Filed under: Macworld, iPhone, App Store
Macworld 2009: Spawn 2 and the economics of the App Store
Spawn Illuminati version 2 just hit the App Store (iTunes link). If you haven't seen it, it's an amazing time-killer which allows user interaction with something akin to a screensaver on your iPhone. It's a little hard to explain, which is why we have video. You can also check out some user-contributed screenshots on the developer's Flickr page.
An interesting aspect of the Spawn story is the author's success with pricing it above the .99 "sweet spot" after mediocre success at that standard price. The second video is a snippet of Spawn's developer Nikolai riffing about App Store economics. Spawn is currently back to .99USD in the App Store, but only for a limited time. Read on for a demo and some pricing opinions from an experienced App Store developer.
Spawn 2 Demo
Nikolai on App Store pricing
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Reader Comments (Page 1 of 1)
Kira said 3:27PM on 1-23-2009
The idea of ranking based on revenue rather than units sold isn't new; I think a lot of developers are in agreement with it. It certainly seems like a win-win for Apple and developers both. I'll actually be surprised if Apple *doesn't* make this change... so far they've been pretty responsive to developer concerns (such as when they restricted app reviews to only those people who actually *purchased* the app).
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hkk said 4:39PM on 1-23-2009
I definitely agree with all he said in the interview. Well, except I don't necessarily think that 0.99$ is the sweet spot in general. It is just the price to pick to try to get into the top 100 or top 25. For specialized apps that don't necessarily appeal to a general audience there is no point in picking this low price as they will not get into these top ranks anyway.
Getting featured in the "What's new" section is the very best thing you can hope for in the App store. And it happens to maybe 1% of all apps. Spawn probably made more money than at least 95% of the apps on the store. If you call this 'mediocre success' your definition of mediocrity is off. But it is typical of the reporting on the App store which seems to purely focus on how much money is made by the top 5 apps or so.
Nikolai said 4:56PM on 1-23-2009
>> If you call this 'mediocre success' your definition of mediocrity is off
I think my words were "an ok amount of money to keep going" which I think is appropriate. My experience is that most the the successful apps have a good run for a month or two and then drop off the top 100. Of course there are exceptions, but for the majority of apps that's true. Depending on your business size, If you make it to the top 50 for a month it is likely that you can keep going for a few more months either doing updates or writing a new app with the money you've made, even if sales are low after the initial burst.
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Jay said 11:01PM on 1-24-2009
Imagine if Apple had released the appstore where the ranking was based on revenue, and the apps that sold the most revenue (units times price) were the highest ranked.
What would be happening today? Everyone would be complaining and wishing that Apple would switch to just ranking apps by unit sales, claiming the current system is unfair.
The reason they would be doing is that the top 50-100 apps would be dominated by the large companies who sell full priced apps and have a marketing budget to make sure those apps are hits. Well known games like spore, simcity, monopoly, etc, would dominate the rankings.
I think Apple chose this method to give independent developers a fairer shot-- and apps with no marketing budget have been in the number one spot as a result.
A better solution would be for Apple to provide multiple types of rankings, other than just "top paid" and "top free". Highest rated would be a good list, or pair of lists for free and paid, and best selling would be another list (which would be by revenue-- not replacing the "top" list, but adding to it.)
More ways of featuring apps will allow more apps to be featured, and spread the users over more lists, resulting in adoption of a broader number of apps, rather than most sales being garnered by just a few apps.
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