A pre-WWDC announcement has been made by Apple to inform of a new app store revenue model, but how does this effect indie developers?
The New Revenue Model
This new model is an extremely positive change for both developers and users if done properly. The model allows for subscription based revenue with the a 70/30 split in the first year moving to a 85/15 split if a user is still subscribed to the app after a year.
Problems with the Current Revenue Model
The current revenue model is a 70/30 split between developer and Apple, with the main sources of income being:
- Paid app
- Free app with Adverts
- Free app with in-app purchases
Paid Apps
When the app store was first released the paid app was the most obvious approach as that is how software has been sold for years. The main problem with this is that nobody wants to pay £2.99 for a game that might be fun. The risk to a user is just too high especially when you combine this with developers that abuse this risk by saturating the market with low quality games as a get rich quick scheme. Even if it is a quality game, a user may not know whether they will actually like the game which is why the other approaches spawned.
Free apps with Adverts
This approach was often used to allow a developer to get there app to the widest audience. If all users could use the game without paying then the barrier for entry is non-existent. The problem with this is that due to low screen real-estate these apps caused frustration. This approach was often used in combination with paid apps but there was a difficult balance between how much you should give for free. If you give too much then there is no reason to buy the paid version. If you give not enough then the user will just be frustrated and not bother with the app at all.
Free apps with in-app purchases
This approach has become much more popular over recent years as a way of keeping the barrier for entry down but also having a way of gaining revenue. The problem from a development point of view is that there is a risk in that the game would need to be such a high quality to make users want to buy additional items in the game to further their progress. This often discouraged indie developers from this approach and was left to the large development studios that had the time and resources to ensure that high quality.
How will the Subscription Model Solve these Problems?
The advantages that I'm going to talk about are reliant on Apple implementing the model to allow:
- low subscriptions i.e. as little as 10p, 5p
- users to freely end the subscription on a monthly basis by uninstalling the app i.e. not be contracted to pay the subscription for 12 months.
As a user I believe that this new revenue model will essentially create games of a much higher quality. Indie developers will now have an incentive and a means to fund the on-going work to create content for a game.
Indie developers will also have less risk when coming up with game ideas. A cool idea for a game or a unique mechanic can be released into the wild with a few levels to gather user feedback in a similar way to how Beta's work.
The users will be more inclined to try a game if they can potentially pay just a low cost one month subscription to try it out. If this idea takes off then more content can easily be created without the developer having to staple on some annoying revenue scheme such as in-app purchases. If it doesn't gain popularity then the developer can move on without having invested too much time.
Users can play a new game without having to put up with any annoying adverts or in the knowledge that they will never be able to complete it without buying something from an in-app store. This will allow them to actually be immersed in the game in the way the developer originally wanted.
To summarise I believe this new model will support creativity and give reassurance to users and developers:
I believe I would actually consider becoming an iOS developer if this subscription is done the way I hope.
Cheers
Indie developers will also have less risk when coming up with game ideas. A cool idea for a game or a unique mechanic can be released into the wild with a few levels to gather user feedback in a similar way to how Beta's work.
The users will be more inclined to try a game if they can potentially pay just a low cost one month subscription to try it out. If this idea takes off then more content can easily be created without the developer having to staple on some annoying revenue scheme such as in-app purchases. If it doesn't gain popularity then the developer can move on without having invested too much time.
Users can play a new game without having to put up with any annoying adverts or in the knowledge that they will never be able to complete it without buying something from an in-app store. This will allow them to actually be immersed in the game in the way the developer originally wanted.
To summarise I believe this new model will support creativity and give reassurance to users and developers:
- Users will be able to try apps out without fear of being ripped off.
- Developers can create apps without the fear of not being rewarded for their time and effort.
I believe I would actually consider becoming an iOS developer if this subscription is done the way I hope.
Cheers
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