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Locals hoping to hit the application jackpot through Apple’s booming App Store online marketplace Curt Cherewayko Apple’s trend-setting App Store is luring software developers from B.C. and around the world with the prospect of creating the next big – and moneymaking – iPhone application. Turning the application-development model on its head, Apple allows companies and independent developers of nearly any skill level to post applications in the App Store for free. Apple collects 30% of sales from downloads, while an application’s creator collects the difference – a ratio that can offer a lucrative return for the developers of the most popular applications. Vancouver’s Sillysoft Games launched its Lux DLX in the App Store on December 19. Since then, the video game, which is similar to the board game Risk, has been downloaded more than 25,000 times. At $7.99 per download, Sillysoft has generated roughly $140,000 in a month from sales of Lux DLX.
The five-year-old company focused its development efforts on video games for PCs before Dustin Sacks, the company’s founder, discovered that Apple was launching its App Store last July. “I’m tempted to not make anymore desktop games and just do iPhone games,” said Sacks. Sales of Lux DLX have already paid for its development costs, which were primarily wages for programmers and developers. The game has also boosted sales of Lux DLX’s PC version. To promote the game, Sillysoft released a free version last October. Since then, the free Lux DLX has been downloaded more than a million times. Developers can buy the iPhone’s software development kit, which is needed to develop iPhone applications, for $100. That price, according to Sacks, pales in comparison to the thousands of dollars that other video game and application development kits are sold for. With 15,000 iPhone applications available today, seven months after the App Store launched, the challenge for developers is creating an iPhone application that stands out in the crowd. “It’s possible that in a year or two it will be flooded with apps and they’ll all drop their prices and nobody will be making any money,” said Sacks. “It’s also possible that … there are going to be some [applications] that can hold a price point and make a lot of money.” He added that because the iPhone platform is so accessible, many applications are very primitive and inferior. The iPhone has its own proprietary platform. That eliminates the need for porting, which makes an application compatible across different platforms. Because industry fragmentation has created thousands of different phones, porting has become a major issue for programmers. “If you’re looking at getting your game out on 500 different handsets, at least half of your budget is being spent on porting into every iteration of the handset in that platform,” said Sarah Thompson, a business development executive at Iugo Mobile Entertainment. The Vancouver company began developing video games in 2003 on platforms like Java ME and Brew MP, which are widely used on many cellphones and on some smart phones. Since the App Store launched, Iugo has released five video games for the iPhone and has two more in development. Thompson wouldn’t disclose how many times Iugo’s games have been downloaded from the App Store, but noted that the company has shifted its focus solely to developing iPhone games. In doing so, Iugo no longer has to partner with game publishers like EA Mobile Games and THQ Wireless. As well, the company doesn’t have to build relationships with phone carriers, which is a major feat for any junior company. “The carriers are very restrictive, very controlling and typically they only deal with the big guys,” said Thomson. On January 20, Vancouver’s 3rdWhale.com launched its free iPhone application, which uses the iPhone’s global positioning system, or GPS, to help users find green businesses. The company hopes to drive revenue by selling advertising space and premium listings on the green business directory. Boyd Cohen, 3rdWhale’s founder, noted that while the iPhone’s popularity is growing, it still represents only a fraction of the mobile phone market. “If you’re just building an iPhone app and you’re only relevant to iPhone users … then you have a very small market.” Iugo and 3rdWhale are exploring developing applications for mobile phone application stores that BlackBerry and Google are launching in response to the App Store’s success. •
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Business in Vancouver January 27-February 2, 2009; issue 1005 |
