We’ve all heard the stories of the kids who sat in their basements coding hit iOS games that go on to make hundreds of thousands of dollars. We’ve also heard about the likes of Rovio, a company that makes more money than it knows what to do with because some clever fellow decided that throwing birds at pigs would be fun.

There is money to be made in the App Store, so long as you’re in the top 20% of iOS developers that are making a whopping 97% of the money that’s out there…

So, how’s that work? Well, Owen Goss, founder of Streaming Colour Studios (and previously a developer at Electronic Arts Canada) decided to do a little survey, and spoke to 252 iOS game developers with the aim of finding out just how they were doing when it came to making the cash. The results are quite surprising, and indeed shocking if you’re planning on getting into iOS game development.

“The results also showed that the top one percent of iOS game developers — again, in terms of lifetime revenue intake — earn over a third of all game revenue from the App Store. Hence, the bottom 80 percent are earning just 3 percent of the revenue.”

Just as telling is the news that while 25% of those audited made $30,000 or more in lifetime total revenue, the bottom 25% made less than $200. Factor in the cost of an iPad or an iPhone, and they made a loss.

It’s clear that if you’re going to make a success of releasing iOS apps, and not just games, there is a certain degree of luck in whether you make money or not. Getting picked up by the best websites, going viral on Twitter, and being recommended by Apple can all be as important as actually producing a good app.

If you’re an iOS, or even Android developer, we’d love to hear your feedback on this in the comments. Do you agree or disagree with these findings?

[Gamasutra]

  • TheGodless

    It may just be my shopping habits, but I don’t worry about hype or what’s recommended by Apple. I’m always browsing the app store for fun new games.To me, it’s about finding that hidden gem. If only there was a way to bottle up that treasure hunt mentality, I think all of the good game makers would make a decent wage. Maybe Apple could look at expanding what it recommends by updating the store more frequently or increasing what it recommends to 25%. Or better yet, app makers could give shoppers an incentive to search out new apps by implementing free downloads for the first 50 shoppers. If this was across the board with all apps, people would be frantically digging through the app store looking at everything.

  • Peter

    “To me, it’s about finding that hidden gem. If only there was a way to bottle up that treasure hunt mentality, I think all of the good game makers would make a decent wage.”

    Y’know, this sounds like an interesting game–searching an MMO-type of thing for an interesting game. Make your money in the sale of the games inside your MMO…

    Concerning the article, this is the way the software world has always been. There are lots of apps out there. Some are great. Some are good. Some are poor. Some sell well. Some sell okay. Some sell poorly. There are lots of variables involved.

    There’s the myth that if you write an app and put it on Apple’s store, you will be showered with money. All you have to do is write the code and Apple will do all the hard work. The reality, of course, is that all you’re guaranteed to get from Apple is a couple of weeks in the “Just released” section. If you can attract the attention of some Apple people, you may get a spot in the “recommended applications” section. But it’s still up to you to market the app (eww…marketing) and create whatever buzz you need to get those sales going.

    • rick maahea

      you are absolutely right…

      i still like my idea better. If i flood your house with water, you have no choice to go out and do something to fix it. If I sell the tools you use to fix it, then I benefit from it.

      make thousands of mind numbing apps, and release them, so people will become bored and download more of your mind numbing apps in an attempt to relieve themselves of reality, erm, bordom.

  • rick maahea

    actually Oliver I have to disagree. I don’t think luck is so much involved. I think it has more to do with the fact that the 20% who are making the most money are doing so because of the fact that they have numerous, and I mean numerous apps in the App Store. think of it like this. If chevrolet built 3,200 different models of cars this year where dodge, ford, and etc. only built 10 models each, you would be more likely to buy a chevy because the market was flooded with them, so they would be cheap, easy to get and easy to replace. At this point chevy would then focus on its higher 10%- on high quality vehicles at higher prices, and release them in addition to it’s already dominated market. Ford, dodge, and etc. would be unable to match this tactic because they are unable to sell as many products, and therefore they are forced to lower the prices of their current lineup to attempt to contend with chevy. After a while they would realize that this does not help, and in fact they now have less income. they cannot raise prices to compensate because then they would lose part of their already small following. so they offer less and less product until they eventually go belly up.

    my point is, the top money makers in the App Store make money because they have many many apps to choose from, and after they reached that point, they released higher quality, higher cost apps.

  • jbelkin

    Well, his survey only covers a few developers who answered him – clearly it’s NOT accurate outside of these developers – otherwise, where are there hundreds of game developers entering this field? Does this guy have a hidden agenda to drive away new developers? But it’s missing the main point – where else is it a level playing field? That you have as much “shelf space” as EA? that you in your garage could in theory develop an ANGRY BIRDS – a $1 BILLION dollar revenue game with a few thousand of commitment (a mac, iphone & an ipad and your time)? Once it’s uploaded, the rest is up to you – sure, when it comes to marketing EA can still outspend you but look at the top 50 best selling games – EA has a few in there but unlike in retail where you have to PAY to be distributed and pay for the production of your discs. Where else do you have a LEVEL PLAYING field to reach 225 MILLION IOS users? That you can garner revenue from sales, ad revenue or in app purchases? that Apple does ALL the collecting for you and gives you your cut every 30 days – retailers won’t even pay in 30 days! That all you need to do is prodce a game people want to play and if Apple’s itunes staff likes it, they will promote it for FREE. No racking fees, no ads co-op, what’s a fairer deal than that? NO ONE is promising you’ll be rich AND maybe the FIRST game you upload is a test run. You learn from your mistakes – does this guy account for this? So, what’s the hidden agenda of this guy – you can’t make money, leave it to EA? People really need to examine what’s the real story than just accept a guy who called up the worst selling tic tac toe apps and WANT YOU to stop competing with EA.

    • Johan

      Great point of view! Apple provides a level playing field, its up to you to make the most of it!

  • Fredrik Olsson

    It might also be that the bottom 25% on the App Store is filled with utter crap?

    If you can not even create a decent screen shot to attract my interest, why would I give you my money and “hope for the best”?

  • Don

    I think you will find that not one of the people here actually owns a business. If they did, they would be very familiar with the 80/20 rule: 80% of your business comes from 20% of your customers. The 97% figure is probably high due to the unscientific nature of the sample of developers, but the basic results are expected.

    • Rick maahea

      I think you will find that you are in correct about your very first statement. Which makes every statement thereafter less credable

    • Rick maahea

      I think you will find that you are incorrect about your very first statement. Which makes every statement thereafter less .

  • Rick maahea

    I’m not sure how my iPhone managed to screw that up twice.

  • I think that all those who think creating a great app is all it takes to generate downloads, have no clue at all. You have to be a developer to know this. As a developer myself, even if you create 5000 apps in the appstore, what makes you think that mere 5000 can stand out of 300,000 plues apps in the appstore? So it doesn’t mean the more apps you make gives you a better chance. Rovio doesn’t have that much apps. Pop Cap, creator of plants vs zombies have a few.

    It’s more than just a good app. There are a lot of crappy apps out there that are in the top (ex: all the fake lock apps that people download without reading the description) and a lot of good apps at the bottom (there are alot!!)

    One main thing is your marketing, and marketing cost MONEY. How can you compete with bigger companies with bigger budgets then? Sure there are a few developers that makes it. But you have to be realistic that this is one in a million chance.

    I’m not discouraging new developers. I just want to let them know that it’s gonna take A LOT of hard work. And I mean A LOT. More than just creating a good app. You have the task to make your app visible in the market and cut into the clutter of the app store. On my experience we spent hours and hours and weeks emailing hundreds of review sites, thousand of relevant sites for our apps. And the average response is less than 20.

    And don’t think that being featured in a big website is all you need. Sure it helps a lot but being featured in a big website doesn’t mean your app will make it to the Top 25%. Several of my apps made it to large websites. To give a couple of examples: My app “Bro Lifeline” was featured in CNET, and a several app review sites. My app “Currency Banknotes” was featured by MASHABLE as one of the Top 5 Smart Apps for Currency Conversion. It was also featured in several app review sites and several travel blogs. And it took a lot of time and dedication to get featured in these sites.

    We had few successful apps like mentioned above and A LOT of good apps that didn’t do too well.

    But, having said all that, It is possible to have a successful app, even for independent developers. But it will not be easy, and you have to work hard for it.

    Hope this helps

    Best Regards