Om Malik looks at data about the Apple App Store from an analyst. The conclusions, in list form:
- Video games continue to dominate the App Store charts and drive the vast majority of App Store revenue (est. 75%+) for AAP
- Similar to the last two years, non-gaming apps remain under-represented at the top of the charts, with just one of the top 10 grossing apps, two of the top 20, four of the top 30, and five of the top 40 in the App Store for 2014
- The App Store alone reached nearly $10 billion in sales in FY 2013 and we think that this can grow to nearly $20 billion by FY 2015
- Net App Store revenues to pass gross iTunes revenues in dollar terms (both as-reported) in the second half of FY 2015.
- Of the $1 in App Store sales, 24 cents is operating income while remaining 6 cents are spread across operational expenses and costs-of-goods-sold.
Looks good right? Growth, growth, growth.
It looks good when you’re Apple, but when you look at this from the perspective of the user, a different picture emerges. Of the top 50 ‘applications’ in the App Store, virtually all of them are games. Of those games, virtually all are “freemium”, the semi-scummy or outright scummy pay-to-win games we all despise (the one exception: Minecraft). Actual applications are virtually nowhere to be found in the top lists. Accordingly, the vast majority of revenue – more than 75%, this analyst claims – goes to game companies, not application developers.
This isn’t an ‘Appy Apple’ – it’s a ‘scummy freemium Apple’.
And before the usual people blame me of being anti-Apple again because they have nothing better to do: I’m pretty sure the exact same trends apply to the Play Store – just with far lower revenue numbers.
The application store model is working out great for a few large players and Apple/Google, but as an independent developer, the odds of making it big in either the Android or iOS application store are very slim; in fact, the few large players are so dominant that your work will most likely never bubble to the surface of the ocean filled with freemium crap.
This is further highlighted by the countless stories of whining users on both the iOS and Android side whenever a developer decides to charge for an update or add-on to an existing application. We know the story of Monument Valley, a beautifully crafted mobile game that drew ire from cheapskates because the developers dared to charge a few bucks for an expansion pack to the game that nearly doubled the original game’s content. More recently, Android developer Chris Lacey faced similar criticisms (see the comments here and in other places) when he charged a few bucks for a ground-up rewrite of his Android launcher.
This is what the application store model has done to development. Because large companies can release seemingly “free” games and applications, stupid people expect every mobile game and application to be free. Apple (and Google) have instigated a race to the bottom, massively devaluing the work of developers. The developers of Monument Valley as well as Chris Lacey have put a lot of hard work in their game and application, yet people expect it to be free, and are enraged when they are confronted with the fact that developers need to eat too, and that games and applications do not just magically materialise out of the the Ã¦ther. While sipping their triple-a-day 8 dollar ‘coffee’, of course.
I have never made a secret out of my dislike of the application store model, exactly because of what it does to independent developers. It devalues their work, and independent, small development houses will simply be unable to survive in this race to the bottom. The end result? Apple and a few large companies win, but independent developers and users lose.
Well, unless you like the virtual equivalent of slot machines.
I suspect Apple is as surprised as anyone for the behavior of customers in the App Store. Apple knows the value of their software and charges a premium for it. An cheap throw away experience cluttered with adds and constant annoying buy in seems philosophically opposed to the “Apple experience.” This is terrible. Good software is hard to make and deserves to be paid for. But there does seem a terrible race to the bottom, for higher quality software, even Miceosoft has even put Office on iPad free (or Get). But also OS, with Android, windows phone, and even windows itself free. Theee has been an idea that everything should be free on the Internet, movies, music, books and software have been devalued fueled by piracy and philosophy. I don’t think app stores make this, they make the devaluation obvious. I think the answer is not get rid of app stores, which may actually be the best way to actually get money to developers. But change the recomendation algorithm. Push quality. Facebook and google have shown us buy changing the algorithm you change what people do. Make an App Store a place where high quality flourishes and is not buried by the sea of low quality freemium applications and games.