iPad Bankrupt?

Discussion in 'iPhone and iPad Games' started by The Lab, Nov 29, 2008.

  1. The Lab

    The Lab Well-Known Member

    Nov 17, 2008
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    Entrepreneur
    Utah
    Is developing games for the iPhone/iPod Touch making some developers go bankrupt?

    Is there really that big of a risk in the investment of developing games?

    I understand the the argument of Jailbreaking the device to get free apps, but how true is the statement of bankruptcy or is this an exaggerated statement?

    Another question how much of an investment is made in making apps?

    Just an honest question cause the comment about it makes me wonder?
     
  2. Chase

    Chase Well-Known Member

    Nov 24, 2008
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    #2 Chase, Nov 29, 2008
    Last edited: Nov 29, 2008
    Well basically, if an app isn't generating enough money, neither are the devs. Remember that devs have families and bills like everyone else and, for some, this is where their money is coming from. This is their jobs. Making and distributing apps.

    And even if you jailbreak and steal just one app, that could be as much as stealing a bag of groceries from them.

    For instance, if one person stole the Beatmaker app which is $20, then that's taking a good chunk of change from the developer's paycheck each month. Now multiply that by dozens, if not hundreds of people stealing that app. Even if 10 people steal a $10 app, that's $100 gone, just like that.

    It really is a crappy fact but, yes, it's true.
     
  3. rootbeersoup

    rootbeersoup Well-Known Member

    Oct 4, 2008
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    But maybe those people would have never bought the app otherwise, is that stealing $100 from them?
     
  4. The Lab

    The Lab Well-Known Member

    Nov 17, 2008
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    Taking into consideration that this whole app system is still young is there developers out there just making a living off of developing apps?

    Did people just see this as an opportunity to leave their 9 to 5 and just build apps?

    Can I hear from some developers on these questions and if they don't mind hear how much they make a month from the app store?
     
  5. Chase

    Chase Well-Known Member

    Nov 24, 2008
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    Yes. Because you should have bought that app. If it's not yours, you stole it. And by stealing that, you stole money from them that they could have made off that particular app.
     
  6. Chase

    Chase Well-Known Member

    Nov 24, 2008
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    Mmhm. If Frand shows up from Secret Exit games, which he might because he visits these forums, he'll tell you that that's what he does for a living. He's said it back at the Secret Exit forums, actually.

    Not all developers are like this, but a lot are.
     
  7. VeganTnT

    VeganTnT Moderator
    Staff Member

    Jul 19, 2008
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    Also, in order to crack an app you have to BUY it and have it running on your device

    So the dev losses potential sales but still make some money

    Also, updates for cracked apps only come when a cracker feels like cracking the patched version

    If a game is really worth it they end up getting the app so they can keep getting those updates as soon as they come out. Other times people want to see if the app is really worth their money.

    So in the same way they may lose potential sales... they also gain sales they might not have had otherwise.
     
  8. PoV

    PoV Well-Known Member

    Oct 10, 2008
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    Oh yeah. ;)
     
  9. Chase

    Chase Well-Known Member

    Nov 24, 2008
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    #9 Chase, Nov 29, 2008
    Last edited: Nov 29, 2008
    Okay, but for a $5 app, that's +$5, -$100 (or more)

    That justification doesn't make sense.

    And knowing a lot of people, if they are enough of a jerk to steal that app, they'd go and look for the update or wait for it. They wouldn't pay for the app if they didn't have to in the first place.

    I know it's cheesy, but would you take a game off the shelf in the store, take it home without paying for it, and then go back and say "Hey, I liked this. Here, you can have this $5 that you now deserve because I decided that I like this game."
     
  10. Frand

    Frand Well-Known Member

    #10 Frand, Nov 29, 2008
    Last edited: Nov 29, 2008
    Yes, bankruptcy is a real everyday threat for indies that are in this to make a living. Let's play with numbers:

    An indie studio has 3 employees, an artist, an engineer and a game designer. Together they handle marketing, bizdev etc.

    Three guys need to pay the rents on their apartments, eat, pay the bills etc. so let's say that they need to be paid roughly $2500 per month each. On top of that the company pays health insurance, office rent and other fixed costs.

    So now your company needs $7500 for gross wages + ~20% for health insurance per month. That's ~$9000 for employee costs. Add office rent, electricity, internet... now you're probably at $10000 - $12000 costs per month.

    Remember that when you start up, you need computers and software licenses. Those can easily rack up to a $10000+ fixed cost.

    If you're only developing for iPhone and you're selling your application at 99 cents, you need to sell ~14000 copies each month (assuming your costs are only $10K, remember Apple takes 30%) just to keep going, much less make profit.

    For most, this is not realistic at all. The only apps that might sell those kind of numbers are in the top 50, perhaps at top 25 in the apps list. There is no average case to quote since it all depends on visibility and popularity. If nobody notices your game, it may sell 5-15 copies per day, globally. Note, we haven't had major success with SPiN to put us in the top 10 in any charts (yet?), so I can't speak for the download numbers there. Rumors say that top 10 apps rake thousands of downloads per day.

    If the app is priced at $2.99, great, now only 5000 sales each month are needed to survive. In other words, about 170 sales per day.

    How much risk can an indie take? Develop an app in one month, three months, six months? That's half a year without revenue coming into the company, so the guys are living off whatever funding they have, be it personal savings, public grants, venture capital etc.

    Let's say a game takes six months to develop. That puts the budget of the game at $60000. Just to make that money back, the game needs to sell 30000 copies at $2.99 before the developers would even see profit.

    I'm simplifying stuff just to make a point, and there are many ways to start an indie company with less risk. But in a nutshell... yes, this is a tough business and many indies can go bankrupt if the game they've developed with their savings doesn't sell.
     
  11. rootbeersoup

    rootbeersoup Well-Known Member

    Oct 4, 2008
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    How can you LOSE money from someone not paying for an app? Your theory is RIDICULOUS. Maybe if Apple charged them for every time someone downloads an app. But they don't. Apps are intangible anyway, even if someone steals them, it's not like there are costs of manufacturing each individual app, much like a console video game.

    Yes, stealing apps is wrong, but you're not stealing money from devs, devs just aren't making as much as they should. Devs pay $100 for the SDK and that's it. The rest is PURE PROFIT.
     
  12. Little White Bear Studios

    Little White Bear Studios Well-Known Member

    Aug 27, 2008
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    I have a day job as a software developer. The App Store is my side job. The second currently pays more than the first.

    The App Store is way too unpredictable to count on for monthly income. I imagine if you have 5-10 apps on the store, that are all reasonably popular, then it would probably be safer.
     
  13. Chase

    Chase Well-Known Member

    Nov 24, 2008
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    #13 Chase, Nov 29, 2008
    Last edited: Nov 29, 2008
    They SHOULD be getting the money for just having the application on your phone.

    And, yes, they could be potentially losing money if they're in the process of developing other applications. They have to pay for developing apps. They have to pay for copyright fees. They have to pay for computers and software. They have to pay employees. That costs money. And that's what people don't understand. And especially if this is their only paycheck. They have to pay bills. They have to buy stuff from the store. That costs money. It comes from the bucket of money they have. They don't directly lose money, but when people take apps they should have and probably could have paid for, then they're losing money every time they have to pay for anything and that bucket starts running dry.
     
  14. Frand

    Frand Well-Known Member

    Don't be silly. Developing software costs money, and profit comes after the investment has been recouped from sales.

    If you play a game without paying for it, you are having an entertainment experience you didn't pay for. You stole it, developer lost money.
     
  15. VeganTnT

    VeganTnT Moderator
    Staff Member

    Jul 19, 2008
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    Um, unless people are knocking down devs and stealing their wallets then there is no -$100. A loss of a potential sale is +0 not a negative.

    That doesn't make it RIGHT, and I don't agree with stealing apps. However I do think there are 2 sides to every argument so I thought I would try the opposing side.

    If an app doesn't have a lite version I have ZERO problem trying out a cracked version. Of course if I like it I'll buy it because I want to make sure the devs are getting support. Cause a sale lets the dev know their time was worthwhile and that I'm enjoying their hard work.

    And I worked at GameStop for a long time. I was allowed to check out games (kind of like a book at a library) I could check games out for as long as I wanted. I only bought games that were worth it.

    Anyone can do this too. Buy a used game and you get 7 days to play it all you want. Anytime during those 7 days you can return it and get your money back (nothing has to be wrong with it, you can say it's cause you didn't like it). You get the money back on a card and you can try another game or go to another gamestop, lord knows there are plenty of them, and buy the same game again. Wash, rinse, repeat til you find a game that you actually want.
     
  16. Little White Bear Studios

    Little White Bear Studios Well-Known Member

    Aug 27, 2008
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    Let's not forget the taxes!

    14,000 copies a month would probably put you around #75-#100 in U.S. paid apps, assuming you also make about 20% of your sales outside the U.S.

    Yes, they absolutely do.
     
  17. Frand

    Frand Well-Known Member

    Considering World of Goo has 90% piracy rate on the PC, and most agree it's an incredibly fun game, I don't really believe the excuses that people only download to try a game out and pay for it if it's good.

    What I do believe is that most people are lazy and don't bother deleting their pirated app to buy a legit one. They already "have" the game after all.
     
  18. Frand

    Frand Well-Known Member

    I was including taxes in the gross wages :)
    And it's good to know those numbers for reference. It's a long way up from top games #100 to top games #50 which might put you at top apps #100...
     
  19. Chase

    Chase Well-Known Member

    Nov 24, 2008
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    #19 Chase, Nov 29, 2008
    Last edited: Nov 29, 2008
    Okay, but not everyone pays for it if they like it. Not everyone keeps that promise. A lot of people just take it because they don't want to pay for something they could just steal and get away with, which is not okay. And not everyone, if they don't like it, deletes it from their phone. They could say "hmm, this app isn't good enough to pay for, but I'll keep it on here because I might play it," and that isn't fair.

    And plus, You're still playing it and whether or not you're enjoying it, that's what you should be paying for. And the App Store doesn't have this kind of thing, but you can't just create that way. If the developer didn't want you to play it before you tried it and didn't put out a trial version, then that's their decision, not yours.

    And plus you're PAYING for those 7 days, and then they give you your money back. And technically that couldn't even work here. You'd have to have someone else delete that app from your phone and give you your money back. Plus, I know people who have taken advantage of it. They purposely buy it so they can play it just for that short time and then take it back. And you know that would be even more prevalent in a place like this sort of community where people are stealing apps anyway. And I know a lot of GameStops don't have that policy anymore because of that.

    I appreciate you paying for the apps you enjoy, but it's unfair for the ones who don't. And you're still illegally owning the full versions of the game to try for as long as you want. Not trial versions.
     
  20. fattychance

    fattychance Member

    Oct 8, 2008
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    I like to support devs that come here...

    So I bought spin.

    Thanks.
     

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