Normalkid:Arnold Kim

Apple’s announcement that they are going to start letting free applications sell in-app content seemed to be a big one. Even game changing.

But, the more I think about it, the more I think there will be great hesitation for many developers (and I’m thinking mostly of game developers) to make the plunge.

Now, some apps clearly benefit from this. Comics for example is a comic book reader that sells more downloadable comics. It was $0.99 before today because they had to be. But now, they are free and will make their money on selling individual comics. Same with book readers, or other similar models. Even a game like Tap Tap Revenge 3 would benefit…. though sitting at the #1 spot at $0.99 makes me think they aren’t going to change their price anytime soon.

So are game developers suddenly going to release free games with add-on purchases? I don’t think so, and here’s why.

Lite versions aren’t always in your best interest.

I know customers want there to be a lite version of every game that exists… but, depending on the game itself, a lite version is not in the best interest of the developer. Lite versions can hurt the sales of a full version. This can be for a number of reasons, primarily that people simply didn’t like the game as much as they thought they would. For this sub-section of games, Lite’s hurt.

Now, if you release a Lite game and find it’s hurting sales. The easy solution? Pull the Lite game. But if your Lite is your Full version too, well, there’s not as much you can do about it, nor will you even likely know it’s a problem.

Lite Versions are a Good Second Push

Most games don’t come with a Lite version on Day #1. This isn’t an accident. Your game is going to get the most press on the day it launches, and you want people to buy it sight unseen.

So, instead, you wait until the game has lost momentum, and release a Lite version then — hoping for a second push up the charts.

Here’s the slow decline in ranking of Gameloft’s Modern Combat: Sandstorm game:

When did they release a Lite version? Yep. 7 days ago. Exactly when their game fell off the top 100 paid apps (dark blue line).

No Promo Codes for in-app purchases

Apple offers free promo codes for people to download full versions of apps. This is the primary tool developers have to promote their games with review sites and forums. Without these, it’s going to be harder to convince people to try your game.

Now, I don’t personally care. At TouchArcade, we pretty much buy every game we consider, but for a small time developer, looking to get the word out, this will be a major handicap.

Charts Matter

The next thing is that the Top 100 lists matter. They drive a ton of sales. Are you better off competing for a spot on the top 100 Free apps or the top 100 paid apps? I’m not sure what the answer is, but top 100 free requires some insane volume of downloads. Most people have focused on the marketing to the Top 100 paid. I’m not sure what drives sales into the Top 100 free, and most developers probably don’t either.

This also makes it strange to release both Full and Lite + DLC versions, in that you are splitting your sales across two apps. Maybe it’s not going to be a big deal, but this is uncharted waters.

Now, Apple has gotten Ngmoco to take the plunge and offer Rolando 2 as a free + DLC game. And a game like Eliminate is a natural fit for this plan.

But, unless there are some real success stories from smaller devs, I’m not sure how much this will affect most developer’s short term plans.

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.

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.