Economics of $0.99 iPhone Apps

I just purchased the two Monkey Island games that are on sale for the iPhone right now. They are currently 99 cents each. They are also brilliant adaptations, so you should get them right away. It got me thinking if and how one is to make a living out of selling 99 cent applications. It’s something I have been thinking about, but after my very rough analysis, I don’t think I’ll be choosing that career.

I can understand how the creators of Monkey Island make a lot of money. The game was there, they “just” took the game and ported it to the iPhone platform. They did it perfectly. The mouse interface has been elegantly replaced with a pointer and default double click action to speed up adventuring. LucasArt might also going to reuse the code to port other games, so there’s an economy of scale here.

But how does an independent developer do? Well, I tried to guesstimate what developing a very smallscale adventure game might cost you. Basically I started from a situation where you already had a pretty good idea of the game itself, ie. you had the story pretty much figured out and most of the mechanics.

From there, I calculated 2 weeks for developing the concept and a prototype to figure out if the game was feasible. If this is your first iPhone game, you’d probably need 10 times the time. From this forward, I think 2 months development time will be the absolute minimum. Furthermore you’re going to need graphics, sound and possibly music. Graphics are usually what sell iPhone applications, so I wouldn’t try to cut corners there. You might be able to get away with a little less effort on the sound.

I put this data in a Google Spreadsheet to get an idea for the numbers:

Or if you want a direct link to the economics of iPhone apps spreadsheet.

If you want to actually make money with an iPhone app, you’re either going to have to be very lucky and become popular, or you’ll need to launch an additional marketing effort to get about 45000 buyers. Not an easy feat.