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Ad-funded or paid-for? An iPhone case study

By on March 23, 2009
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Making money from iPhone apps is hard, but ad-funded is better than paid-for.

That’s the conclusion of Bo Wang from iPhone developer Team iBokan, writing on TechCrunch.

The post is a case study of Galaxy Impact, a classic brick-breaker game that was released in October 2008. At first it was distributed for free, then the company charged $0.99, then they went back to free with ads.

Their conclusions:

  • Advertising generates more money than paid-for
  • Updates are less valuable marketing tools than people think
  • If you are going to have ads in the app, do some from the very beginning.

The numbers they are talking about are small: 120 daily downloads, leading to $2.50 of revenue (although when the game was first launched for free, it generated 220,000 downloads in the first fortnight.

I’m not sure I agree with all of their conclusions (and the game is far from innovative), but if you combine their data with the conclusions of Owen Goss (creator of Dapple), we’re starting to see some hard data about the potential of the iPhone.

I recommend you check out the TechCrunch article.

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: thecurveonline.com
  • Deep in the comments of the TechCrunch article, author Bo Wang says “We at iBokan are very good at engineering and creating iphone apps, but very bad on marketing and sales.”

    Perhaps this is the most important point (and will merit a future post). In this new world of developers having direct access to distribution, they will suddenly discover that publishers do, after all, add value.

    They do sales, marketing, distribution, positioning, financing – so many things that suddenly developers will have to learn.

    Or else, they can sit there wondering why a game that is just as good as all their previous games doesn’t sell well when they self-publish.

    Hmm, definitely a post coming up on that.