This article is intended for those who are evaluating the iPhone platform as a primary or additional area to apply game development skills. Information contained in this article is getting outdated with huge speed because of the enormous “volatility” of the AppStore market. It became outdated several times even in the process of writing this, so I had to revise text while writing.

Greetings!

So you have decided to create iPhone game(s). What can I say about the iPhone games market? It is dynamic. It is strange and wild. There is powerful competition, and what is important that level of the competition does not match the amount of cash. Tastes and preferences of the audience change with great speed. New trends emerge every week, and you never know where the market will turn next time.

iPhone users quickly got  crazy about games with an accelerometer, but also very quckly they got bored with the trend. There was a time of wild “puzzle” popularity- and it passed fast . Success of Fieldrunners awakened interest in the genre of Tower Defense, where almost all the clones failed. One of the new trends – games that seem to be drawn on a piece of school paper Doodle games. Casual games did not sell well for almost a year, but now for no apparent reason suddenly began to enjoy success.

To win or not to win?

Like any market there is a Winner, but there are losers. A small amount of the firsts with their success stories have generated a lot of wannabes, who want to repeat the success. Their number is growing and progressing, thanks to relatively easy access to the market. But what is the percentage of them being successful? SMALL. Only 1% of games received a relatively decent money (with constantly increasing number of applications in AppStore, this percentage decreases every day). In the category .99 more or less successful can only be games in the top-50. Only a small part of the top-100 receive some reasonable revenues above $100,000 or those games which have a purchase price of $5 and above. At any particular moment in the AppStore there are at most 50 really successful games, or about 0,1% of the total number of the released applications. From a statistical point of view there are more chances to win in the roulette. In the whole history of App Store, that is a bit more than a year, there were perhaps 20-50 games-millionaires (with revenues above one million). This seems a lot, but if you take into account the number of registered applications – more than 60 000, the picture becomes somewhat less promising.

BTW, the top-50 list in the AppStore is shared between games and other non-game types of applications. The game category also has a top-list, but the main top which user see on device – does not have categories.

To be fair I should mention that almost every game, or a strong game with a strong brand falls into the top. But not all were held there for long enough to at least break even.

Off we go!

The best strategy for winning at the moment is to release something that does not exist yet on the iPhone platform, but in addition to this it should potentially appeal to a large part of the audience (ideally, equally interesting to both men and women). To increase the chances of success, this “something” needs to sell for 99 cents, but then the maximum of what we can expect a few hundred thousand dollars. This is a theoretical maximum, do not take this figure as given, this maximum can be only reached by select games.

However we should remember that at this very moment, each of the tens of thousands of registered Apple developers is likely making clone or porting some popular game, or idea. If you think that this is a good idea to make a clone of some game, remember that there is a chance that a few dozen people may be already working on it and they may reach finish earlier than you will. Those who will come to finish second, will receive an order of magnitude less money than the very first.

Robert Shackley wrote a sci-fi story “The Necessary Thing” about copy machine that was able to make a copy of any thing, but only once – after doing it for the first time it was losing interest in doing it again. Similar behavior is demonstrated by iPhone owners: buy everything, but only one in each genre, only one game with the same gameplay. To get them to buy anything similar, the game must have something very interesting, or quality of the game must be much much better than in competing games.

Who is doing well?

Small or medium-sized teams, producing simple, cheap (1-3 dollars) but good quality games are doing best of all on the iPhone market. The market is so saturated that at “9.99″ almost nothing can be sold – even the brand name games such as Terminator, Resident Evil and SimSity fall down to the 5-6 dollars price range, and even at this price games can be hard to sell. Over the past six months, probably only one game with “9.99″ got to the first place on the top – Sims 3.

Sometime ago, users have expressed their interest in the expensive, high-quality games, but the situation is changing constantly, and this is the current trend – eigther the game is worth less than $ 6, or it fails. There are too many games! If you offer a game for $ 5, someone “around the corner” is offering a similar game three times cheaper, and the user select quantity, not quality. I bought an excellent game for 1 dollar, they argue, why should I pay 5 for Terminator Salvation, or Simcity? Popularity rating, which considers volume, rather than revenue, only contributes to this situation.

However, we must remember that selling the game for $ 9.99 outside the top 100, you can earn more than being in it with a price tag «99c».

Prospects

The prospects of the iPhone platform are unclear at the moment. On the one hand, the install base is growing, approaching the install base of some consoles, and  most probably will continue to grow – for phones and players demand is constant, plus the new models are continuously coming out. On the other hand, there is an over-saturation of games and applications. The top is too small to accommodate all the interesting games that are getting released at any particular moment. Revenues of the games in Top 10 are not growing, despite the fact that the number of the devices is growing, it might even fall (probably due to seasonal fluctuations).

About 50 new games are getting released in the AppStore  each day. If we will consider only paid games it will be half of this amount, but it is still too much. Most of these games are awful. However, the quality of games increases with the time, and they clog the channel.

In general, there are a LOT of good games. Starting with the recently released Space Age and ending already mentioned Terminator Salvation, Sims 3 and SimCity. Now imagine what would happen if tomorrow Sega will start publishing Sega games from Sega Megadrive at the 1 per day rate? The is not hard, they can do it with emulator or when all casual game/flash developers (looking at Sally’s Spa and Peggle first place App Store) rush to port their hits? Considering recent announcement from Adobe about auto porting from Flash to iPhone native, the threshold for porting games will be very low. Also if we take into account ports of successful in the past 20 years PC games, products of “cross pollination” with the PSN / XBLA / WiiWare, with mobile games consoles, mobile games remade and PDA games. App Store may explode in the near future.

Fresh story: the major developers has started price wars. Even Gameloft, who claimed that he could not afford to sell games for 99 cents, since it produces good quality products, already stepped into this self-destructive path. Selling Let’s Golf, Asphalt 4, and especially the Hero of Sparta for 99 cents (originally a $ 10 game), it violates Gameloft’s own key principle: “buy mine because it is better quality and the game will not get any cheaper.”

On the other hand

iPhone AppStore is a real, live market, where you can have a “profit” and develop games with thorough planning to return your investment and make a profit. It bears no resemblance to the dead-bodies such as Windows Mobile, Palm OS, Symbian, Gizmodo or Gp2x. It is ten times better than the Blackberry or promising, but yet barely live Android. It is more interesting than the PC-shareware non-casual format. It is less than the market for handheld consoles, XBLA / PSN, casual PC, but at the same time quality requirements are much lower and the threshold for the entrance is almost absent.

iPhone-games market can be used as a test platform for multiplatform projects, or as another platform for “crossplatform product.”

What should we do?

So, which projects can be considered on this platform, and which can not under any circumstances? Let us give a brief summary.

Avoid:

• puzzles of all kinds, too many.
•  Racing games, too many.
•  Strategies, not too many in AppStore, but they do not sell well
• Casual games in general, those will soon be too many, but the hits will be rare.
•  Platformers.
•  “Retro” style at all.

Do not do:

• “Match-3″ and other schematic / table based mechanics.
•  puzzles with numbers.
•  Turn-based strategies.
•  Tower Defense.
•  Multiplayer only games. Though you might consider IMO.

Make:

• Simple, exciting arcade games, fit well with the iPhone ideology.
• Casual survival games with a short, less than 5 minutes game session, with infinite levels and clear competitive factor.
• “Steep,” Cool game with great production value, amazing, inspiring (sold, but there is a danger not to return your budget).
• Unique, but an interesting mechanic, wrapped in a popular setting, with dynamic gameplay.
• Get plenty of shooters,
• It is nice to use colorful «cartoonish» graphics, but it should not be too «childish». Happy Three Friends – a good example, someone who will release a game under this brand and this cartoon, with characteristic humor, if it can overcome the control of Apple, will get success.
• “Right” genres – slasher, action-RPG, shooter.

However, success is possible and in a more “quiet” genres, but it is harder to reach

How much?

So, let us play people’s favorite game – count other people’s money. Open data:

iShoot – $ 600 000 for the first month of sales.
Trism – $ 250 000 for 2 months.
Enigmo – 840 000 copies sold for all time.
Pocket God – 1 million copies.
Koi Pond – 900 000 copies.
Flight control – 1 million copies.
These are few of the most popular applications, which held the top spot for more than one day (perhaps except for Koi Pond), and even sometimes for more than one month, as is the case with Pocket God.

On the other hand, the average game is sold somewhere in the 2 copies per day, and old hits (like Trism) – 10-50 copies per day.

What you need to know about App Store

1. It is unstable. Only a few manage to stay for several months in one position. In order to reduce the fall or turn it into growth, there must be some additional factors – the release of lite-version, update of the application (helps a little), decrease in prices, powerful PR (on TV, in newspapers, magazines, on YouTube etc.).

In reality, the level of daily decline is equal to 5-15%. This means that the program will lose an average of 5-15% of sales each day. The higher it is in the rating, the greater the fall, and vice versa. The more “casual” game is, the less decline rate it will probably have. Hardcore and successful gamse dumped fastest and casuals can keep for months (like Bejeweled, for example).

2. Weekend (Saturday and Sunday) bring an average of 20-30% higher revenue than weekdays.

3. For every 50-100 sales in the U.S. App Store, approximately one customer writes a review (with text). However, this depends on the game: for casual games there are fewer reviews. For non-gaming applications, as a rule, reviews written even less than for casual games.

4. Rating in the App Store is on the sly weighting function. It just takes into account sales for the last 3 days and at lower weights includes the earlier data, so there is a certain inertia and the lag. For example, with sales below the minimum for the top 100, we dumped (somewhere in the place from 30-40) over two weeks, losing every day, 5 to 10 positions in the list.

5. Most interesting countries in terms of sales (sorted in descending order of interest): United States, Britain, Japan, Canada, France, Germany. The rest put together – is less than 10% of sales. The United States is usually 40-60% of all sales, and sometimes can reach up to 90%.

6. “Apple” itself selects the program that it wants to promote. These programs receive visibility in the categories What’s Hot, New or banners on the front page. All for free, everything is unpredictable, although the heavy weights probably have some agreements with Apple.

7. Places of 70-100 in the top 100 make about 700-1000 sales in US Store. Places 101-200 – 300-500 sales. The game, which does not fall into the top 20 in its subcategories (eg, games-> action, or games-> strategy) get sold at the maximum rate of 150 copies per day.

To get into first place ranking you will need from 10,000 to 20,000 daily sales for a few days in the U.S. store (or 60,000 done on the same day) depending on the power of the nearest competitor. To keep the first place requires less, but this again depends on who is at second and third place. As of February-March 2009, the first distribution of sales is:

1 st place: 20 000 +
2 nd place: 10 000
3 rd place: 5 000
4.5 Location: 4 000
10 place: 3 000
100 Position: 700-800
8. Generally, growth, as well as a fall,  is cumulative. Reaching 100 (50, 25, 10) provides additional “visibility” and promotes more sales. The loss of these key positions leads to oblivion. Therefore, the timeline in terms of sales is similar to an inverted “V”. Although it is sometimes upside-down U, and even inverted L, but these cases are relatively rare. It is very rare when game after hitting the App Store, completing a cycle of “growth-stabilization-fall, then returns to the top again – this happens only with a sharp reduction in price. If the original price was 99 cents, there is almost no chance to return.

9. Conversion determines everything. With some effort – advertising, discounts, release of light-version, viruses, etc., decent looking game can always get into the top 100. After that everything will be based on conversion – ratio of hits to purchases. All applications for a specific position (say, a place in Top 50 of 100) have approximately the same visibility, and conversion determines changes on this list. Yes, short-term momentum can be obtained from “external” (Internet) or internal (banners and promotion) advertising. Over 90% of purchases are not based on external sources, but only in the App Store – buyers look at reviews, screenshots, description and price then make their decision.

10. National Stores – interesting indicator for popularity of the project. Yes, they provide only a few percent of the market, but they are very interesting in terms of flexibility and activity, because the total amount of sales is comparatively low than in States. As a result game goes to the top faster and falls earlier. These stores are the immediate future of your project in the US App Store.

There is one exception from this rule: the second-largest store — British. It behaves specifically, and perhaps even less active than American. Conservative British users are slow to react.

11. Sales reacts to the price changes with great elasticity. One just by increasing price from 1 to 3 dollars we had sales to fall exactly 3 times. However, on some occasions decrease in price from 10 to 5 dollars can not produce results. This is not a strict rule, but most often happens that way. On the other hand, there is a recent example Peggle: reduction of prices of 4.99 to 0.99 allowed to rise with the 60 th place to 1, increasing thus the number of sales by at least 1000% for a short time.

12. Review of the program by AppStore testers takes from 7 to 10 days, depending on the queue length. The same thing happens with updates. If you are on the 7 th day of waiting found a critical bug and decided to replace binary, you go to the end of the queue.

Instead of conclusion

Moregames Entertainment team is doing great, creating games exclusively for the iPhone platform. From three projects produced by us one is paid off (or rather, porting of the project was paid off) and brought profits, and another was very successful (with respect to this market). The third project is in free swim only for a short time, has suffered from price wars, but generally it is quite successful.

App Store is not Eldorado, but it is the platform on which you can get positive returns. Perhaps this is one of the most profitable in the ratio of income / expenses platforms at the moment. However, thousands of the projects will not be successful.

About myself

I am Pavel Kuprianov — working in mobile industry for 5 years. All this time I was a member of a small independent group of developers working as main and sole programmer and game designer of all games released under the brand Moregames Entertainment – 6 games for Windows Mobile and 3 for the iPhone, including iDracula game.