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The Almighty Buck Apple

Is the Apple App Store a Casino? 542

An anonymous reader writes "Fast Company takes a look at the Apple App Store and concludes that it's a casino where most developers are making tragic losses and a tiny few are striking it filthy rich. The article discusses a new book exposing the App Store millionaires, called 'Appillionaires,' which compares the psychological effects of a hit app on a programmer to a gambler's high. One millionaire programmer explains the intense feeling of being in the top-ten: 'The App Store had established some kind of intravenous connection to my body and was pumping me full of Apple-branded heroin.' But, the piece warns, the majority of developers fail to make any return on their app."
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Is the Apple App Store a Casino?

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  • by SharkLaser ( 2495316 ) on Wednesday November 02, 2011 @01:07PM (#37922322) Journal
    This is how it works. Tiny few become really rich, most barely make a living. Some better, some worse. It's not a casino, and it's not limited to app store.
  • by MachineShedFred ( 621896 ) on Wednesday November 02, 2011 @01:09PM (#37922344) Journal

    If John Q. Wallet invents some must-have widget which is easy to manufacture, cheap, and available everywhere; and suddenly sells millions of them, I'll bet he's feeling pretty good about that too. However, if he invents something that is a piece of crap that no one buys, he's going to have just as much of a loss.

    This phenomenon is hardly new, and certainly not localized to the iTunes App Store.

  • by ArrowBay ( 2326316 ) on Wednesday November 02, 2011 @01:17PM (#37922466) Homepage

    Exactly so. If I remember my economics properly...

    • The average new small business closes shop in two years or less. Most of the rest close up within the first five years. Anything after that is likely to be a success.
    • There are thousands of new products introduced every month in stores across America. Better than 80% of them are failures. Most of the rest might achieve niche success.

    OMG! The free market is a casino!

  • by phantomfive ( 622387 ) on Wednesday November 02, 2011 @01:22PM (#37922542) Journal
    Just because you don't understand why one app succeeds and another fails doesn't mean there is no reason. It is a complicated equation, and usefulness is only one variable.
  • by grub ( 11606 ) <> on Wednesday November 02, 2011 @01:27PM (#37922636) Homepage Journal
    If you sell your app for 99 cents, you only need sell ~144 copies in the year to break even on the $99 developers' program cost.

    That's small peanuts. Even moderately cheap webhosting would cost you that much for a year.
  • by xaxa ( 988988 ) on Wednesday November 02, 2011 @01:33PM (#37922740)

    Do not compare this to other software distributors. The 99$ tag that you HAVE to pay per year to have your app in the appstore make it extremely hard for anyone to be able to make a profit

    If $99 is the difference between profit and loss, was it really worth trying to make any money anyway? That's 0.5-1-2 days work at minimum wage in most developed countries.

    Better to put your time into a free app, and feel good about it, rather than stressing about your $99.

  • Don't lose a lot (Score:4, Insightful)

    by HalAtWork ( 926717 ) on Wednesday November 02, 2011 @01:41PM (#37922850)

    the majority of developers fail to make any return on their app

    The majority don't lose a lot even if their app fails, unlike a gambler who must constantly bet a lot. Apps can be coded in your spare time, and if a concept becomes popular enough, you can follow it up with something a little more fleshed out the next time and keep iterating until you reach the point of diminishing returns. Then start putting out concepts again until you find your niche, and start iterating again.

  • by NatasRevol ( 731260 ) on Wednesday November 02, 2011 @01:44PM (#37922910) Journal

    So, you have to make a good product, price it well, and market it well?

    Why, that's almost like ANY FUCKING PRODUCT.

  • by BasilBrush ( 643681 ) on Wednesday November 02, 2011 @01:47PM (#37922952)

    The 99$ tag that you HAVE to pay per year to have your app in the appstore make it extremely hard for anyone to be able to make a profit

    Good grief! The only way that charge would stop you making a profit, is if your profit was going to be less than $99 a year. Which would already be a failure, unless you're a schoolkid wanting to buy the occasional candy bar.

    It amounts to 143 apps at 99c. Per year. If you can't sell that, then you're wasting everyone's time with your shitty app.

    $99 per year isn't any barrier to anyone who is selling an app. It's only a barrier to people that want to do free apps. And of them only the subset who don't have any other financial incentive for the app.

    I make a software, host it on github and publicize it on facebook, I won't be loosing anything other than my time...

    Which apparently is worth less than $99 per annum.

    Meanwhile back in the land of reality, outside school kids bedrooms, real for profit developers consider $99+30% take to be a bargain. Anyone who's actually had any experience of the old ways: credit cards, chargebacks, hosting, programming reg-code systems, issuing reg-codes, reminding people of reg-codes. It's all a bore, and distracts from development. With the App Store, once you've sent it to Apple and got it approved, you just wait for the money to come in. And fix any bugs that come along.

    Final point: If you're taking it seriously, $99 will be far less than you pay for a designer for an icon and other app and website graphic assets.

  • by tepples ( 727027 ) <> on Wednesday November 02, 2011 @02:03PM (#37923190) Homepage Journal
    Android is friendlier to the (admittedly extreme) niche of people who make applications for their own use or for use by only close friends.
    • Android: You pay $0 if you make only applications that you use and do not distribute to the public.
    • iOS: You pay $99 per year, or you lose the right to run programs that you made all by yourself.
  • by BasilBrush ( 643681 ) on Wednesday November 02, 2011 @02:05PM (#37923220)

    1) 2007 (2006) is about the switch from PowerPC to X86 processor. That's a one off switch, not one that will happen "every 4 or 5 years".

    2) That being said, eventually all developers will want to move on to a new computer because their old one is too slow for recent tools. Whether their development environment is Mac or PC. It's pretty dumb to single Mac out as anything different.

    Combine this with a new iPod touch every two years (to depreciate at $150 per year), and we can estimate the total cost of hardware plus certificate at $400 to $500 per year.

    Whatever mobile development you develop for you're going to have to buy devices to test on. You're going to have to buy more of them if you're developing for Android as there are far more variants, and the turnover of models is more rapid.

  • by 0123456 ( 636235 ) on Wednesday November 02, 2011 @02:05PM (#37923228)

    So, you are saying one's time has no value, that there is not opportunity cost involved?


    The earlier poster was whinging about how Apple is just so horrible because they charge developers $99 a year and therefore no-one can make a profit. In response, people have been pointing out that if you can't make $99 a year to pay Apple's fees then you can't make enough to cover your development costs.

    No-one who's paying developers even $5 an hour would be worried about paying Apple $99 a year.

  • by Bemopolis ( 698691 ) on Wednesday November 02, 2011 @03:04PM (#37924026)
    No, this is *actual* capitalism at work. Now, if these developers were to fail due to their greed and rank incompetence and receive an 800 billion dollar taxpayer-funded bailout...

The Force is what holds everything together. It has its dark side, and it has its light side. It's sort of like cosmic duct tape.