Michael Yuan

The answer is 3 to 20 million dollars per year.

I had the chance to sit on the iPhone panel with Brian Greenstone at InnoTech a couple of weeks ago. Brian runs a very small (one man?) development shop that has so far produced 3 iPhone games that are in the top 10 list. His game Cro-mag Rally was the #1 iphone game for many weeks. So, he speaks with authority when it comes to sales figures of top iPhone app store applications.

According to Brian, the #1 paid app in the app store generates around 8000 downloads per day. The number drops to around 2000 per day if you are #25. Consider that many top apps have been selling for between $5 to $10 a piece. Considerring that apple takes 30% from the top, you can see how I arrive at the 3 to 20 million range for profits.

Of course, a big assumption is that your app can stay in top 25 all year long. That is difficult but not impossible. In the end, it is relatively simple to write an iPhone app (as opposed to a PS3 game or a full enterprise app). As Brian has demonstrated, given the talent, it is possible to have multiple hits from even a one man shop.

And we have not even touched free apps in the app store. Free apps see much higher download numbers than paid apps. But their revenue is hard to measure since it indirect. My guess would be that a lot of those popular free apps are also making decent money via “off deck” subscription payment and advertisement. In fact, that is exactly what I plan to do with my “yet to be approved” iPhone apps. Stay tuned!

This entry was posted on Saturday, November 15th, 2008 at 1:50 am and is filed under mobile. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.