- The app economy is expected to be worth
$120 billion in 2019.
Not bad for an industry that's only existed
for just over a decade.
The spread of smartphones is the reason it took off,
but the sustained growth comes from developing markets.
By 2020, almost 75% of the global population
will be connected from mobile phones,
and developing markets will account for
the largest share of that growth.
In short, the app business is booming,
and it looks like it will be for quite a while.
But most apps are still free to download,
so where's all the money coming from?
A lot of the money-making strategies, sadly,
require a bit of deception.
Get folks invested in your game
or let them have fun with it,
but if they want another try,
you're going to have to put some more change into it
to have another go.
The standard advice is, unless you are somehow
getting people to pay upfront,
you have to get your users invested
and interested in your app,
and then figure out a way to charge for more of it
or for a better version of it.
But there are other approaches,
and folks have made a lot of money in other ways.
Making an app is expensive.
Let's figure out some ways to avoid going broke.
- Monument Valley is a game about impossibility
and illusion that we released for mobile phones in 2014.
- And it was extremely well received.
- Yeah, it was like a big surprise.
Like, I remember, we were in our studio
in Shoreditch in east London,
and we just thought maybe 1000 people would play it.
- What, in total?
- Yeah. - Oh wow, okay.
- Like, we just had eight people make it,
and I think at this point, that and the second game's
about 200 million people, so yeah, crazy.
- There's the idea of anchoring,
that people are happy to pay 50 bucks
for a console game on release day,
but won't pay 99 cents for something that's on a phone.
What was your strategy on sales?
- You need to, obviously, the main kind of
monetization methods for mobile games
are that of a game being free or ad-supported,
free with in-app purchases,
or what used to be quite an old school way,
like a normal game way, which you pay for the game upfront
and then you don't worry.
- Which is reasonable, it's reasonable
on every other platform apart from this little thing.
- I know, it's crazy.
So, people always ask, like,
what's the difference between free and paid?
Does that influence how you make a game?
'Cause it undoubtedly does.
Like, my best way to describe it is
imagine you've got two rooms, all right,
and you've got the free room and you've got the paid room.
So, the paid room, all I've got to do is
you buy a ticket, it's going to be my room,
and then once you're in, the only thing you've got to do
is make sure you enjoy yourself.
You can leave after five minutes, you can stay the night,
whatever you want, I've just gotta make sure
this is an amazing experience for you.
The other room is the free room
where you don't have to buy a ticket to come in,
but then once you're in my room,
my primary objective is to keep you in that room,
no matter what, with distracting you,
with offering you other things.
So, it fundamentally changes
how you go about designing stuff.
So, for us, I guess, respecting people's time,
having something they can finish,
concentrating on beauty and the craft of something,
and showing that that kind of entertainment has value
is kind of important to us.
- Which brings me to piracy,
because I know you've talked about that
in the annual posts that the company puts out.
How big a problem is app piracy on paid stuff?
- It's definitely a big factor,
and I think there's only so much you can do for it.
It's a fight you're never going to win.
If you look at any other piece of media,
any kind of fight against piracy
has never been won by the content creators.
The only way it ever gets solved
is by creating a business model and an offering,
that people find it more painful to go and pirate it.
So, if you think about music now,
music has come against this subscription model
where people just can't be bothered
to go and open themselves up to spyware
and go and download illegal tracks
when they could just pay 10 quid a month, you know.
- Before the cameras rolled,
you described Monument Valley as a unicorn.
And clearly, it's at the end of this kind of
power law distribution you've got
on how well apps will do.
Do you think there are lessons
that smaller developers and folks starting out now
can take from that, other than make something
really, really good and be lucky?
- I always think about, yes, luck is involved in
everything anyone ever does,
but you can take certain steps
to kind of stack the deck in your favor.
So, for me, it's always about not necessarily
being so introverted with the thing that you make.
Like, don't be making something just for yourself,
because that's not a good business model.
Like, what you should be doing is, like,
what does it look like people want?
What does it look like people are crying out for?
What are people complaining about
and how can I address that?
They're not necessarily technical or business things,
but it's like, what need are you addressing,
as opposed to just being quite egocentric with creation?
That would be my biggest piece of advice.
Otherwise you'll just have yourself playing the game,
and then you'll never keep your business open.
- The public has decided that they expect apps to be free,
or at least close to it, and the reality is
you're going to have to work hard
to try and make any money from this thing.
And you'll have to figure out
which strategy works best for the app that you've created.
So, here are your options: just charge money for it,
make the basic version free but offer in-app purchases
to unlock the full thing, stick adverts in it,
or charge a subscription.
And if you're like me, there is also some value
in releasing something for free
because it helps your brand.
For my app, I'm not sure
which of those options could work, if any.
I could go with in-app purchases
and charge my users after the first few facts,
or after the first fact of the day,
or I could go with in-app advertising
and have products or companies pay
to have their ads show up next to the facts.
It's what a lot of location-based apps do,
but it's a privacy nightmare.
Or I could go for a subscription-based model.
Users would subscribe to get better and more fun facts,
but I don't know how well that would work either.
There isn't enough content that my app offers
to sell a subscription model well,
and adding all that code, handling all the overheads
is expensive in itself.
As soon as you have payments or subscriptions,
as soon as you're taking money,
your customer support becomes a lot more complicated
and a lot more important.
I am tempted to just make this thing a premium app.
People pay once to download the app,
and then it's free to use, and just for the fun of it,
I could put it on the market for $100
and see if anyone goes for it.
No, no, even as a joke, I cannot bring myself to do that.
Someone might actually buy it,
and I just couldn't live with that.
Did you find, when you went to a subscription model,
that the people who had bought the app,
what they thought was outright at the start,
were angry about that?
- People were really angry.
Whenever you change anything to do with money,
people got so angry when we went to subscription.
And we were really careful about how we did it.
So, when we went there, we said,
okay, if you bought the app,
you're not going to lose any content at all.
Like, you get to keep everything that you paid for.
And in fact, for the rest of time,
you're going to have a discount on subscription for content.
And so, we thought, like, this is a great deal.
And of course, people were really, really upset,
because I think, I mean, even now,
there's still a lot of people who just viscerally
don't like the idea of the subscription.
They want to own software, and I think,
for various reasons, that's not how software works anymore.
- Yeah, I'm getting increasingly annoyed.
The point where I had to change my Adobe subscription,
just buying the suite to now, every single month,
something has to leave my account for this.
I really don't like it.
- So, I think when you have to make a change like that,
which you might think is really, you know,
we thought we were justified,
and you know, I see this all the time,
you just need to be really clear
in communicating with the community.
And also, we tell people, like,
if you have a problem, just email us,
and I personally, like, the CEO of the company
will reply, and I will tell you, like,
what we're going to do about it,
and like, and so, you know,
others who've got like millions of players,
you can't actually do this,
'cause most people just don't care.
- Did you find that people were cloning the idea
and not necessarily infringing copyright or pirating it,
but doing the thing where it is
just a poor imitation but cheaper?
- I used to get worried about it, yeah,
but now it's sort of stopped happening, actually.
Now people stopped doing it
'cause people realize that apps aren't, you know,
that the gold rush has kind of stopped.
I have to say, we just didn't really do anything,
and that's partly 'cause they never
became really successful.
I think if they became successful,
we would have to think about
do we need to do something about our pricing,
do we need to, you know, change our content.
And I think in some ways, like if there was a competitor
that people loved even more
and it had the type of gameplay
or type of sort of, you know,
interaction that was better than what we had,
then we might've copied that.
You know, like, that's good competition.
- Users will pay for what they value most about an app.
If it's a productivity tool or a time saver,
then you might be able to sell it as a paid app.
If you're giving them a steady stream of valuable content,
then you're probably better with a subscription model.
And if your app is purely entertainment,
then advertising or in-app purchases
might be the best option.
And have a look at what your competitors are doing.
Second, freemium.
It is by far the most popular monetization strategy.
It is very hard to compete with apps that are free,
so freemium is the most common option.
With this model, the app is free for users
to download and try, but there are addition tiers,
features, or incentives within the app
that users can choose to pay for.
Back when I was a kid, we called that shareware,
but sure, whatever, freemium it is.
Lastly, piracy.
It's an inescapable part of publishing your app.
There is no real way to stop it
short of continually hunting down pirated copies,
so it may be easier to accept now
that your app might be pirated
and that there will be little or nothing
that you can do about it.
It's easier than it used to be at least.
If your app uses cloud services,
you might be able to limit the functionality
in pirated versions.
Next time, how to make sure your app is not evil.