And while part of my hesitation had to do with my optimism about iCombat’s potential and my marketing ability, it also had to do with the fact that I rarely buy full versions of games (although I do occasionally). After just launching my lite version yesterday I can say that my concerns about the lite version were misplaced and might have cost me quite a bit in lost income. Below are my main takeaways from having waited on launching the lite version and why I think too many indie iPhone developers wrongly steer clear of lite versions:

1. Know your Apps Core value and its core user: This sounds douchey but it really is harder than it sounds to have the discipline to know the profile of your core user and then choose that feature you think will resonate most.  For example, if you are making a game it is easy to think kids and adults will like it and they will all get hooked on the game play AND the graphics AND the story equally.  Odds are your app will not resonate with everyone, and one salient feature will be the hook so the sooner you figure it out and admit it to yourself the better. You may be wrong, but better to know your target than water down your strategy by pursuing too many angles.  Needless to say once you have your app’s core value outlined it will also be that much easier to design your lite version.
2. The App store is not a lemonade stand: The App store is one of the largest, most seamless content delivery platforms ever and when it comes to pricing most of us fail to understand just how fundamentally different this is from anything we have ever seen.  As a result we apply our personal conceptions of scarcity, value or what it means to transact with someone to something that is totally different.  If you have released an app you will agree that pricing decisions or the debate about a lite version are often more emotional than rational.  I am sure more than one developer has though “I don’t want to give it to someone for free when I worked 3 months on it every night after work while my wife was screaming at me because I was never around.”  That would be okay to think if you toiled on a model airplane or a painting for that period and were selling the one unit you had created, but in the App store you can divide that effort across 40MM+ people so who really cares if 5MM users get your app for free if in the end 250k of them buy it?
3. Be careful about buying into the media hype: I am not going to preach like everyone else about how little is being made on average. I don’t care about that because no one gets into App development to be average – if we didn’t all think we were working on the next Enigmo we probably wouldn’t be doing it.   I am talking more about the marketing angle.  Don’t fool yourself about how hard it is to get noticed, especially as the bigger game makers start to move to the iPhone platform.   It is getting more and more difficult to get blog coverage  so if you don’t have either a major platform to launch from or an existing fan base to leverage, your main form of exposure will be the lite version.
4. The blogosphere is like steroids (but it won’t make you #1): Many developers see Gizmodo or Techcrunch as the definitive tipping point, and it could be for an app but if your app does not deliver the viral hook no blog will save it.  As far as I can tell there haven’t been any cases of a blog breaking an app that then jumped to #1 and stayed there for a long amount of time (please correct me if wrong).  Blogs are like steroids, can help you get from 10th to 1st or from 500th to 400th, but not from 10,000th to 1st.
5. Don’t hide from App store criticism & negative ratings. Tying back to the second point, it is hard to take criticism for something you have worked hard on and so there is a natural hesitation to launching a lite app as users can be much more harsh reviewers. Again the goal is to get die hard fans to buy a copy, so it is OK if tons of people don’t like your game or review it poorly because all you need is some that really love it to spread the word. Maybe not launching a lite version allows for more control over the reviews (as there seems to be a natural bias of paying users to give better reviews) but this helps no one. This only reduces the total amount of people discovering your app and limits your earning potential.

Bottom line developers need to stop pricing their apps and deciding strategy based on vague feelings of what is value or what is deserved.  With frictionless transaction costs and so many users, your worst enemy for getting noticed may just be yourself.  So we should all stop thinking about how our 3 months of work is selling for less than a cup of coffee (or could be given away for free) and start focusing on increasing the amount of people using our apps.

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In previous posts I have suggested to first time app developers the importance of creating proper specs when planning to create an app.  I think mockup tools like Balsamiq are even more useful than making great specs and writing out usage scenario examples.  Not only does it help you better develop your idea but it also gives you the ability to share your mockups with other people instantly.  For example, if you are thinking about outsourcing development or are talking to other team members, Balsamiq will let you share your mockups and convey clearly what you want to do (for info on how to protect your idea with outsourced developers read this post).  And by visually demonstrating the flow of how you want your app to work developers will have a much better idea of what you are looking for.  This will pay off in terms of the quality of developer you manage to get and it will also improve the accuracy of the time and budget estimates you get from developers.

Even if you plan on developing the app yourself, you can benefit from working through the fuzzy parts of your idea.  A mockup tool will give you the simple tools you need to work through EVERY aspect of your app structure before you begin the development process.  This is important because it can alert you to fundamental flaws in your idea or logic before you put the time and effort into building it.

In addition to the sketches of the iPhone and its main interface tools you also have sketches of dozens of buttons, switches, icons and other items that you can customize.  For example, when you drag an iPhone image to the drawing area, a box pops up where you can select whether to include the status toolbar at the top, change the orientation, the background look, etc.  You can even drag call out boxes into the picture as well to insert commentary about your mockup.  Check out this video for an example of what is possible.

Balsamiq includes a free trial version so you can test it out today…give it 5 minutes and you will see how quickly you get the hang of it.

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As a first time developer I wanted to protect my effort but did not want to pay an upfront fee to Ripdev without having made a dime so I opted to go for the more benign yet not totally passive option.  I chose to detect when they cracked the application and then have a pop-up screen say something inoffensive along with a button routing them away from game play after 5 levels.  The button redirected the pirate to a hidden page I created on my site called “You Jacked My App” where the text read:

“Hi if you have been directed to this page it’s because we see that you have a pirated copy.  While we are glad you are interested please understand that we want to continue making it better, but to do that we need people to each pay for their copy.  If you want to continue using please purchase today.”

The idea was to get the user to empathize with my cause and maybe convert a tiny fraction of those users into sales.  While it was a cheesy move and probably a bad idea I figured it couldn’t hurt to try (maybe I should have just rickroll’d them all!).  For a great example of a better executed version of this strategy see developer Ben Chatelain’s pop-up here which mentions needing the sales to help feed his 1 year old!  I just found this but had I seen it pre-iCombat 1.0 I would probably have implemented something similarly guilt evoking.

See below some stats to give you an idea of the scope of the problem for iCombat as well as some conclusions I have drawn from the experience:

A few thoughts on the data:

1) Pirates are extremely early adopters:

• iCombat was cracked and posted to Twitter before even propagating through all of Apple’s servers (I’d say within 30 minutes from going live).  Their adoption on the front end was much quicker than the paying user.  Nothing beats free…

2) There is no feedback culture among app pirates

• I am not sure whether they rely on legit app reviews or just word of mouth, but surprising that no one anywhere posted a warning that iCombat was blocked after just 5 levels (of 20).  As far as I know the cracking apps only utilize the plist hack so it is not an issue of hackers having found a workaround to my pop-up (I could be wrong here)

3) The overall pirate community is smaller than I had expected, but much more active

• 5 to 1 ratio off the bat in terms of pirated copies to purchased
• leveled off at about 1 to 1 ratio over the last few weeks before I removed the block (since then it has gone back up but on much smaller volume)
• iCombat has had dozens of Tweets about cracked versions of the game
• Cracking is a source of pride for pirates, and this pushes them to disseminate more aggressively

4) There was a high clickthrough rate to my site (only way user could avoid would have been to press home button) but once there ZERO users clicked through to purchase a copy.  Maybe if I had mentioned a 1 year old baby this would have been higher.

Some considerations specific to iCombat:

• iCombat was priced at $0.99 throughout this period
• Initial coverage in Gizmodo at launch plus the fact that iCombat is a familiar theme (tank game reminiscent of Combat for Atari or Wii Tanks game) might have also pushed an abnormal amount of geeks/ pirates to download it

Conclusions:

1) Piracy is still not that big of a problem when talking about the apps with larger download volumes

• Dave Castelnuovo from Pocket God was generous enough to share with me that they are only seeing a 5%-10% piracy rate for example.  While this could be in part because of Pocket God’s rapid update cycle which renders each pirated version outdated after just a week or two, it might also be a sign that the cracking community still isn’t that large on a relative scale.  This argument is supported by my declining per cent of pirates relative to overall downloads.

2) Blocking pirates is not worth it unless you can push conversion by giving them a lite style version

• Strategically structure the cracked game so pirates get the upsell, in iCombat’s case I would do (planning on a lite version soon) limited weapons, limited levels, no global high scores (coming in 1.2), etc.  Again for a good example of this see the link to Ben Chatelain’s 10 day demo strategy (above).
• A full block risks damaging the brand for non-pirates (could be perceived as a bug) or of creating a backlash by disgruntled pirates.  Not worth the risk.

3) Don’t cut off your nose to spite your face

• The goal behind launching an app isn’t thwarting pirates, it is getting users and generating sales so leave the “making a point” anti-piracy measures to the big guys. The competition is so fierce to get noticed in the App store that any attention is good attention.  Ethan Nicholas from iShoot fame probably isn’t too worried about the small pirate minority seeing as how he sold a couple hundred thousand copies of iShoot at $2.99.
• In most cases there is not a direct cannibalization of your sales by people using cracked copies – unless you have a high priced niche app the cost is negligible and the market is not zero sum (see my upcoming posts on my conversations with pirates that backs this up)
• There is a ton of anger and energy spent thinking about pirates (see the iPhoneDevSDK forum here for examples), this energy should be put into creating better apps and focusing on the top line potential.  In my case there are design issues that I should have focused on rather than trying to spoil the pirate’s experience.

So What Do We Do?

Assuming you have a relatively cheap app with a wide potential audience and what you perceive to be a long term value proposition, I think the best solution is to create a version akin to a lite version of the app for pirates.  It is no good to shut off access to the app completely, but it also doesn’t get you very far to give away the core value you are offering to the paying user.  I have decided I am going to do this for the next update of my app and hope that happy users, be they paying or pirates, will help spread the word and get iCombat above the App store noise.

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While I have been vague about what iCombat would be until now, I wanted to give you some background as to why we chose to do a classic arcade style tank game.  I grew up in the mid 80’s playing a beat up Atari 2600 – it was behind the times even then (let alone now!) but the good side of having the outdated console was that I could buy old Atari games at used book stores for under a dollar. I didn’t have the money, or need, back then to buy a newer console and it didn’t matter because the Atari had some of the best game play design of any console I have ever played.  Simple rules, easy to use controls, a fast learning curve, all of these things helped make it much easier than picking up today’s games (except maybe the Wii).

The game that captured my attention most was Combat, a 27 game in one combo pack that included the Tank game.  There were many variations of play, one of which was Tank pong – here you fired missiles (squares) at the other tank (a rectangle) and they could bounce off of walls and hit the enemy.  For me the bouncing missiles and fierce 2 player versus mode hooked me, and so when the iPhone launched we saw the opportunity to bring a similar type of game play to the younger generation of gamers.  The idea was to stick to simple game logic but utilize the powerful features of the iPhone to create something great.  Truthfully, we just created it also because we wanted to play it – and we tried to stay true to the game play fundamentals that made the original games so addictive.  And while there are half a dozen tank style games in the App store, we hadn’t found one that scratched our itch for this classic arcade style play.

We hope, after playing, you will start to share our enthusiasm for tank games and that you will become a fan of iCombat.  We also want to make iCombat better in future updates, so please send us your feedback at icombatgame@gmail.com or post something here.  We are planning to offer prizes of some sort (maybe t-shirts or something) to anyone whose idea is implemented in future updates so send us your best suggestions for future changes such as new weapons, levels, enemies, etc.  If your idea is good and others support it in the comments we will do our best to make it happen.  I will be posting some ideas of my own in the coming days so don’t be shy to shoot them down if you think they are weak!

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Enter developer Owen Goss, creator of Dapple, who posted a self described “brutally honest” description several weeks ago about how he had done in his first month of sales. While Owen just came out with a lite version of his app and his experience is far from over, the numbers he provides highlight just how disheartening the launch period can be.  To sum it all up, in the first 24 days of Dapple being available it sold 131 copies worldwide.  That wouldn’t be such a bad deal if it were a side project, but Owen spent 6 months and over 30k developing the game (we should back out that he paid himself a salary throughout though).

While the reviews of Dapple have been strong and it clearly is a quality product, the game had a few key factors going against it.  First of all it entered a competitive game genre and had a $4.99 price point which couldn’t have helped much early on.  I won’t get into the full discussion around the pros and cons of Owen’s marketing strategy but check out the full story here if you are interested (also check out Owen’s awesome slides on his experience with Dapple here – pdf).  I am more interested in how he is dealing with the early setbacks.

Surely publishing sales data got Dapple noticed, evidenced by the fact that I am writing about Dapple now, but is this really going to help? And just how long do we tinker with our formulas until you know it is time to give up and try another app?  Is it until the lite version fails to boost paid downloads, or until or the price is dropped to $0.99, or maybe just until all of the major sites refuse to review the app?  As I get within a few days of submitting iCombat (that’s right, bugfixing is almost over!) I am trying to be optimistic but also prepared for a long hard slog of self promotion, begging, and screaming to get my app noticed.  We’ll see if I can avoid having to post a “brutally honest” entry of my own once my app launches…

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Although conventional wisdom is to iterate frequently, the friction for submitting new updates to the App store is so low that developers seem to be taking this strategy to the extreme as an excuse to launch prematurely. These apps freeze, quit, or just don’t work as advertised and many times users write negative reviews as a result.  While some developers would argue that they get a ranking bump from new updates, and I have seen some applications that submit updates every 4 days or so for the 1st month post launch as a strategy, I think this is damaging to the brand they are trying to create and only serves to piss off the early users.

If your app is free the bar is set low, but if you are charging even $0.99 it might make sense to wait until you get the major bugs out.  Sometimes though it seems to come down to a game of chicken, where the financial urge and market opportunity considerations create a push to launch that runs directly in contrast to the need for more time to refine and debug.  The guys at ngmoco’s have a great post about why they choose to do their first update to Rolando now, 3 months after they launched the game on December 18th.  Clearly this is the ideal approach but ngmoco has a privileged position, having proven themselves early while also having the financial and structural flexibility to be able to run rigorous quality assurance protocols pre-launch (said to have fixed 1000 bugs before launch!).  It is a testament to their process that they have not had to submit any updates since release until this update.

For the rest of us amateur developers though the question is not so simple.  While I do not think we should emulate ngmoco’s strategy, as it is financially risky for an amateur developer to spend so much time and money on testing a totally unproven idea, I think it is to be patient and make sure the major bugs are dealt with before launching to paying customers.  If you are creating a crapware app that has little functionality and is simple then sure, launch it early, but if you have any pretensions of developing a community or following behind your game it might be wise to have all of your users, even the early ones, have a positive experience with your app from day one.

Another approach is to launch your app as a fully functional but with an extremely limited feature set.  The perfect example lies in the current No. 1 in the paid App store, Pocket God. Bolt Creative, the makers of the game, decided to launch after only 1 week of development and subsequently released 1 update per week for 10 weeks, adding a new feature each week.  While this strategy worked well by building a community and fostering an interactive ongoing relationship with the user, it looks like it strained the early users on the front end.  In a recent interview, one of the co-founders of Bolt Creative Dave Castelnuovo said that, at the beginning, they “felt really guilty releasing [the Pocket God] app for $.99 because people said there really wasn’t enough there.”  While I am sure all of the subsequent 10 updates made users happy, it is a risky approach that only works if your ongoing updates are good and if your idea does not get poached in the process.

From my point of view we thought about releasing iCombat with only 1 player mode and less options but in the end we decided to forgo the short term benefits at the risk of exposing our concept.  The tradeoff we saw was that, with such a quick turnover rate to developing new apps, we could be releasing our idea to the world to only have someone with a bigger more experienced team, steal our idea and do it better than us.  We chose to risk the 1st mover advantage as well as short term gain to come to market the first time with a better brand and a more defensible product. Clearly the market is evolving and many models will work, so only time will tell if tour approach was a wise idea when we launch in the coming couple of weeks.

Update:  We just submitted iCombat to Apple on Monday (2 days ago), while there were one or two design considerations we were still debating and figuring out how to perfect, we finally decided to let the users decide which features they liked most.  From our perspective, and maybe from also writing this post and thinking more about the Pocket God example, it just didn’t make much sense to keep working on certain design issues that we weren’t even sure the user cared about.

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1. “Crapware” – cheap to make in terms of time and resources.  Targeted by both experienced and inexperienced developers.  Business model is either ad supported or sell for $0.99.
2. Full fledged apps by amateur developers – more elaborate design and execution by part time developers.  Attempting to create a full game experience with iShoot and Trism being good examples.  Business model is pay model with prices between the $1 and $5 range.
3. Full apps by funded start-ups – professional developers focused on higher quality games.  Here we have iBowl by the Social Gaming Network for example.  Quality of applications is high, business model is anything under the sun (to see one of the more creative examples check out Toy Bot’s $10k giveaway marketing strategy)
4. Professionally produced games – major studios like Sega or EA using teams of developers to leverage the iPhone platform.  Business model is selling games for $5+, probably closer to $10.  A good example is Spore.
5. Specialty “niche” apps – made by professional iPhone development companies for specialized purposes.  Usually sell for $10+ or have a lite version that functions as an extension of existing brand.

I know from personal experience that by the time I am paying $5 I expect something pretty damn good.  And not because it is a lot of money but because there are THOUSANDS of apps that cost much less, if anything at all that I could have chosen instead.  Barry Schwartz calls this the paradox of choice, and describes how our consumptive experiences can be poisoned by our awareness of the fact that so many other options exist.  Maybe this is why there are so many angry reviews of the more expensive apps; not only are users spoiled by the free apps in the store but they are pissed off when they make what they perceive to be the wrong choice.  So where does this leave us?

While I understand the current strategy of using price as the sole tool to spur demand, the ideal solution would be to create a more efficient discovery process for the user where they can try before they buy – thus allowing a larger purchase to be less of a gamble.  For now I plan to focus on the middle pricing range, making sure to deliver good value to my users while resisting the temptation to fall to the lowest pricing point to spur demand.

iPhone Usage Patterns by Pinch Media

Techcrunch is out with a new post today addressing the pricing dilemma, where they offer Pinch Media’s data on application usage over time as evidence that free apps are not the way to go.  According to Erick Schonfeld “for all but the most successful apps, the free route does not make much sense because there is not enough time to recoup the costs of developing the app from advertising.”  This is because the data suggests that only 20% of users return the SECOND day after downloading and only 5% of users return by day 30.  So it is easy to see why even with high online CPM rates you would still not have much time to recoup your investment.  Of course if you can create the application in an hour then maybe it still makes sense but current trends suggest that the market for simple apps is also getting more competitive.  If there are 20 free versions of a level in the app store then odds are it is not going to be that easy to rise above the noise.  See some great slides from Pinch Media’s CEO Greg Yardley below:

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The question “crapware” apps raise for the app store are obvious, why would developers and businesses spend weeks and months and maybe tens of thousands of dollars to build an application that is competing with one trick apps that sell for free?  Surely pricing pressure and excess supply will send the entire app store to the ad supported or near free pricing points.  Well I disagree and am not too concerned that this will happen.  There may be 75 versions of flatulence apps and I already found about 10 copying Sound Grenade but I don’t think that this will last for very long.

The main reason I don’t think “crapware” will make too much sense going forward is that these apps are just too easy to replicate and will eventually become commoditized.  Let’s say you are the first to create a lighter effect on the iPhone and you are lucky enough to hit the viral level, odds are your revenue will be cannibalized by copycats (for a hilarious example of what can happen see iFart versus Pull My Finger lawsuit documents here).  And because the application market is still young and inefficient there is plenty of room for “crapware.”  I know there will always be gimmicky apps and maybe even an equivalent to user generated content on the app store but I don’t think it will become the rule.  These simple apps will form the long tail of sales and will pose little threat to the more elaborate apps in the App store once there is enough quality app inventory.  The rush to just put something out there and enter the iPhone lottery will disappear once more players enter the market and drive this quality standard higher.  Then the cost of getting your “crapware” application over the noise will be so great that it won’t be cost efficient to do it for several apps as is the case today.

Just a theory, but would love to hear some thoughts on the topic…

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