You borrow or have 10 000 $ at your disposal The objective is to take the 10 000 $ and turn a profit (to pay back the loan or to generate income) You are capable of building simple apps for 2 500 $ each So you build 4 apps with the 10 000 $ The four apps are grouped together under one iTunes account Let us say the loan payment is at 10 % per year So you are looking at 1000 : 12 payments = 83.33 $ a month with fees etc. 100 $ a month to make the math easier! You have four apps that need to generate 100 $ to service the debt! 100 $ : 30 days = 3.33 $ a day : 4 apps = 0.8325 $ The math is almost perfect you need to sell 4 0.99. cent apps each day to repay the loan. (One app of each game) If you had the start capital you would make 1000 $ a year on a 10 000 investment. My initial comment that could make this simple math fail is the 150$ threshold before you get paid in a region. The risk is selling four apps a day! Please have a go at ripping this proposition apart> It would be helpful to all!
probably depends on the quality of the apps - some apps only sell 1 a day(or less ). I don't think its a good investment unless you have a solid idea, solid graphics, solid execution, good marketing, or 3 out of 4! Its a very risky business it seems. From what I've been seeing, looks like only a small percentage make their money back, and an even smaller percentage turn a profit. Very few get lucky and make it big. Its probably better to invest in the stock market (as bad as that seems) If the market is seeming to turn up these days, taking 10,000 over the next year could make a little bit of money. I'm not trying to discourage you, just saying that it is a risky situation, unless you just have money to blow and don't care about losing it if it does fail.
bankrate.com's loan calculator tells me the following: Loan amt: $10,000 Interest Rate: 6% Monthly Payment: $99.49 Loan Term: 11.667 years or 140 months. Have to pay off the principle unless you're going the interest only route and hope your asset appreciate so you can offload it to someone else for a profit after 2 years. Oh wait, that didn't work out too well....
I think where this gets a little less straightforward is you can't just start out with 4 simple apps. You need to spend the time to develop them (one at a time), and during that time you still need to be paying rent. This could totally work if the $2500 per app would be your income, and you made the apps quickly. But sometimes there's stumbling blocks to be quick (not the least of which is the App Store approval process). And I've learned that making quality apps actually takes a whole lot of time. And Apple doesn't pay you all that quickly, and even if it looks like you've made a bunch of money, in reality you'll get much less than that in your bank account at the end of the month, because you won't see any money from those 100 sales in Japan until you sell another 150 apps there.
The only money that I have spent so far is for my MacBook and for Unity 3D, but besides maybe a few hundred for artists and the like, that's about it. If I had $2,500 per game that I made, I would save it (of course there are some costs to developing, but it is very possible to do it without spending all that much).
The way I read the OP was that it's an investment, not a job. If you're developing the app yourself, then it's not a passive investment. Your time is not free. If it costs you 1 month + $2.5k to develop 1 app, then the cost of your app is far greater than $2.5k. Outsourcing the entire thing to be developed for $2.5k is definitely possible. I second JoshCM's post. Unless you have some very solid ideas and business skills, there are better investment opportunities.
And developing a good application for the $2,500 is the hindrance. Who is going to do that for you at that price and make it worthy of charging for? If you had the $10,000, it may be more likely that you pay the $10,000 for a single application (A very simple game.) Also, use a % of that amount for good marketing of said game.
compound interest? calculated daily? are you looking at only covering the interest; and not making any reductions in the principle of the loan? JUST INTEREST http://www.moneychimp.com/calculator/compound_interest_calculator.htm $87.47 per month (paid monthly) keep in mind; that you would still have $10,000 debt. CLEAR LOAN (AFTER 1 YEAR) http://www.bankrate.com/calculators/mortgages/loan-calculator.aspx $879.16 per month you will then have the applicable bank fee's on top of this. when you sell an application; apple takes 30%. means you get 70c per game. you would need to sell 5 using your math. JUST INTEREST $87.47 per month = approx $2.91 per day === 5 copies per day CLEAR LOAN (AFTER 1 YEAR) $879.16 per month = approx $29.30 per day === 42 copies per day 7 zones (approximations) US = 40% JP = 25% EU = 12% GB = 8% AU = 4% CA = 4% WW = 7% (remainder) these are Mobile 1UP numbers - you may have different numbers. but, what it shows you is that each region may take some time to build that $150 threshold. the most commonly paid region will be USA. some regions; especially at 5 apps a day (globally) could take up to a year to pay out. just my 2c.. hope it helps with your understanding.
Good apps What I am taking away from this discussion is the risk of creating substandard apps that won't sell. If you are going to enter the risk of the app store with any amount of money, then put your best foot forward no matter how big or small the investment. The biggest problem is you can do everything 100 % right and still fail miserably. You can have the best idea the best execution and still fall flat on your face. Worse of all, you might not have any answers telling you why you failed! A huge risk of time and resources, allowing you to join many others with the same passion and desire.
What's the best price to start? How many ppl will skip your app if it doesn't cost .99? What's the best price strategy?
It's the old "how long a piece of string?" answer. You have to do some pretty creative thinking to make a business a success. Unfortunately, creative accounting isn't the sort of thing I'm talking about - that's something that will get you into a lot of trouble. Cutting to the chase, people will buy all sorts of rubbish, but you can't predict success based on end user whim. The better your product (the more time as opposed to money you invest in it) the greater the chance of a return. I have only one piece of advice: $10,000 is a tiny amount of money for a real business (say, a Limited company). If you're thinking of this as a personal loan, and you don't have a business plan & cashflow forecast: DON'T DO IT. If you need to get a loan to acquire $10k, then it's a lot of money. 12 months is not a lot of time. Try spending 12 months making what you can without getting the loan. Developing apps is fun, but you need to work hard at it. Money in the bank won't make it easier. NEVER pay yourself a wage from a loan. If you need to pay yourself, get a bar job or something - seriously. Just my 2 cents.
I'm going to add one last piece of advice. It's very important that you know your own limits and capabilities. Far too often people come to me quoting figures, statistics and reports from various websites and blogs: Quoting the success of other people is a bad way to start a business, and passionate people have a tendency to look for the positives, almost always ignoring the negatives completely. Success can't be measured by intent, because real success (on a budget) comes as a surprise almost every time, whether it's Tetris, Fieldrunners or a Fart app. It may sound like I'm downplaying the miracle of the App Store and trying to depress you before you've even started, but I'm just trying to temper expectations. Have fun, make some money - do it at your own pace. Know yourself. Kung Fu is more than monkey punching, it's about self awareness. Once last quote: "Follow your own goals, not the competition."
A lot of people are touting the negatives but there's one thing you need to consider - if you have a killer idea and can spend a portion of the $10,000 on marketing the app, then you should really try to go for it. If you need to hire a designer, an artist and a programmer then you have to step back and ask what your purpose is in creation of the app. If you can fulfill all three of the roles, then all you need to do is take the time to make the app yourself and then pay for the marketing. If you can fulfill one or two roles, get yourself a business partner and split things down the middle, that way you don't have to pay them up front. There are a few ways to be successful but dozens of ways to fail. Make sure you have a plan laid out before you go asking for money, and if your plan is to pay everyone else to do the work, get a new plan. Still, if you have great ideas, you can be successful! A lot of the people complaining that the app store is lousy and won't get your anywhere usually don't have a killer idea or don't try whatsoever to market their app (or Apple screwed them, or there are too many pirates, or the release date messed them up, or a million other problems). Everybody touts success as luck when that's not always the case.
Marketing is extremely important. An average game with great marketing will likely do better than a phenomenal game with poor marketing.
