Gold rush

Every now and then you see a story about some developer making a lot of money in the so-called iPhone gold rush. It’s good some people have had that kind of success.

If you are planning to sell apps in the iTunes App Store (or anywhere else for that matter), you should make sure you have things prepared on your end. In the above story, Ethan Nicholas made $600,000 in a single month on his iShoot game. However in another article, it’s implied that he didn’t have a business setup before hand.

If you don’t have a business setup, you will get hit with personal tax rates. Why lose more money than you have to the Government? Talk to an accountant, get things setup so you don’t needlessly expose yourself and your hard earned money.

I saw another story from today about one developer’s brutal sales numbers. The guy says he spent $32,000 USD and 6 months of development time on his game but only made $535.19 back.

We’ve made a lot more than that with just MMA Tracker. We’re not rolling in cash but we’ve easily broken even on our initial expenses. That was our first goal. If your plan is to make $1,000,000 right off the bat, I’d come up with something more realistic.

We had the first MMA application in the store. It’s a sport that’s growing in popularity with younger people; the kinds of people who happen to own iPhones. It was a small niche that we were able to carve out for ourselves.

We were able to learn the ins and outs of the app store; make mistakes; learn the things you can do on the platform. As I mentioned before, we also broke even doing this. When we are ready to publish our games, won’t have to go through all this. It should be an easier process.

Our development costs are low as we are doing it in-house. We are not hiring contractors. Every app we develop, we learn more and it becomes easier to do future work. If you try and contract out development, you don’t get that expertise. You have to keep paying others for it.

Some people feel going the contract way will lead to quicker time to market and will make more money. Maybe that was true in the very early days, but with 20,000 apps available now I don’t see it as being very viable. The cost of the contractors has to be made up somewhere, so then you end up having to sell your app for $4.99. That may not be very appealing to your target users.

If you look at the leaders in the app store, like Gameloft. They have 300 titles available. I doubt every one of them is success, but you have a better chance of making money on multiple apps than hitting it huge with one really popular one. That’s the difference between being a one-hit-wonder and having a viable business model.

Make sure you have an exit plan too. Don’t just keep spending time/money and hope it works out. You should have clear goals that are measurable. If you don’t meet them, you should be able to walk away without losing your shirt.

If you can’t afford to lose the money you invested, then do something else and spare yourself the heartache.