The App Store is just another casual games distribution platform + social network. You can pretend it isn’t (sometimes I think Apple is still pretending that it’s just an extension of iTunes, and ignoring the social side completely – Doh!), but that doesn’t make it true :).
Apple’s had the iPhone version of the App Store running for more than half a year now, and made tens of millions of dollars from it, so what’s it like? Where’s the social stuff good and bad? Where’s the game distribution stuff good and bad?
iTunes App Store as Social Network
- SHARED STRUGGLE: find good apps that you want, and don’t mistakenly pay for ones you don’t want
- SOCIAL ACTIVITY: three ratings systems for all apps (number of reviews, average STAR rating, text of reviews listed 25 at a time)
- COMMUNICATION CHANNELS: only one: the text of hand-written reviews, with each author required to use a globally unique “nickname”
- SELF EXPRESSION: authors get to include freeform text + 1-5 screenshots, and can name their apps using common branding (e.g. TapTapRevenge is one of several “Tapulous” apps). Consumers get to write freeform text within reviews
iTunes as Social Network: Successes
Um … not many. Apple is doing a very poor job of this right now.
They’ve barely provided the absolute minimum to allow for the emergence of a social network, although they do have enough there. Clearly the users are already making it into a social network, despite Apple’s failure here (just read the review texts).
iTunes as Social Network: Future
Things that we can expect to see as the network matures, assuming no-one at Apple wakes up and smells the roses and puts more SN features in place first:
- reviews with embedded URL (“see my other reviews here”), allowing individual reviewers to become brands (c.f. Amazon’s top reviewers for how successful and mutually lucrative for both Apple AND the reviewer that can be!)
- app descriptions that talk about the brand more than the app (actually, this has already happened; I’ve seen quite a few apps that have 4 paragraphs of description, the first two of which are talking solely about the OTHER apps from the same developer that you should go and buy instead. This happens especially with FREE apps. No surprise there, standard marketing technique)
- conversations inside the reviews (again, already seen this a few times where one review refers to other reviews of the same app by nickname or by the content of the previous review). Apple made the reviews system “look like” a web-based forum, so its no surprise that people try to use it that way (I think Apple would see this as a bad thing, and I suspect they count it as one of their foolish mistakes), but the UI is very difficult to use in this way (there’s no timestamp for comments, no threading, and pagination is very poor; a typical popular app with 1500 comments has 60 pages, all of which load slowly!)
iTunes as Social Network: Failures
Well, there’s obviously a LOT of things it’s missing as a Social Network. c.f. my previous posts on Kongregate’s more than 15 rating systems for ideas on what Apple MUST do there, and how far short Apple is right now.
Just looking within Apple’s own design, a few “bang forehead against wall” design flaws become quickly apparent:
- When you try to review an app, you HAVE to provide a “title” for your review and a “nickname”. But … when you’ve written the review, and saved it, and left the screen, it does a check to see if anyone else has ever used the “nickname” you specified. If so … Apple automatically deletes your review. No, I’m not making this up – there is no way to keep the review or re-submit it if your nickname is already taken. Good luck finding a unique name, folks! Note: this is not merely a question of being your iTunes account – you already have to be logged-in to your iTunes account before you even start a review (it prompts for password before letting you write the review).
- The only place you can give a 1-5 star rating for an app is from the screen where you install it. But … as soon as you click the install link, it takes you out of the install screen and to the main desktop, where you get to wait while the app downloads. Fair enough. Except … Apple has one other place where you can rate an app. When you delete / UNinstall an app, Apple pops up an automatic rating dialogue and asks you to click 1-5 stars. Hmm. Let me think for a second; if I’m DELETING the app, what bias am I likely to put on the rating? Oh yes. There is no equivalent for getting you to rate the apps you actually like.
iTunes as Casual Games Distribution Platform: Successes
Success 1: submission is now almost instantaneous
In December 2008, I submitted an app on Sunday evening. Two working days later, 17:30 California-time on Tuesday afternoon, the app was accepted by Apple. It appeared on the App Store available for purchase + download that same evening.
Apple has been on the receiving end of huge amounts of anger, frustration, and disappointment over the time it’s taken them to review submitted apps this Summer. They’ve been berated time and time again for failing to anticipate the obvious demand from developers – especially considering they CHARGED each and every developer $99 before the developer could even start coding, so they had plenty of warning. But the fact is they appear to have finally got on top of this, and are turning around apps fast.
(NB: I’m partly basing this on things like this thread on the iPhoneDevSDK forums where people have for months been posting to a thread how long they’ve had to wait for approval, so you can see how it’s changed over time)
Success 2: Operator Price-control is almost non-existent
You can give your apps away for free, if you want.
You can charge $1, $2, … all the way up to an amazing $1000.
No matter how much you charge, the operator’s margin is always the same: 30%. Nice and simple.
As a developer, you get a reasonable, albeit still not “fair”, 70% of the revenue. Compare this with casual games portals, where 50% share is still marketted as “generous”, and many portals try to get developers to accept 25% or even less. Oh please, don’t make me laugh – portals depend entirely on content for their revenue, and most should be giving the developers 75% of the revenue as a base figure.
The only failing in price-control / free market I’ve seen so far with this is that Apple won’t let you charge different prices in different territories. I don’t think that’s necessarily such a bad thing – geographic differential pricing has long been used to rip-off consumers – but it does have a weakness: there are many territories that are more price-sensitive than the US/UK/France/Germany, and developers lose the ability to price themselves in to those markets.
(NB: there is a workaround for this. You can choose to sell each app into precisely any combination of countries. You can also choose to localize each app for any precise combination of countries. So … you could make an English app and sell it for a single price, and separately make localized apps which are identical but just have all dialogue in a different language, and sell them at a different price. Technically, you could just make the same app without localization and sell at different prices, but I’m pretty sure Apple would reject that at submission time, since they’ve hardcoded the system to not allow you to do that the easy way)
By comparison, console manufacturers typically charge a flat license fee per unit sold. I.e. if you make a Playstation game, no matter what price you charge for it in the shops, you have to give Sony e.g. $10 for every copy sold. That becomes a de-facto form of strong price control.
Success 3: No devkit required
How much does it cost to (legally) develop Flash games?
Well … about $700 (just don’t buy it in the UK…), plus the cost of a PC. Yep, that’s what Adobe is charging for the developer versions of Flash these days. Go figure; most Flash game developers are almost certainly using pirate copies. (you *can* technically get much of the toolchain open-source, but none of it was production-ready last time I looked).
How much does it cost to (legally) develop iPhone games?
$99, plus the cost of a Mac, plus the cost of an iPhone.
NOTE: “the cost of a Mac” – this is one of the big sad things about iPhone development: someone in Apple won the political battle to try and use iPhone sales to prop-up the weak sales of crappy Mac desktop computers; it is impossible (and I suspect maybe even illegal, technically?) to develop iPhone apps on most computers. You have to use a Mac instead.
But if you have a Mac, and an iPhone (just a normal one – no “devkit” nor “testkit” required), then it’s a mere $100 to develop AND LAUNCH a game live on the App Store.
iTunes as Casual Games Distribution Platform: Future
This is tricky. I’m not a fan of crystal ballgazing (sic), and hate e.g. “my predictions for the new year” that everyone loves doing every December. But anyone devoting resources to iPhone development MUST have an opinion on this stuff right now, because it’s going to define the success/failure of their strategies. So … here goes.
Thinking about the histories of classic markets and platforms, though, you can see that the history of iPhone App Store has gone something like this:
- Private pre-admission of “special” developers
- Launch, with a small number of apps
- Early adopters, every developer made lots and lots of money, even for poor quality apps
- With no limits on quality nor number of titles per developer, the market became saturated, and new apps make zero money, while consumers find it hard to find anything they’re looking for
What happens next?
With a closed platform owned by a large well-funded corporation with lots of marketing dollars, we can expect that very soon Apple will make some sweeping change to the way distribution works. This is because they have been making large amounts of revenue, and huge ARPU, to date – but are almost certainly seeing ARPU’s drop off as the consumers struggle to find new good stuff. (revenues should still be zooming up as more and more customers acquire iphones, and more and more of them buy the “classic” apps, for instance buy for the first time the whole of the top-10 most popular that are automatically featured by the App Store)
NB: Apple couldn’t give a flying squirrel about the developers; don’t for a minute think they care what happens there. What they care about is that consumer-confusion is leading to dropping ARPU’s – which means they are missing-out on a lot of potential revenue.
NB2: Apple almost certainly would care about developers if they started haemhorraging the good ones to Android, but the evidence to date suggests that developer love of the iPhone is far too great for that to happen for a long time to come.
Obvious things Apple might try (remember: Apple is infamous for “bold” moves, and pride themselves on it)
- Integrate Facebook with App Store, giving every developer a Facebook page, so that consumers have a richer interface (Facebook + web browser) for browsing the store
- Allow iPhone apps to be run on PCs and Macs – the language they are written in (Objective-C) works perfectly well there already, and they have a high-quality iPhone Simulator that all the developers are using to test their games (it looks like a photo of an iPhone, with your app running on the “screen” and responding to input in real time). This would allow general web-based marketing and general web-based purchasing. This would either be stupid (throwing away all the benefits of their closed platform), or genius (taking over the world of casual app distribution and putting out of business not only portals but also ultimately many mobile phone companies, and probably once and for all killing Microsoft on the phone).
- Build a better App Store, perhaps do like Sony did with the PS3 store, replacing a UI nightmare with a basic, simple, ugly – but functional – system. Given how small the screen is and how much data there is to navigate – and the fact that you can’t use modern nav systems like Tag Clouds on an iPhone screen – I suspect they would have to go for ugly+functional even though they love “pretty” design (they’ve done ugly in lots of places both inside the iPhone and in OS X, wherever function or cost was more important, so this is not unprecedented). This is the boring route, and for anyone but Apple, I’d expect them to take it. I’m not sure they can restrain themselves to “boring” though.
iTunes as Casual Games Distribution Platform: Failures
“Too many to list”?
Apart from all the obvious rants that people have blogged and forum-posted all over the web, there is a slew of technical and operational bugs and failings in the system, some of which are unacceptable (i.e. CRITICAL bugs and the like).
But mostly these are only of interest to people actually coding for iPhone, or team leads managing the distribution profiles and app submission, so I’ll cover all those in a different post.
4 replies on “iPhone App Store: Social Network and Game Portal”
How about a similar analysis for XNA Community Games on Xbox 360?
Viewing every system with user reviews as a “social network” seems both reasonable and a bit of a stretch to me. Social interactions do occur and everything social can be considered to occur in a network. So, I guess any review system, such as the one on your blog or on msnbc.com articles, can be seen as a social network.
$2000 for Flash? vs. $99 for iPhone?
Well.. except for Flash, the price I see is $699 for a new copy (and you don’t really need the latest version). You don’t need Creative Suite.
For most people, the marginal cost of the PC is zero (though if you are an iPhone developer, the same would be true for you)… for the iPhone you do have those monthly data charges. The Mac is more expensive than the PC pound for pound, if you have to buy it.
So far, there is no “App Store” for Flash games, but the potential market is much bigger (almost all Internet users as the Flash penetration rate is around 99 percent for an AS2 capable Flash Player – version 8, I think), but selling is much harder for Flash (unless you go the ad route).
A more interesting comparison would be with Xbox Live Arcade which COULD be tempting competition, but MS has not opened things up (yet?).
Throw in WiiWare and you have a set of interesting competing game platforms (with fairly clear and conventional monetization methods)…
Oh, and Steam and TotalGaming.
@Ted: yep – and this has been a base assumption in the MMO industry since years before Facebook was even started, it’s just that it’s been kept as an internal secret, and no-one seemed to have thought of it as anything more than a way to sell more games :). IIRC, Raph Koster was one of the earliest identifiers of this trend / behaviour in MMORPG’s (hmm. funny, that ;)) – but it was already popping up as an idea in the deathmatch games (Quake, CS, and Diablo) even before MMORPGs got going.
@Steve: yeah, I should have used US prices directly, instead of what I did (UK price, converted to dollars at “normal” exchnge rates). Last time I checked, a month or so ago, it was around £1,000 for a current version CS that included Flash – but I do get confused about the bajillion versions, so I may have got mixed up and been looking at the “everything” deal by mistake.
Thanks for the correction!