Apps fallofangrybirds

Published on August 19th, 2012 | by treysmith

122

The fall of Angry Birds


Last year I held a special webinar with an in-depth analysis of Angry Birds VS Tap Pet Hotel and how premium .99 games were going to be overtaken by free to play games.  That sounds obvious now, but remember, this was 12 months ago and at the time I held the webinar Tap Pet Hotel was only a few months old.  Many people on the webinar didn’t really know how social games worked.

So far the the app store has gone through two phases.  The second phase completely took over about 6 months ago.

Phase 1 of app store monetization was Premium games (.99 titles)

Phase 2 is “Free to play” and it’s RULING the app store.

Phase 2 of the App Store:  The fall of angry birds

Angry Birds currently doesn’t have ANY of it’s games in the top 50 grossing iPhone charts.  The closest is the original title at #52:

iPad is a similar story.  Right now the highest grossing Angry Birds game is sitting in the #55 top grossing position:

What’s interesting about the iPad version, is it’s currently NUMBER 2 in the paid charts:

If the #2 best selling paid iPad game is not in the top 50 grossing, then what type of apps are currently dominating the app store in terms of profits?

As you probably guessed, free to play:

Now, I knew free to play games were dominating the scene before I started this post, but I did not know it was THIS bad.

Right now, 18 of the top 25 grossing of all apps are Free To Play Games (72%).  Also, it should be noted that 22 of the 25 top grossing apps are in the games category (88%), confirming the fact you need to be into games if you want to have the biggest potential payout.  The reason for this is people have a stronger emotional attachment to games than any other type of app, therefore they are more likely to spend money.

How are these Free to Play games crushing it?

After digging deeper in these top grossing apps, you can see they consist of nearly every free to play genre there is… Social games, click games, gambling games, turn based games, card games, etc but all of these have TWO things in common:  They each have lots of in app purchases and they encourage the user to buy stuff (a call to action).

This is the basics, but it’s SUPER IMPORTANT, here’s how:

A very small percentage of people buy stuff in games.  Of this small percentage you have people who will spend a LOT.  These are your die hard fans. I know, because I am one of them and won’t bat an eye spending $50 in a game I like.

Now, in Animal Mall for example, our call to action is very simple.  When a user tries to buy something and they are out of money, we simply say “You don’t have enough coins for that, would you like to buy some?”.  We do the same in every game we have.  I’ve tested this and it increases revenue a TON.

I recently read an interesting game development article that got me thinking about writing this post.  It was about a game called Gasketball that was from the same two man indie studio that made Solipskier, which was a pretty big hit.

They discuss how this new game bombed and even attempt to blame free to play games which the developer later retracted, saying he was upset at the time of interview.  After reading the article I immediately knew what went wrong:

1. They had limited in app purchase options

2. They didn’t have a call to action

They literally had friends trying to support the game and didn’t know how.  Also, they didn’t have mass in app purchases, just a few including one to unlock the game.  This is a bad in app purchase that has no emotional attachment and doesn’t give the player something to strive for.  I could go on about this forever, but basically you either want an in app purchase to solve some curiosity for the player or benefit gameplay.  Boring in app purchases like “full game” or “remove ads” are not as effective.

Let’s discuss more proof that multiple in app purchases increase revenue:

Remember above when I showed that Angry Birds was #52 grossing in the iphone app store?  Remember, that was the ORIGINAL version of Angry Birds.  If you look at the top paid charts, you’ll see Angry Birds SPACE is ranked higher than Angry Birds ORIGINAL… if that’s the case, then why is the original making more money?

Yup, they recently added a ton of in app purchase options:

It’s pretty simple really… the more options you give your customers to purchase things the more money you will make.

This is because there are only a small percentage of users out there who spend money in games (like me).  Even though the percentage is small, typically those customers are interested in spending a LOT if they like the game (again, like myself).

Of course, this only works if you provide VALUE and things they are interested.

How much are these games making?

Let’s talk about how much money some of these games are making at the top.  On last years “NDA Webinar” I figured out it was about $2,000,000 – $3,000,000 a month.  Well, let’s just say the landscape is vastly changing with extreme speed.

CSR Racing (currently ranked #9 on the grossing charts) just released some data on their top grossing numbers.

In the last month, this single game generated over $12,000,000 on iOS alone.  They have not ported the game to Android yet.

That is $400,000 PER DAY and they aren’t even in the top spot anymore.  Pretty awesome.

Now let’s take an app that has done even better, Dragon Vale.

In the past 3 months, it has not dipped below TOP 5 grossing a single time on the iPhone or iPad.  This is outperforming CSR racing, but let’s say it’s making $300,000 per day on the safe side.  25% less than CSR claimed with lower rankings.

If this is the case and it holds ranking for the rest of the year, then this single game is worth $109,500,000 PER YEAR on the low side.

Amazing.  Hat’s off backflip studios, it’s a great game that innovated with theme and design instead of copying everyone else which is common in the marketplace.

Does this mean that paid premium games are DEAD?!

No, not at all.  We are releasing Milo and the Shadow as a paid game in a couple months.  I do think trying to compete in the market without in app purchases will be tough, but there will be many independent developers able to gain traction and break the top 25 charts now that bigger developers are focused on free to play.

In closing, that leads us to one final question… what is Phase 3?

I’ll write more on this later, but I think this will be the phase when we start seeing games go TRULY social with increasingly awesome online abilities.  It always bugged me the first wave of free to play facebook and mobile games called themselves “social” as there was not much social communication going on.  I think we’ll see a big shift in this and we’re already planning changes for future projects.

Thanks for reading and take care,

Trey Smith

P.S. – I would also like to clarify that I don’t think the Angry Birds brand is going to die out.  I am sure they will be around for ages and have many different games, merchandise and all sorts of crazy things.  The point of this post is show how Free To Play has taken over the once “king of grossing” and changed the landscape dramatically.

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About the Author

Trey Smith is the founder of Kayabit, a game company with over 10,000,000 downloads on mobile devices, Secret Headquarters, Inc, a marketing company that teaches entrepreneurs how to build their businesses and L-System records, a house music label from San Diego, CA.



122 Responses to The fall of Angry Birds

  1. Pingback: Weekly Tech News for August 27, 2012 | ex post facto

  2. Pingback: Fall of Angry Birds & some other posts you should read — Tech News and Analysis

  3. Greg says:

    Very interesting read, thank you! I just wish you went more into detail on what these “meaningful in-app purchases” entail. Do you have any specific examples for those of us who aren’t familiar with the games you listed?

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  5. Great!!!
    Very informative . Thanks

  6. vinay jha says:

    If anyone want ipad, iphone or android app, I can develop it.

  7. Pingback: Sunday, August 26, 2012 | Quickthink2

  8. Nice article very informative stuff in this. Looking to start making my game apps for my brand and came across this. I can see a bigger and better picture now…

  9. Markus says:

    Signing an NDA before watching a webinar? Wtf dude, I didn’t even have to sign an NDA before I started my work.

    • duggi says:

      pretty sure you had to sign an employment agreement though. ever read the IP clauses in it?

    • treysmith says:

      Honestly man, I wrote this post for previous customers and clients of mine. I had emailed it to them and they all know I do a yearly webinar like this where I show stuff I’m working on behind the scenes with the company. I had no clue other people would be reading this until I woke up to the nice surprise of 25,000 clicks form hackers news! (sweet).

      I’ve cut out the intro so it’s not confusing to the new people. Thanks.

  10. Pingback: Are Games Paving The Future For News Profits? | Vouchification

  11. roselan says:

    the real question is when players will stop spending.

    To what I have seen “call to action”, golden bullet or other pay4win schemes work very well.

    It seems that invariably, big spenders reach a threshold, and stop spending/quit the game as they feel they are “milked”, and wonder what’s the point. Then they stop spending all together and are somewhat lost for f2ps, as they become distrustful. They feel the gameplay is not about racing a car, shooting a dragon, or rising a bird, but pay to progress.

    However, ancestor f2p on the PC, like ogame (2002) or hattrick (1997, and has no “call for for action” model), as well as Korean games still live quite well. New generations of players replace old ones, and they are living proofs that their lifespan is quite longer than paying games. They have their issues (ghost towns, expensive 2000′s infrastructure and technology, grunting community, etc), but their experience serves well.

    tl;dr: I’m concerned about the fall of “call to action”, but not right now, if that make sense…

  12. Lirodon says:

    Just in case you haven’t noticed this; Angry Birds are still in the top apps on Android, especially because they have free-to-play versions with advertising rather than “just” the premium/ad-free versions.

  13. Pingback: The Angry Birds Era Is Over | feed on my links

  14. ryan says:

    I’d be interested in listening to your webinar. Is there some sort of mailing list you have where I can signup?

  15. Dmitri says:

    Wow, amazing numbers, thanks for this research. Also want to get into this industry, and if somebody here in comments wants to go into it as well and looking for partners, let’s talk. My email is fotkin@gmail.com

  16. depatru says:

    The Skinner Box.
    I feel bad for those who are fooled into spending a lot of money in shitty games.

  17. JohnUhrig says:

    Hey Trey… thanks for the article.

    How hard/ difficult is it to go back into my existing games and add in app purchases? Is it a nightmare… or should I just add with my next game release?? Your input would be appreciated?

    Thanks

  18. Ricardo Teixeira says:

    Great Post Trey!

    I’ve been following you, Chad and Amish and you all complement.
    I’m developing 2 utility apps, so I can gain some experience before going to the big category of games.
    I’m curiouse to know how much do you make each month for how many apps so we can compare it to this numbers. Chad say in his book that we can make between 1.000 and 3.000 usd per app per month… What is you opinion on that.

    Greetings from Portugal!

  19. Pingback: iPad: IPad: Why are iPad apps often more expensive than iPhone ones if at all? - Quora

  20. Steve says:

    Hey Trey!

    Really enjoyed the article man – I had no idea how lucrative in-app purchases have been.

    Maybe I’m looking in the wrong spot, but I’d love to sign up for email notifications of when your future posts are released, and couldn’t find that (or RSS).

    Regardless, great stuff dude.

    -Steve

  21. Wes says:

    Good info, Trey! I believe you’re on target regarding the call to action and making meaningful in-app purchases available and reminding players about them. Of course, the game itself needs to be fun and engaging in the first place for any in-app purchase to be considered worthwhile.

  22. Pingback: Az Angry Birds zuhanása | Clear Online

  23. Wally says:

    Trey, working on perceived value testing soon with a freemium version next to a paid version which costs a lot. Theory is that more downloads happen if free version is a “great deal” (paid one is $4.99) versus the “good deal” (paid version is $.99). More downloads… More money!!! Have you tested this?
    Great post!

  24. Colin says:

    Trey – congratulations on your success and this post gives an insight as to why thats happened. As a person in their 70s I find on one hand that its an insane amount of money to be turning over in the virtual space. But on the other I argue that its better than manufacturing masses of inane plastic things to be used a couple of times then thrown in the waste stream for 100s of years.

    I was wondering is there a linkage from the games to offers in the offline world? Vice versa an offline app has incorporated in it a game which give the player credits, upsells and viral aspects for that app?

  25. Antonio says:

    Hello Trey. Love your blog!
    I have an idea for a free-to-play game with plenty of in-app purchases and calls to action, which will require users to write words. A keyboard would do that on a laptop etc.
    So my question to you is what have you found to be the most efficient ways of getting people to write words on a small screen (i.e. smaller than an iPad), where no keyboard is available.

  26. Earl says:

    Nice post. I have a question. Most of these games require a server. How would I get one for an online game and what would be the average monthly cost?

  27. Mike says:

    I’m not sure if it’s going to be phase 3 or phase 4, but i predict that the bridge between mobile and console will be the next big thing.
    In between your smartphone and your xbox 360 lies the OUYA – recently funded on kickstarter for the tune of 8million. Apple will be sure to follow by integrating games into apple tv.
    If you wanna be among the first on the next big bandwagon, then start investing your time into this area. This phase will take advantages of both screens, micro and macro (big screen tv), as well as the social and convenience aspects of being able to take your game on the go, or play it at home.

  28. baza says:

    Excellent post. Keep it coming Trey.

  29. Frank Edens says:

    We (Germans) can learn so much from you. I don’t even remember to read such a effective research. No fluffy talk, just pure to the bones :) thanx trey!

    Frank

  30. jon says:

    Hey great stuff trey. I’m just starting my first game man its been crazy learning experience. Trying to figure it all out has be a learning curve. I had to write a massive 30 pages document to detail all the aspects of the game to screen etc etc I wish someone else could have done that and i guess i could have told them that information while they made it but, i didn’t want to have additional costs suddenly appear. I tried hourly route but have gone for fixed with tiny milestones instead this way they know what they will get, i know how much ultimately i will get charged for total game and i can still control the development.

    I think there are more programmers catching on to the fact that people are jumping on the gaming and they are raising their rates. Stupid rates man.. I mean most games should be able to be made under $2000 and most $1000 but there are programmers wanting to charge way above that.. I refuse too… My first will be under $1000

    • treysmith says:

      Thanks Jon and some quick advice:

      Instead of giving a 30 page document, create a powerpoint/keynote video showing them the basic gameplay. Get a price for the basic gameplay of the game and start pricing them on adding features.

      This has been cheaper for me EVERY TIME, but know that some programmers will not like this way. There are many times I have not hired a programmer because they demanded a spec sheet. I can’t stand spec sheets (unless it’s on some huge project).

  31. Pavel says:

    First of all, great article. Second of all, the income numbers in the article sound great, but in reality the net income is much, much smaller. :)

    Why? Simple – how much $ is DragonVille (and all other games like that) paying developers like you and me (through Charboost, revmob, etc) to acquire users? Per day? I would estimate >100K per day, but that would be on very light side of estimation.

    There is of course nothing wrong with it, but it does bring those numbers down. For example, if they know each new user makes them $3, they can afford to pay $2 to acquire him/her.

    But talking about the $3 they make without mentioning the $2 they spend, is inaccurate.

    Now, how much is Angry Birds paying for their users? I haven’t seen any of their ads in any of my apps. So in reality, Angry Birds at #52 might be making MORE $ per day than any of those TOP 10 Apps.

    And there is also a little issue of Maintenance costs. You release a paid app, and you pay ZERO in upkeep. You release a freemium app, and you now you have server costs, internet traffic costs, making sure the server is on-line all the time, etc. Development cost is up as well.

    Can you talk a little about how much $ it cost on the server side to run “Animal Mall”? When I first downloaded the game, the server (or the connection) was down for about a week, so the game couldn’t be played at all, it just wouldn’t start.

    • treysmith says:

      Dragonvale actually doesn’t spend as much to acquire users as other companies. If you notice, you don’ see them as active as Pocket Gems, TinyCo, etc.

      I really like their strategy which is based on having a huge network and driving a ton of their own users to their apps.

      Don’t get me wrong though, they are spending money for sure and I’m of course talking about gross numbers, but even if they DID spend 50% of their gross income I seriously doubt Angry birds would touch it in the #50 spot. I’ve been in the top 50 grossing before and it’s not near the numbers at the top!

  32. Little Mike says:

    Trey, you inspire me. Seriously, I try to read everything you put out. I’m still in the process of trying to find good programmers/designers, but one day I hope to have a business like yours. Thank you for always delivering great information.

  33. Ed says:

    Great post, Trey. I have been asked to help some large organizations with making games for their respective industries. They almost always start off telling me that they want to charge $0.99 for the “impulse purchase”. I always bring them back to the Angry Birds Top Paid vs Top Grossing discrepancy. Now, I’ll point them to this post.

    Ed

  34. Definitely something to think about, I’m planning on entering this industry, so I plan to check out your next webinar. (do you have a replay of your 1st one?) Looking forward to meeting & networking with you.

    Mr. World “FAMOUS”

  35. Matt says:

    Great Post. Hard to comprehend $400,000/day. That’s pure insanity.

    I’ve tried to create some actual social integration over and above “tweet my score” type stuff in a few of my apps with great success. Adding a commenting system to my apps has created a real community in some of them where users can get to know each other. It not only creates a ‘tribe’ around the app, but also provides some social proof that it’s popular.

    Global score counters have also been very interesting like “500,000 zombies killed worldwide”

    Features that can build a connection between real people through a game or app is where the next wave of innovation in mobile games is going to be. You can see hints of that in games like DragonVale and Draw Something that have been able to grow virally through friends playing friends.

    Excited for the future.

  36. Jacqueline says:

    Great information. As a newbie to the game app market, your clear insights were eye opening. I’ve been asked to invest in a new app and have been trying to figure out whether it’s something I should do. Armed with this info, I think I need to understand whether there is a call to action and a way to build more revenue within the game. Do I have it right? Any other thoughts?
    Your loyal follower,
    Jacqueline

  37. Thordur says:

    Intresting how the app game changes very fast.

    One thing here off topic, how and what is the best way to make a network so we can create traffic to the flagship app “money app”

  38. None of these beat my FaceTaze idea! lol. It does seem that the market is shifting. It will be cool to see how the trends continue through this year and next.

  39. Mark says:

    Hey Trey gotta thank u. got one of programs u were promoting for apps just hit 10k last month and growing based on what we learned!!!
    You rock brother

    M

  40. Jayden Lawson says:

    Great post, as always Trey.

  41. Nez says:

    Great article Trey.

  42. Wade says:

    Great stuff, Trey. Thanks for keeping me thinking like a PROFITABLE deveopler. Absolutely LOVE the penny arcade article you referenced and all the comments below it. I know I want to make great stuff, but I sure do NOT intend to be a financial martyr as a developer. I intend to create what I think is quality for my users, and while I have sometimes been a bit jealous of some of “those rich bastards” (who sometimes make great games and other times make what I think is crap), I’d much rather be the wealthy developer being criticized for making too much money than another self-righteous victim “entrepreneur” who makes no money. “Who is John Galt?”

    • treysmith says:

      Man you hit the nail on the head. It’s tough because video games are an art and a business. Many people go completely broke focusing 100% on the artist aspect. The gaming world is competitive and a real business. You definitely have to think about monetization strategies, what is working for others and how to make your game convert to cash.

      • E.R. says:

        Hi Trey, great post! Completely agreed when you say that video games are art and business, and is a very competitive market. I would like to share some private info with you. Pls contact me at rossievaldo@gmail.com Regards.

  43. Yeah I totally remember that webby. Which is why I only do freemium apps. I recently split tested this about a month ago and wrote about it. I switched to paid status on all my apps. Made some money. I increased the front end purchases but the in-apps was a huge drop in revenue so I was loosing money.

    Point here is that I make more giving the app away than selling it. You get more downloads which is the same as traffic and we all know that the more traffic, the more sales. That’s if you have a good converting sales page. In our case it would be a good, addictive game which makes them buy your in-apps.

    Great post Trey. I know you’re a stats guy and you’re always looking for these little gems. Thanks brotha.

  44. Jorge Diaz says:

    I attended that webinar and it was awesome! are you planning on releasing game source code again?

    Great post!

  45. Rene says:

    Great post Trey! I think I have to go back into game developing… ;) This looks really promising!

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