App-Purchase model.

The problem is they didn't think through what their own IAP model should be. They just focused on not being exploitative (the part that makes many of those free apps so profitable), when they should have been thinking about how much they needed to charge to be profitable, given the single IAP they had to work with.

They also might have gimped the free version a bit more to encourage people to buy the IAP.

It's requires a bit of a game design ingenuity to make it work so that you can't just buy your way to victory, especially in multiplayer setting, but is doable.

I think it would be more accurate to say that they saw several well publicized stories about where that model worked. They certainly didn't read any analysis highlighting that strategy and how it worked for all that tried it that way.

The very first thing I concluded is that, to make a sustainable business, the app has to be seen as a marketing expense and the actual business needs to be somewhere else. Trying to make it with an app alone, especially in a niche market, is not going to happen.

Games are even worse, because, by their very nature, they are a boom/bust industry. You survive in one of two ways as an indie: making incredible games and marketing the crap out of them or making a lot of OK games to flatten the boom/bust curves. It sounds like these guys want to do the former, which is awesome, but they've fallen for what I call "arrogant developer syndrome", which is simply that they believe "If you build it great, they will come and throw money at you." Marketing is as important to product development as writing software. You can build software without marketing, but you won't build a product.

(As a side note related to said app/business, if you are in any way involved in startups [including wanting to start one someday], I'm trying find that actual business. I've got a very short survey that I could use feedback on: http://www.surveymonkey.com/s/F7W9P5P )

No!

They suffer from an advanced mutation.

"If you build it great, those guys over there will come and throw money at you. Ewwwwwwww. Green stuff. Let's move over here to these guys. They will come and throw 1-star reviews at us. It's the only thing that can push our limits and make us even greater."

But the one thing that I could never wrap my head around was the fact that they saw money as inherently evil. They went so far as to actively avoid using or accepting money, to the point that it actually hindered their Samaritan efforts.

The more "good" people who see money as evil, the fewer good people who will use it. Which means that a higher proportion of it will go to "evil" people and deeds. Which, in turn, feeds back into the loop to power the false perception that money itself is a bad thing.

The upside of people wanting to give their labors away in exchange for recognition or a university paycheck is that it has pushed the rest of us up the value chain. Big companies want to be like IBM in 1970 -- owners of the marketplace, who stick you with whatever makes sense to them. That's why greybeard mainframe types call everything that isn't a mainframe "open systems". IBM, Control Data, etc were (and in some cases are) so restrictive that you literally had to provide their on-site engineers with a private office suite in your facility that your employees were not allowed to enter. (Where the manuals, etc were kept.)

All of this "giving away" of stuff has stopped our society from reinventing the wheel. I can provide motivated people with marginal education and they can produce useful things without a deep understanding of how computers and compiler work. That's powerful stuff.

True believers always come with associated baggage. Whether they want your money, your soul, or something in between, there's always ups and downs.

Unfortunately, the people "giving away" spend a lot of time reinventing fantastically-different but only-very-marginally-better wheels. Every week I see on HN about some new language or framework someone has invented that fragments the market even more. If you aren't being compensated in dollars, being compensated with being "the inventor of X" can come close, so there's a big supply of this.

As internet access is commoditized the price of internet ad space will climb.

As a sidenote: 'developers become homeless' is a story guaranteed to go viral. Brilliant marketing.

It may be Apple's petri dish, but this is the culture that's evolved in it, for better or worse.

I quote from http://www.apple.com/iphone/from-the-app-store/ :

Over 500,000 apps.

For work, play, and everything in between.

The apps that come with your iPhone are just the beginning. Browse the App Store to find hundreds of thousands more. The more apps you download, the more you realize there’s almost no limit to what your iPhone can do.

There's no limit to what the iPhone can do because we don't even need to tell developers how to price their apps.

There are hordes of 20-somethings subsidised by VCs to extend our platform for free forever. No wait. They pay us 100 bucks a head for the privilege. Every year. And there are thousands others who follow suit, even without funding, because they have selectively read all the chapters of Steve's biography talking about the importance of beautiful typography and minimal furniture.

There's no limit to what the iPhone can do because we don't even need to tell developers how to price their apps.

I'm going to stop now. This is too painful to write about.

You're wrong. There are plenty of paid applications sold on the App Store that make decent money. One of my paid applications is bringing in enough to live on, with little maintenance, and without being on any of the App Store charts.

Aside from blind Apple hate, what exactly are basing your argument that the App Store is filled with hopeless developers and un-sustainable business? Do you have any evidence that the ratio of unsuccessful business ventures is any higher on the App Store than in any other walk of life?

I'm sorry about my hyperbolic tones earlier. It's just that there's so much blind hype about the app stores, that it upsets me to see indie devs getting lured in and going bust. I don't hate Apple. I think they are brilliant.

I haven't done huge amounts of research on the distribution of outcomes for developers in the app store, but the typical prices are so low that you'd have to sell to a hell of a lot of people to make any decent money. Moreover, most devs only charge a small one-time upfront fee or IAP, which means you need to keep finding more customers or churning out apps.

I know how hard it is to make a good business even with a SaaS recurring revenue product. A life-time value of $2 sounds horrifying.

There is no doubt in my mind that some people are making good money on the app store. My point is that they could be doing a lot better in another market, with lower risks.

You mention one of your apps is making you enough money to live on. Do you expect that to carry on for a while? Or will you need to make more products? If you're willing to share, I'm curious to know more about your business, but I'll understand if you don't want to share too much.

No. This right here is where you're way off.

Some hypothetical math: $3.99 app, $2.79 after Apple's cut.

$2.79 X 50 sales/day = $139.5 revune/day = $50,917 per year.

Enough to live and quite conservative if you make a quality product.

How long does it take to make a $3.99 app? Do you factor in those development costs?

If it's just one person and you make $50K, that's fine. But what if there's two of you?

What's the probability of getting 50 sales/day and for how long? In the event that you get, let's say 25 sales/day, what's your fallback strategy?

awolf, you may very well be selling hundreds of copies a day of your apps at 10 bucks a piece, but the point is that the vast majority don't.

No. It is in the process of settling at $WHATEVER_WE_CAN_MAKE_YOU_PAY

These guys correctly observed that free apps + IAP are getting the most REVENUE. Not installs, revenue. What they failed to understand is that this only happens when you do exactly the one thing they absolutely did not want to do: milking each customer for what he/she is worth aka "capturing the consumer surplus".

Yes I repeat "Commoditize my complements"

I'm not a big gamer, but on the first page of my phone's springboard I count $300+ of apps, some of which have ongoing subscription costs. That's money that I paid because I got value. I'm happy with every one of those purchases, no developer starvation required!

One objection I take to your post is that I don't believe the narrative that the App Store is just a lottery. As an example, Tripit raised $7m, built an app that makes my life better, charges me $40/yr, and sold to a corporate buyer for $120m. That's a fantastic, real business.

On the flip side, these guys built an app with ARPU of $0.013.

Tripit didn't win a lottery; they provided big value and got paid because of it.

Tripit and every other VC-backed company is in a completely different business than indie devs making apps. The product that companies like Tripit are selling, right from the beginning, is the company itself, not some free or cheap app. The app is just a marketing vehicle to increase the price of the company.

The amazing thing is that PG himself has been clearly saying this for years. And we still refuse to accept it!

Blindly copying VC-funded startups' surface tactics is the second leading cause of indie developer homelessness.

If you are in the business of business, you've got to sell. Successful entrepreneurs, whether VC-funded or bootstrapped, know how to sell.

If you are funded, it would be stupid to try and do anything that doesn't increase the valuation of your company. The best founders know how to weave a compelling story, and are always selling their company. Always.

The most successful bootstrapped entrepreneurs are always selling their product. Notice how patio11 does not miss an opportunity to somehow weave in a mention of one of his products, while still coming across as the most helpful guy ever (because he is). And when he's blogging about SEO and other useful stuff for other entrepreneurs? He's selling his consultancy services.

If you're not selling, it's not a business. It's a hobby.

ABC: Always be closing.

A famous patio11-esque statement is a comment like "If you think that's a good sales technique, you don't understand the mindset of middle-aged schoolteachers" (while not repeating the fact that you market a product to that specific demographic.)

Can't fault that much. It would be extremely sacrificial to complete avoid saying "BCC" at all or ever mentioning that you generate X-figure returns for your consulting gigs, and spammily redundant to re-explain the whole Bingo Card business in every post.

You give away far more honest value (good, detailed advice) than you take away in "promotional references", contrasted against link-litter posts like this:

Headline: How X can help your business

Poster: Yeah, at http://mycompany.example.io, we use X.

You are like a human Google, giving away good, in-depth information, with a side of context-relevant promotion for your consulting business, but the information is valuable even without "clicking to learn the secret" or "buying the book". If all advertising were like that, the Internet would be a much nicer place.

PS: write a book.

That's a great business plan and not lottery at all!

In particular, most of the games/apps I've tried that use that "upgrade from free via in-app purchase" model make it annoyingly 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.

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

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.

You have to wonder where Notch would've been if he hadn't sold Minecraft before he was "done". As flakey as he (all of us really) can be as a dev (he's admitted as much himself), he definitely needed people depending on him continuing work.

Remember: When people want to give you money, make it as easy as possible.

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."

1. Development cycle is way too long. You have to move much faster in mobile, especially for a casual game.

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.

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.

4. Don't leave customer acquisition to chance. It sounds like their customer acquisition strategy was based solely on app store visibility (and hope).

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.

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 ?

TBH I rather play 5-7 dollars straight away for a game that includes everything then 0.90 cents where everything is locked up.

If DLC's are getting ridiculous on consoles, IAP is the apple store game cancer. It should go away.

And it can be done in a way that does not compromise the game design. These guys tried to do the most simple variant of that (try before you buy), they just executed very, very badly.

Heck, I wouldn't mind DLC at all if it provided decent value for money instead of costing $10 for a measly 1.5 hours of gameplay compared to the $60 for 40+ hours in the main game.

So even if most people do hate DLC... it just doesn't matter.

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!!!

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.

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.

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.

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.)

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. If you desire to work 100% on software, you desire to be an employee.

6) Burying the buy button three screens behind Settings: probably not ideal for conversion rate maximization.

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.

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.

This.

The money in the App Store for the vast majority of developers is not from the App Store directly but from building apps for organizations who want to be in the App Store . Sometimes it's just all about influential/powerful people and their ego [1]. Yes, the apps have to look good (but Apple makes it easier than Android to make apps look good - remember the bar keeps going up and up).

As a sub-contractor, we would handle everything from the initial Apple developer account (for the company) to TestFlight betas to code/content updates. Complete outsourcing. The customers never know (or care) that XYZ company/national non-profit or Fortune 500 brand isn't writing their own apps - they just see "XYZ Brand, updated 08-Mar-2012' in iTunes.

[1] I recall a conversation once with a museum marketing person. They were basically like 'Well, did you look at the MoMa's app?'. I tried to remind them that MoMa has a basically unlimited marketing budget to spend on slick, polished apps - but they all want to bragging rights - for the museum president to be able to show his/her peers (other museum presidents, board members) the app. Really.

I actually ended up working on a completely different project but I had to periodically build a useless calculator using jQuery Mobile in the corporate colors and present it to our completely useless VP of IT.

He had sold the company's leadership on the absolute necessity of a mobile presence, that this effort needed to be completed post-haste and how it would dramatically increase sales (most of the company's business was selling insurance to other financial firms, almost no consumer products in their portfolio).

In my first meeting with him he told me he wanted "MSN Mobile for an insurance company" and offered no other instruction. He literally pulled up m.msn.com on his iPhone and said to make a version of that as their mobile presence. After that meeting I just hid in my cube and laughed for a few minutes. That was when I realized what a farce this effort was.

Basically the entire development team knew how pointless this was but the VP had sold it to the rest of the execs and now they needed to build it. No one wanted to put in the effort. The created the internship position so they could foist the actual coding off to an unsuspecting college student (me) while actually having him work on an unrelated but useful project.

Didn't learn much about coding (VB.NET, ugh) but the experience in how a bad company works? Invaluable.

They wanted to live their passion and they wanted to support themselves off the app. ("We wanted the game to be free but also we want to make a living off of it since we’ve spent 2 years on it.") But they only fought to service one of those goals.

Thankfully, most of us here on HN do things where our passion is something that has enough monetary value to support a family. But nonetheless, "live your passion" is just bad job advice. "Find a way to make your passion work" is much better.

"amateur hobbyist artistes (who have "that vision thing" and are willing to starve to deliver it for free)" - I'd say that Mike and Greg are already in this category. If you check out their site (http://mikengreg.com/), you'll see that they release most of their stuff as free. They live in Iowa because it's cheap. They want to be able to make their own games and not starve or be homeless while doing it.

Software isn't necessarily the best way to make money period, if all I cared about was money I'd rather be managing a hedge fund or something.

Well, then they succeeded and we should be happy for them. They don't have a business, but they've got a great game.

If and when their priorities change, they'll move business skills up the priority list. I guess they could get a publisher, or something?

These guys want to make video games. Maybe that's enough to make it work and maybe not. Time will tell. But by the logic of #3 we should all just do whatever puts money in the bank. That argument quickly devolves into a lot of would-be entrepreneurs sulking back to jobs they vowed they would learn to live without or building companies that are temporary money making opportunities, not something worth the devotion required.

Most importantly, these kids are making games with traction -- 200k downloads in a week is very, very good, especially since they don't seem to be that focused on actually marketing their games. That means they've got some special sauce. Tweaking what they have to bring up conversions is a solvable problem. Finding pizza money is a solvable problem.

If they're broke and people are playing their games then that means their customer acquisition costs are basically zero (since they don't have any money for it anyway). They don't have to get conversions up that far to turn an acceptable profit (especially since these guys apparently live on peanuts).

"You're competing for the business of toxic people who hate paying money" -- that's simplistic to say the least. I don't want to bother to dig up numbers but plenty of money is spent on games on mobiles and everywhere else. If you want to generalize that way you might say that about the whole mobile "app" market and the drive towards free or $.99 -- people expecting a lot for nothing -- yet it's still a thriving industry. If you're talking about the freemium or f2p model (in apps or games) it's not like the concept was invented by Zynga. The fact that freemium works was discovered -- it's a model the market supports and supports well.

"Well-funded corporations (which have high production values and effective, ruthless monetization)" -- high production values, especially on mobile where AAA graphics and open, 3D worlds aren't possible or even desirable, is not the issue it is on the consoles and PCs. Plenty of successful games are relatively simple 2D and have limited content. High production values in those cases can be measured in thousands of dollars, not millions. Ruthless monetization? What difference does that make in terms of competition, especially since we're talking about "well-funded corporations?"

If you're not that familiar with the market, pick up a big EA title and then play something like Tiny Wings. Which one was more fun? What do you think their comparative budgets were?

The "big corporations" -- EA et al I guess you mean -- were slow to move to this newest mobile market and have had a hard time making games people really like. They make up for it with marketing spend, but it's not like people aren't playing games like Tiny Wings because they can't pull themselves away from Mass Effect: Infiltrator.

If you mean mobile publishers like Chillingo et al then there's absolutely nothing stopping these guys from having a publisher like that pick up their game. There are pros and cons to doing so, but I doubt these guys would have any problem finding a publisher with the number of d/l they're getting.

"And amateur hobbyist artistes (who have "that vision thing" and are willing to starve to deliver it for free)." -- I'm not sure who these people are, but if you mean part-time developers flooding the market with low quality, free games, that only hinders visibility in the app stores. App store visibility as a sales tool was a fluke of the birth of these app stores and is now gone, never to return (although people are still seeing those effects in the Android markets). The amateur, as in most markets, has very little effect on the market as a whole.

If you're talking about developers with vision -- say the developers of Braid or World of Goo or say Notch -- these people don't work for free or hurt the industry. I'd say they elevate the entire state of the industry and turn more people onto games.

These guys should definitely learn the business side of what they're doing but it sounds like they absolutely should not stop making games.

I'm all for taking a smaller paycheck, or running a business that pays below your market salary, to do what you love. If you're only putting yourself out, and you can keep it up, then by all means live in a shack, or your car, if you prefer that to what you would have to do to earn more.

But at the point where you're taking money from your parents, relying on your friends' hospitality and giving them nothing in return, you have failed; give up and go get a real job.

Sometimes we broke the rest of the market, sometimes we captured a really big piece, sometimes we had to give up and do what they all do.

Depends on the context, especially considering the opportunity costs of having a higher paid job.

The problem is that everyone thinks that you have to price games low to sell them. I regularly pay more than $5 for iPhone/iPad games if I know they're good. Hell, after years of paying through the nose for handheld console cartridges, even $15 is cheap to me.

Yes. I think the tough part when you have a higher priced game is getting the word out there and getting written up in some major blogs.

Personally I consider $1 or $2 games to be disposable. It's not much of a loss if they suck. Once you go into higher price points, I base my purchase decision on name recognition/reputation or word-of-mouth.

Not exactly a failure story (their strategy eventually paid off I think), but certainly far from the big hits.

1) Bitch about not making enough money because you boned your conversion funnel.

2) Get an article written about how you don't make enough money

3) Make money!

Don't try this at home.

>>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%.

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...)

They cost you money if they use your servers to transmit game info.

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.

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.

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.

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.

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.

This case was a simple failure to make the right business decisions and nothing more.

That's how you end-up on the street and broke.

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.

3) The few times I experimented with IAPs, my conversion rates were also total crap.

Making niche games actually strongly resembles more "serious" software products, because you have a group of potential customers who have a decent idea of what they want and a market that isn't providing it. If you're lucky, you'll find pages and pages of forum posts describing the sort of things they like.

Expecting to make the next Angry Birds is stupid. But making games with the expectation of a decent income is entirely realistic, and just requires the same marketing skills as anything else.

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.

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.

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.

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 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 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.

Ads!

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.

-Greg

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%.

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.

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.

Made near all users sound like Scroogeish tightwads. Unfair."

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.