Is iOS game Tiny Tower on track to make $3 million in its first year?

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On holiday in France, I’ve been playing Nimblebit Tiny Tower on my wife’s iPad. It’s a marvellous game (like a free-to-play version of Little Computer People, if you are old enough to remember that), and I’m busy analysing exactly why it is such a perfect example of how to build a successful, uncynical, enjoyable free-to-play game.

Before I did that, I wanted to check that the game was as commercially successful as I thought it was. I emailed developer Ian Marsh to ask him. He very kindly shared with me this insightful public information.

What are the metrics for a successful iOS game?

Tiny Tower is a game where you build a thriving skyscraper, populated by little computer people who work in one of five different shops. You can play the game entirely for free, but there is an in-game currency (called Tower Bux) that enable you to do a variety of things (build floors, attract tenants, restock your shops) at a much faster pace. My full description of why it is so good will follow after my holiday.

Tiny Tower was developed by two people over four months of full-time development. It launched on 23rd June, and these stats are accurate to 11th July.

• DAUs: 825,000
• Sessions per day: Over 8 million (implying 10 sessions per gamer per day)
• Conversion to purchasing IAP: 3.8%
• IAP breakdown:
  • 10 bux ($0.99 USD): 45%
  • 100 bux: ($4.99 USD): 51%
  • 1,000 bux ($29.99 USD): 4%

The game has been critically successful too. It has a 4.5 star rating on iTunes. It was featured in New & Noteworthy, iPhone Game of the Week, and What’s Hot.  In the charts it reached both Top 5 Free and Top 5 Grossing.

How much money can a successful iPhone game make?

I double-checked the conversion rate stat with Ian (because my first estimate made Tiny Tower so profitable that I didn’t believe it).

The conversion rate tracks is the number of unique lifetime players divided by the number of unique lifetime paid players. In other words, you can’t just apply it directly to the DAUs to estimate the daily revenue from Tiny Tower.

So here’s what I did:

• Start with 825,000 DAUs.
• To estimate the MAUs, I took a ratio of DAU/MAU of 0.35, based on a successful Facebook game (see, for example, Bejeweled Blitz on Appdata, although this has recently dropped down to about 0.31)
• That led to an estimate of 2.4 million MAUs
• Applying a 3.8% conversion rate to the MAUs gives an estimate of 90,000 payers
• Working through the different price points and splits gives an estimated gross monthly revenue of $375,000.
• After Apple’s 30% cut, that’s $262,000 per month.

Here are my workings

Possible errors

I made two key assumptions in this analysis:

• That Tiny Tower, DAU/MAU ratio would be similar to Bejeweled Blitz on Facebook i.e. an established game on a different platform. In the first month of a Zynga game, for example, you sometimes see DAUs/MAUs of over 0.7. If this were the case for Tiny Tower, I would need to half my revenue estimates. In the worst case (that DAUs = MAUs), net revenue would fall to $91,950 per month.
• That the 3.8% conversion rate for early adopters of Tiny Tower stays constant. I’m pretty comfortable with this assumption.

If you see any errors in my assumptions, or in the calculations overall, please let me know.

Free-to-play revenue models work

Tiny Tower is another great example of free-to-play. Over 95% of players play the game for free, yet it is making a quarter of a million dollars per month. More importantly, while 45% of users choose to spend $0.99, that represents only 11% of the total revenue. (Note this holds true irrespective of my assumptions above). The $4.99 purchasers represent 61% of the revenue while the whales, despite being only 4% of the purchasers, are close to a third of the revenue.

The chart below shows how important the high-spenders are (and is broadly similar to the revenue split for iOS game Pocket Frogs, another successful game for Nimblebit).

Conclusion

People often ask me to point them to an example of a great free-to-play game. One that I would be proud to show to a non-gamer as a representation of the art and craft of game-making.

Nimblebit has emerged as the pre-eminent examplar for me. Both Pocket Frogs and Tiny Tower are marvellous, engaging, polished, fun games. They are free-to-play and, as my analysis shows, highly profitable.

If you have any interest in making free-to-play games, or just want to play some great games, go and play them. You won’t regret it (although don’t blame me if you do choose to become a whale).

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