In last week’s post we discovered that Taplous makes almost $1 million a month from its in-app revenue model. (i.e. The basic game is available for 99 cents, with extra music packs at six songs for $2.99, or two songs for 99 cents). (See TUAW Interview: Andrew Lacy of Tapulous on Tap Tap Revenge 3).
Today, TechCrunch has reported that, after 3 months of chart topping sales in the App Store, Tapulous has now made its best selling iPhone game available for free. (See Tap Tap Revenge 3 Downloaded 300,000 Times First 24 Hours After Going Free).
Why is it doing this? Well as Erick Schonfeld points out.
“The shelf-life of an iPhone app is so short that it makes sense to sunset a paid app early to help push sales of a newer game.”
Alternatively, as Business Insider’s Dan Frommer suggests, the reason may well be that now Apple allows free apps to include in-app purchasing for virtual goods Tapulous believes it will make more money selling songs than selling games (see ‘Tap Tap Revenge 3′ Going Free Today As Tapulous Bets On Virtual Goods).
“[After all] free apps are several times — maybe around ten times — more popular than paid apps”
So the assumption is if 1 in 30 freemium downloaders purchases a 6 pack of songs then Tapulous has broken even by going Freemium. These are probably pretty good odds given the nature of the game play and the target audience.
It would appear that, for Tapulous at least, the recipe for success in the Apps Store is to role out a new product every 90 days and to use Freemium as both a promotional platform and a barrier to entry to new entrants into your market.
The move by Tapulous to take a top selling paid iPhone game and repackage it as a Freemium offering tells us a lot about the economics of the app store. (See Watch out! iPhones have long tails too.) As do the industry rumors of them exploring the possibility of putting ads on the menu.
Perhaps all this means the margins on the best selling iPhone apps are not as profitable as some earlier reports have suggested?
In the short term it provides us with an insight into the lifecycle of a best selling iPhone Game and the inherent obsolescence of the medium. As I have said before mobile phones are more of a Fashion Accessory than a Media Platform.
Looking forward it raises big question marks over the viability of the iPhone apps store as a games publishing model. After all we have already seen on the web how giving away the node (i.e. the web browser) doesn’t necessarily mean you’ll benefit from selling the data (i.e. the content) in the future. In the end it may well be that all the iPhone games publishers will be looking to put ads on the menu in their attempts to make it pay.
Sadly, if that happens then it will definitely be a case of Game Over.
[Update 28-12-2009] Business Insider reports that
Since dropping its price to free (from 99 cents last week), Tapulous tells us it’s had 2 million downloads of “TTR3.” On Christmas alone, it did more than 700,000 downloads, more than triple the 200,000 that the current “Tap Tap Revenge” did last year.
[Updated 26-1-2010]
Here’s a post describing the lifecycle of a not so best selling iPhone game.
Flower Garden generated a bit over $21,500 over a period of 10 months. I would hardly consider that an entry-level salary, much less in California, but it’s enough for someone without a family or mortgage to (barely) make a living. – Making A Living (Barely) On The iPhone App Store
See also Dan Grigsby’s App Store Heresies: Higher Price, Better Ratings. Don’t Discount Your App At Launch.
Related posts on the topic of iPhone Games
- Watch out! iPhones have long tails too
- So just how much money can you make developing iPhone Games?
- The Killer iPhone App?
- Why advertising to people on the move won’t be the next killer Mobile App
- So how much do you think you can make from a top selling iPhone game?
- Finding your way to the top of the App Store
- Even the games developers are discovering that online… Analog Dollars equals Digital Pennies.
- The long tail of online game development
[Update 9-10-2010]
“Lord of the Rings Online has doubled its revenue and created over a million new accounts since going free-to-play early last month. That’s the second MMO Turbine has taken from a paid subscription to a hybrid microtransactions-based business model, with Dungeons and Dragons Online doing the same thing last year” - Lord of the Rings Online doubles revenue since going free-to-play
Tarun Gupta
February 5, 2010
Dayanidhi is coming this February to India’s first and independent annual summit for the game development ecosystem – India Game Developer Summit (gamedevelopersummit dot com) to share the experience he gained while meeting the challenges in building a team (from scratch to the current size of 150), setting up processes, building and maintaining automation tools to achieve best possible productivity giving benefit of optimised time-to-market to the organisation operating in the worldwide market.