There is rarely a week going by without articles trying to describe “the odds” of success of publishing an app to mobile app stores. And I think most of those posts miss an important point!
Last week, in this well written piece by Loic Le Meur I found a very interesting quote from an Ars Technica article.
The problem for developers is that a few paid applications do extremely well, and the rest don’t. The top 10 percent of paid applications get about 75,000 downloads. The next 10 percent, just over 9,000. A handful of developers are doing good business on the App Store—established games companies like Electronic Arts and Activision, for example, as well as a range of indie developers—and everyone else is making do with mere scraps.
I know what you think. And what you are supposed to think. What a mess, right?
Well, let’s look into this a bit.
What is success?
A friction I see coming up a lot of time is in the definition of “success”. Talking to Indies, I hear “building a self-supporting business so I can keep doing what they enjoy most”. From the “professional” articles analyzing the marketplace I read “only a few millionaires”, “no 10M+ opportunities” and similar arguments that seem to be grounded in the dinosaur age of VC’s and hyperlarge web projects. A bit like 2005 or earlier, if you know what I mean.
So it is important to note that success is defined VERY differently by different groups.
Making Money
Let’s look at it from a more typical Indie perspective.
First of all, I have to say I don’t care too much about how many “make millions” and not even much about “how many fail”. Especially if one wants to weigh the options of going Indie, the “Angry Bird” or “Doodle Jump” success stories are almost distracting and so are the “I wrote 2 me-too games and they are not selling” failures.
The thing that interests me most and imho describes best how sustainable those new ecosystems are, is the SECOND layer underneath the “most successful”, the layer where devs are not getting rich but generate positive returns on their invested time/money.
And as far as I can tell from talking to other devs, from watching the low turnover rate in my developer circles, that layer is actually pretty healthy. Developers releasing consistently good apps or focusing on a niche, creating the best-in-class app there, seem to have a FAIR chance to succeed and come out within that sustainable layer of 20%.
Wait! 20%? Healthy??
The reason why I’m saying that a 20% successful layer is pretty healthy is simply because this is still software product business we are talking about and that naturally comes with a high failure rate. Always did. In Dan Brinkleys classic book about the early Silicon Valley startups, he states that only 1 out of 20 software startups succeeds, while 19 fail. Read that again. That would mean a 5% success rate!
Another piece of the puzzle is the fact that all app stores are plagued by a rather large number of “crap apps”. I’m making no estimate here but it is part of all those calculations you can read and if you feel you can’t compete with those, then that’s a problem on its own. Honestly, I think the chance of being successful in it’s modest Indie definition for someone who has the skillset and a decent longterm plan is quite higher than 20%.
But in any case, even if it turns out that mobile Appstores would “only” offer a 20% moderate success probability for Indie developers, I would dare to say that is the most attractive ecosystem we ever had in the software industry, hands down beating the odds of a classic Windows/Mac try-before-buy shareware distribution or any other approach that Indie developers so far were able to take.
The not so inconvenient truth
So do you really think, now with two years into the game, that this mass migration to the mobile app world of both Indies that already worked as Indies before, or former employees taking the plunge, is because they can’t calculate the odds of success and should be scared to death facing those 20% success rates?
- I firmly believe that we see a rather healthy strong layer of apps making money below those success stories you read about
- Even if it is only 20%, this is paradise compared to any alternative
- Success is defined very differently by different people, so take every discussion with a big grain of salt and make up your own mind what you will call successful
Don’t get me wrong. This is far from a guaranteed success. Far! Lot’s of failures are happening, many undeserved. Many things can go wrong going Indie. What I am saying though, if you COMPARE today’s chances to create your own small success to earlier days, today’s modern app stores make your chances better than ever before in computer software history!
How big that chance is for you and your very personal circumstances is up for your own judgement.
Let me know your thoughts and if you find an article highlighting that second “below the rich” layer I’m talking about, please share, those are the ones we should all look out for.
Ken and Gary have found quite promising success in the iPad store with iMockups: http://blog.endloop.ca/blog/2010/08/12/100k-in-4-months-a-niche-apps-path-to-app-store-success/
Though maybe that borders on the higher-level success than mid-level.
Great article Markus. I think you’ve hit on the key point that I’ve been talking about for a while now – sure it’s very, very difficult to strike it rich, but if you set your goals on a reasonable level it is very possible to make this work.
Still tons of risk, but the smart developers have, and will continue to find ways to make it happen.
Thanks a lot Brian. I remember your speech at the IGDA Leadership forum in November 09 and I remember lively how you brought this point across to the audience. And it was interesting to me to sense some reservation from the more classic gaming industry representatives, who seemed to be used to think in much bigger financial numbers. But I think time has substantiated what you said there. What I find interesting is the impact this starts to show on the VC world. And, I would love to see more bloggers explore how big this second layer underneath the “strike it rich” layer really is.
Thanks Markus, I found your article to be very encouraging as I am working towards being an indie product and game developer instead of a just an indie consultant.
Having the right perspective on success is very important towards being successful, whatever that magic number is.
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