App Icons are Itty Bitty Banner Ads

An old blog post I wrote last year about a decades old humor article on icon design is actually remarkably relevant to today’s App Store market.

Years ago, Apple published a developer magazine. I don’t even remember the name of it, but it covered various topics on programming on the Mac or Apple II, but it would also occasionally have humor articles. One in particular stuck with me.

The author said that when you are getting ready to start developing your application, the single most important thing to do is you need to develop a killer icon. The desktop icon could make or break your application and it really should be your first priority.

As humorous a suggestion as it was, I think what I found most amusing was that there was a slight bit of truth to it… or at least it didn’t come from that ridiculous a place in the mind of the developer.

As much as this was a big joke for Mac applications, I think it’s a pretty accurate view of the importance of App Store icons. I’ve often been asked my opinion why certain games seem to just take off in the App Store. Some seemingly simple games just seem to rocket to the top. What could it be?

While the type of game is certainly important, it seems pretty clear that a good icon and a good screenshot are the main impact you have on casual App Store shoppers.

The same question can be asked of what causes an app to skyrocket to the top 10 when featured by Apple? Apple is basically giving you an itty bitty banner ad in the most trafficked area of iTunes and your icon is what represents your app. It seems obvious this is going to make a difference in attracting potential customers.

These suspicions were corroborated by one small focus group study of iPhone usage published late last year. Comments by this small group of individuals indicated that icon design was pretty important in deciding what app to get:

icon

I think that many developers have already realized the importance of their icon but are they really looking at it as scientifically as they could?

I’d think that a really serious iPhone developer would spend time working on a variety of icon designs and try to figure out which has the highest click through rate when lumped on a page with other icons.

These sort of A/B testing trials are done all the time with regular banner ads. Click through rates can vary substantially between different banner designs. And the most clickable designs aren’t always immediately obvious. For example, color choices alone can make a big difference in banner ads click through rates. And when dealing with featured App Store positioning, I’d think that a small percentage increase in click through rates could make a substantial difference in sales.

I’m not sure where such an experiment could take place, but it does raise some interesting possibilities.

Posted in Apple, Business | 15 Comments

Followup on Another Quitting Story

A couple of months ago I mentioned a husband and wife team that made up Imangi Studios who I met at GDC. Keith had quit his full time job a year prior while his wife Natalia had just given notice in April to go full time on their small but growing iPhone app business. In my post I mentioned that I thought it was great they were going into it full time and that the potential benefits outweighed the risks.

Well, it’s only 3 months later, and they have a top 10 iPhone app (and climbing) with Harbor Master [$0.99]. The game is currently sitting in the #6 spot of all paid iPhone apps. Now, I haven’t seen top 10 sales numbers lately, but I’ve heard the numbers have been increasing, so I’d guess they may be up to 10,000 (~$7000) downloads a day. The game seems to have sold well from the start, but Apple’s also currently featuring Harbor Master in their “What’s Hot” listing. Of course, those listings tend to only last a week or so, but from what I’ve seen games that really take off with the exposure don’t tend to drop off sharply when the listing goes away.

Hopefully, their success will sustain, but even if only for a short time, they’ve certainly proven that they have made the right decision. I don’t know the details of their development cycle and marketing, but would Harbor Master‘s success have happened the same way if Natalia hadn’t quit her day job to devote her time to Imangi? I’d wager not.

Posted in Business | 6 Comments

A Year Later…

So, it’s already been a year since I quit my job and dedicated myself to web projects, and it’s gone really quickly. I’ve kept myself very busy during that time, probably a bit too busy. I have absolutely no regrets with my career switch and have been incredibly happy with the decision.

One good thing to note is that the economic conditions seems to have had no major effect on online ad revenues. It’s always hard to tell on a month to month basis due to seasonal variation, but our year-to-year numbers have been up. IAB claims across the board numbers are down 5% in Q1 2009, but that seems a marginal decline when there were predictions of 50% drops by some. In fact, one of the biggest doom-sayers, Nick Denton of Gawker Media, reports that their revenues were up 35% year over year. Anecdotal reports I’ve heard from other publishers have reflected the same experiences. While there may be more declines to come… so far, so good.

The growth of TouchArcade.com has been remarkable, and is the primary reason my time has been so occupied this past year. Keeping track of App Store releases really is a more than full time job. The time I’ve had to put into it has reduced the time I have had for MacRumors improvements and AppShopper feature progression. It also put on hold any other grand projects I might have had. That said, its success is not something I can complain about. I suppose I’m not entirely surprised that it was able to gain traction, as I feel iPhone gaming is an incredibly addictive topic… but the rapidity of the growth is surprising. In just a year, in both traffic and respect, the site has done more than could have been expected. (I even interviewed Carmack the other week — how crazy is that?)

The major goal of mine over the past year was the outsourcing of more of my work. It’s been a hard transition for me, as I have a lot of personal ownership in my projects — so it’s hard to hand over the “keys” to someone else. Obviously, no one else will do things exactly the way I would, and it’s just a matter of getting used to that. As a result, it’s taken me this long to finally hire the right people. Fortunately, over the past 6-7 months, I’ve managed to hire two people to handle the editorial responsibilities that can be so time consuming, and one person to handle programming. The transition is still ongoing, but I’m really happy with the extra time it should afford me. I may actually be able to keep up with my email now.

Looking forward, I still have progress to make on freeing up more of my time, so I can focus on larger scale issues as well as new projects. I think my difficulity in transitioning editorial responsibilities smoothly has taught me to get others involved at a much earlier stage. So, I’m not planning on ever starting another content site where I would be the primary writer again. And that’s no big loss for me. As a computer science major, it still amazes me that any sort of writing has become a major aspect of my occupation.

We’ll see what the next year holds. I think it will likely include some new hires, some major feature improvements to the sites I already have, and possibly the launch of one or two major new sites. There are a few sites that have been on my todo list for years now, so I’m anxious to get serious work done on them. Unfortunately, it will probably be a number of months before I can get caught up enough to seriously start on them. Next year’s update will be interesting.

Posted in Business | 18 Comments

Followup on the State of iPhone Gaming: The $0.99 Economy

A couple of months ago, I wrote about how the state of iPhone gaming was changing with an influx in bigger studios with smaller and smaller pricing margins.

Things have gotten even more competitive since with Gameloft and other studios drastically cutting their prices on older games down to $0.99. While this is good for consumers in the short term, the long term effects are potentially more troubling. There is a constant debate on TouchArcade as to these long term effects. One camp says that the App Store must sustain higher priced games in order to promote more quality titles. The other camp disputes this. I’m with the former camp, as is id Software’s John Carmack. In an interview, he said:

If [iPhone] games could have a reasonable shelf life at $9.99, you will start seeing multi-million dollar development budgets as the market continues to grow. But if it turns out the only way you end up being successful on the iPhone is games that cost a couple dollars, you’re never going to achieve that parity with the other handhelds.

One major effect of this $0.99 economy has been seen by EA’s announcement that they have created a micro-studio within the company to produce casual $0.99 iPhone titles. These titles are going to be in development just a short time (a month or so), presumably to recreate the success of some of the most popular games in the App Store, which also happen to be $0.99.

Let’s think about that for a second… EA is putting resources into low-risk casual $0.99 games. But imagine the flip side to this: What if EA had announced they were creating an division just to produce high quality iPhone original titles? Imagine big-budget original iPhone games with the resources of a major studio behind them.

Could it happen? If there was enough money in it, I’m sure it could happen… but it’s not going to happen at a $0.99 price point.

Now, I don’t blame consumers for buying $0.99 games, nor do I blame studios for following the money. But I do think the long term effects are going to result in a market of two types of games. 1) inexpensive casual titles and 2) inexpensive ports from other devices. Meanwhile, deep, high quality, iPhone original titles will become more and more scarce. Of course, the market will balance itself out over time, and opportunities will appear for developers to fill the gaps. I do expect downloadable content will result in more episodic apps with level packs and add-ons.

Indie developers are also going to be squeezed out further. There are only 100 spots in the top 100. Flight Control, Pocket God, Fieldrunners and Koi Pod pretty much have permanent spots. There are a few Chillingo titles that are on $0.99 sale that take up another 3 spots or so. A few major titles, a few novelty apps, and now EA’s $0.99 game of the month, and you’re down to fewer and fewer spots that you are really competing with.

Meanwhile, Apple is the only one with the power to really change the dynamics of the market through changes in the App Store rankings… but I’m not sure if they will. It’ll be interesting to see where things go from here.

Posted in Apple | 26 Comments

The State (and Growth) of the iPhone Gaming Market

Apple’s App Store is growing leaps and bounds with over 1 billion apps downloaded and the single largest app category is games. While Apple has not broken down the # of downloads per category, based on a quick look at the top rankings, I’d guess that the majority of downloads on the App Store are, in fact, games.

In running a large iPhone gaming site, I have a somewhat unique perspective into the market, and there’s been a notable shift in the market in the past month or so.

To give some background, the iPhone app market is competitive. There’s been a lot written about what it takes to get to the top of the App Store. In the end, it’s all about exposure. Whether that exposure is through the App Store itself or through review sites, it’s a pretty key component in a developer’s success. While several small “indie” developers have been able to successfully make it big in the App Store, there are, of course, hundreds of developers who have been unable to. Some of those developers have been more vocal than others over the course of the year about issues of fairness about coverage on reviews sites, and whether indies really do have a shot.

In the past, I’ve generally dismissed these complaints, as I didn’t necessarily think they held that much merit. While there were a lot of games being released into the App Store, I felt the majority of them weren’t worthy of coverage and very few really truly deserved to be a success. In the end, I felt that most developers needed to realize that their games were not as good as they thought they were, and their lack of App Store success wasn’t necessarily reflective of a flaw in the system but perhaps of the appeal of their game. I guess I believed the cream would rise to the top.

The reason I believed this was that despite the massive number of games coming out, I felt we could actually keep track of all the games coming into the App Store. Through our forums, and by playing the games ourselves, I felt like we could pick up on the games worthy of coverage. It was a somewhat tedious process, and I think we might have played 20+ games for every game we thought was worth covering. We also would try to play every game that would be sent in to us.

So what’s changed?

Well, clearly the volume of games appearing in the App Store has increased. But that’s not necessarily an insurmountable issue. While I don’t feel I can personally play every game that comes out, this is the sort of thing that more manpower can be thrown at, and we’re making adjustments to try to address that.

The biggest change, however, is the influx of mid-sized to large developers who are invading the App Store space. Companies like EA and Gameloft are really ramping up production of their App Store games. In March, EA announced 14 games coming in 2009. That’s a new EA game every 2 and a half weeks being released. Gameloft has ramped up their production as well and seems to be releasing games at least as aggressively. And these are high quality titles.

Ignoring those big players, a number of other serious small to mid-sized development firms have turned their attention to the iPhone. Glu is a mobile gaming company that has started releasing original titles for the iPhone as well. They’ve announced 5 at GDC and are planning more. The list goes on. Ngmoco, Freeverse, Digital Chocolate, Artificial Life, IUGO etc… all have multiple titles coming to the iPhone this year.

So What’s The Problem?

Well, for the serious gamer, there might not be a problem. The number of high quality games coming to the iPhone is increasing by leaps and bounds. For the smaller developer, however, it introduces a number of issues.

First of all, the quality level for gaming has been continuing to increase while the prices of games continues to drop. Major developers have been adjusting their prices downward in order to find the right pricing. At this point, I see $4.99 as a bit of a ceiling for quality no-name brands. If you price yourself above that you’re competing directly against Gameloft and EA titles. And the problem is that margin is getting narrower.

I think the bigger issue, though, is one of exposure. There’s only so much attention that gamers are going to have, and they are going to be naturally drawn to the big name titles.

From a news and review site perspective, you’re competing for attention against some major titles. This past week alone we saw the releases or news of Boulder Dash, Need for Speed, Sims 3, Top Gun, Star Defense, Mass Effect, Tiger Woods PGA Tour, Myst, Siberian Strike and more. Those are titles that occupy the time and space of gaming sites. While story posting volume can increase to some degree, I don’t believe it can (or should) go up too high, as otherwise you’re losing the attention of the people you want to be exposed to.

That’s not to say all hope is lost. Fortunately, the iPhone gaming audience continues to grow, which means the absolute amount of exposure for a smaller game may actually be higher today than it was 6 months ago. However, since the numbers are up across the board, that may not help as improve App Store rankings as much as it has in the past.

Posted in The Web | 15 Comments

The Risk and Economics of Quitting

This year, I traveled to the Game Developers Conference (GDC) for the first time. It was a really great time and I met a number of iPhone gaming developers — many who I’d known online for many months.

Despite my outsider status, it was great community and a very entrepreneurial one. The explosion of the iPhone App Store has really put financial success within the reach of the indie developer. I spent a fair amount of time hanging out with Imangi Studios husband and wife team Keith Shepard and Natalia Luckyanova. Keith had quit from his day job almost a year ago, while his wife has just given notice so they could pursue their iPhone game company full time.

I think it’s a great move, even in this economy. They clearly have a growing business and have the opportunity to do what they love. There is some inherent risk involved, but the lost opportunity of not pursing it is simply too great.

Yet, it still constantly amazes me to read comments by people don’t seem to truly understand the risk/benefit balance in making such a decision, and put too much weight on the “safe” choice (which may not actually be the safe choice).

The biggest success story to date is one of Ethan Nicholas who developed the iPhone game iShoot. iShoot generated Ethan over $200,000 in one week and has since generated over $800,000. Ethan didn’t waste much time in quitting his day job as a programmer. And yet there are even people who have criticized Ethan for quitting his job, suggesting that it was not the “safe” choice.

I think in making that decision, there are a few important factors, and I think Ethan’s choice to quit was by far the “safer” choice. Factors to take into account include:

1. Replaceability of your current job
2. Income of your current job
3. Income of your side job
4. Potential income of your side job
5. Happiness

In Ethan’s case, by staying at his (est. $100,000/year) day-job, he puts at risk his ($800,000/5 month) salary. The potential income for iPhone programming business is even greater and essentially has no limit. Even given the economy, I’d say his job as a programmer is reasonably replaceable. And in the end, he is much happier for the switch. There is also a once-in-a-lifetime opportunity factor in place as well. How many iPhone developers have a successful app? Now’s the time to invest in additional updates and followup games to take advantage of the momentum.

And if you don’t agree with that, would you suggest that someone who is making over $100,000 on their own business to get a 40-hour/week minimum wage ($15,000/year) job in an attempt to add more “safety” to their income? Because it’s essentially the same argument.

Obviously, this is an extreme example, and I suspect I’m preaching to the choir on this blog, but it was a topic that has been on my mind.

Posted in Business | 11 Comments

Online vs Print, and the Evolution of Media

Here are a few random thoughts I’ve had recently about blogging, online media and traditional print media.

Online Ads vs Newspaper Ads

Here’s a promising chart for all online-media folk published by Alley Insider.

Newspaper ads dropping, online ads keep growing… and they it looks like they’ll intersect in a few years. It’s no surprise, but interesting to see in chart form. So, good news for those who depend on online ad revenue.

Blogs vs. Mainstream

Like many, I do vanity-searches on my own name from time to time. One article that I ran across late last year was written by a journalist by the name of Amy Eagleburger. She wrote an article about how the mainstream media has been slow to adopt online and blogs. Nothing particularly groundbreaking but an interesting comment about MacRumors:

One of the many complaints from journalists is that they don’t have time to blog and write stories. So why aren’t newspapers hiring more professional bloggers? MacRumors.com is a blog Dr. Arnold Kim started as a hobby. It was so successful that he gave up his medical career to blog full time. He’s not just a guy in his pajamas but someone with a knack for news gathering. Why did that blog not start at a newspaper? I’ll admit that when I wanted to read about the new iPhone, I went to Kim’s blog before other publications.

That’s the million dollar question. Why wasn’t MacRumors (or any major blog) started by a newspaper? Or another mainstream media source?

In some ways, it seems absurd. Indeed, if you had asked the same question 5 years ago, the answer would have been simple: there’s no money in a “blogs” like MacRumors. In 2009, however, the answer is entirely different. There’s an enormous amount of money in online media which is becoming increasingly dominated by blog-like publications. And as a result, money is now being invested in these markets.

But besides money, however, I think a site like MacRumors succeeded because it was started by someone who was a genuine enthusiast of the topic and not just going for a paycheck. Especially then, there was no incentive for a traditional journalist to stay up late at night to report on the latest news and rumors. Those stories, if deemed news-worthy, would be published the following day. That fact wasn’t lost on the audience either, and MacRumors generated a reputation of frequently being the first source for news and also the place to connect with others.

Of course, there’s a million other reasons why traditional media was slow to adapt. It’s just the nature of the beast. People stick with what they know. Blog-style news simply didn’t fit into their belief system. Meanwhile, those without traditional journalism training just made it up as they went along.

Posted in Apple, Business | 18 Comments