Guest Piece: Making a Living in the Indie App Economy

Guest Piece: Making a Living in the Indie App Economy

Laura Tallardy lives in Greenpoint, Brooklyn with her husband and their spoiled dog. She wears skinny jeans and works on digital dressup dolls all day, but swears she’s not a hipster. She just released her sixth Corona SDK powered app, Ballet Fashion Show, a ballerina dress-up game for girls. Her other apps Mermaid Fashion Show, Princess Fashion Show, Fairy Fashion Show, Mermaid Princess Puzzles and Fairy Ballerina Puzzles are also available on iOS and Android.

Laura’s guest piece on making money as an indie app developer has been republished with her permission from The Bill Fold.

Laura TallardyI’m an independent children’s app developer who’s been in the iOS and Android app stores a little over a year, and I’m going to talk a little bit about the indie app economy. I’ve got four dress-up apps (mermaids, princesses, fairies and ballerinas, oh my!) that I’ve created myself and two puzzle apps (mermaid princesses and fairy ballerinas) that I’ve created with a partner. My apps have over 400,000 downloads between them, are sold worldwide in up to 21 languages, and have even won a couple awards.

Actually making an app is an entire field of study itself but let’s skip that for now and focus on the finances.

Here are five common ways for an app developer to make money:

  1. Straight-up app sale. If someone buys your iOS app for $0.99, Apple takes 29 cents and gives you 70 cents. Set aside some of that for taxes, and you come to about 50 cents in your pocket for every app you sell.
  2. In-app purchases are when someone downloads your app and you ask them to buy in-game items with real money. Same payment system as above, you get 70 cents, less taxes, so 50 cents for every 99 cents in-app purchase sale.
  3. Ads! You’ve seen them—just by downloading the app and having a ad display you’ve given the developer a few cents, and you’ve dropped a few more cents in their pocket if you’ve clicked on one.
  4. Selling the app as a property on an app buying and selling marketplace. You can sell your pre-made app to someone who then takes over the reins and sells it themselves (and keeps the profits, of course). Apps go for a couple hundred to a couple thousand dollars a pop.
  5. Working for the man! The man being an app development studio, or a client who needs an app. Your cut: whatever you can get up front, and/or a revenue share to split profits down the road.

Now, what about if someone says they got a million downloads, how many drinks should you hit them up for? If they sold a million paid 99 cents apps, they’d have $700,000 before taxes. If they had a million downloads for a free app with a $0.99 in-app purchase required to unlock the rest of the app and no advertising, not everyone would unlock it (typically around one to two percent of people who download an app will make a purchase), so maybe $10,500 before taxes. If it was a million free downloads with advertising and a pay-per-install model, given a few ad network variables you could hope for around $13,000-$19,000 (very rough figure, the numbers can go up or down depending on how long people play the game and a few other factors).

Never mind the hotshots though, what are the chances of making a decent profit? Everyone loves a bit of schadenfreude so stories of failure on the app stores tend to be more common than stories of success, but it’s totally do-able.

While we’re on the subject, let’s talk startup costs. The bare minimum is a computer, a smartphone and some programming knowledge, and you can publish to Amazon for free. To publish in the Apple App Store you’ll need an Apple computer, an iPad or iPhone or iPod Touch, $99 for a one-year iOS Developer License and some programming knowledge. To get around the programming knowledge part you can buy software to help you along in your quest (free to a couple hundred bucks). You’ll probably have to pay a bit for code, art or audio assets, marketing and other sundry costs along the way. My first app cost around $600, but subsequent apps cost much less since I already had the software and developer license. Check out this excellent blog post on how to keep starting costs down from Scott Adelman, an awesome indie dev I’ve created a couple apps with.

But down to brass tacks! If you’ve thrown your hat in the app-making ring, how much can you expect to pull in a month? It’s all over the map. (You knew that, right?) Streaming Colour App Studio did an excellent survey and analysis on app developer income (read lots more here if you’re a chart geek, and a little more here) and here’s the scoop: The bottom 25 percent have made less than $200 since they’ve been on the App Store. The next 25 percent have made between $200 and $3,000, and the 50-75 quarter made between $3,000 and $30,000. The top 10 percent have made $400K, and the top 4 percent are MILLIONAIRES!

The truth is, that’s over the apps’ lifetimes. My fellow developers bring in a range from nothing to extra spending cash to a couple thousand a month and up, depending on how much time they can dedicate to apps (part-timers and students tend to pull in beer money, full-timers and exceptionally dedicated part-timers can make enough to live on if they hustle).

Right now I’m pretty much living off of app money, and I’ve been at this for about 19 months full-time. It’s helped me pay off some youthful debts, deal with day-to-day expenses, save some cash and pay for my doggie’s vet bills with enough left over for some nail polish, maybe a CD and a couple candy bars.

I’ve been living a fairly bohemian lifestyle for the past eight years, so I’m pleased with my riches of nail polish, candy, and CDs. What I’m getting at here is that if you have a sweet cushy job making $80,000 or more, there might be an adjustment period until you reach your preferred app tycoon income level.

App development is hard work—no sugar coating that—and making it a viable job is a delicate operation. But if you have the passion to make an awesome app and aspire to one day hang around the house in your PJs while you watch Netflix and program, then go for it! It’s totally worth it have hundreds of thousands of people download and use your app, and sometimes it makes you look cool at parties.

  • Karan Gupta
    Posted at 09:42h, 04 September

    Excellent article.. I am leading a start up.. so it was interesting to read the article..
    I know the app making business at the moment is getting tough but if we stick to it there is definitely great scope .. My Advice is find smarter ways to get things done rather than be over enthusiastic and spend lots of time trying to recreate the wheel..

    • laura t.
      Posted at 20:03h, 04 September

      karan, you’re correct- work smart, not hard! well, work both smart and hard. it’s a tough market out there 😉 best of luck with your startup!!

  • Phil Smith
    Posted at 10:37h, 04 September

    This is a great read. I took the plunge myself in May this year but am currently freelancing to pay the bills. I’m sorta hoping for a quiet spell where I can finish up one of my own projects soon…

    • laura t.
      Posted at 08:06h, 05 September

      hey phil, thanks for your comment 🙂 congrats on becoming an indie!! i’ve had to freelance here and there too, not the most fun in the world but getting paychecks to reinvest into apps is great. i hope you’re able to dedicate more time to your apps soon! 🙂 good luck!

  • Everson Siqueira
    Posted at 12:09h, 04 September

    Laura is telling the truth. Thank you for being so candid about this subject, monetizing and surviving with apps and games is not easy at all. A few moths ago our app achieved #1 paid iPad App in Brazil, Mexico and Spain at the same day… a few close friends wrote us asking what were the plans for the money (if I would buy a house here in Spain or at least buy a car…) – they were shocked to know that we would just celebrate moderately with dinner in a good restaurant, taking care not to spend all the earned money. There is a lot of exaggerated glamour…

    I just wan’t to highlight that almost all successful games are also investing money in advertising and if you don’t do the same, even with buzz and reviews, chances are you will fall down the rankings anyway getting less and less attention. So, besides Apple’s cut and Taxes’ cut you have your Advertising/CostPerInstall cut… You can really have a huge ‘gross income’ with your app… and end up with very few money.

    • laura t.
      Posted at 08:04h, 05 September

      hey Everson,
      thanks for your reply- congrats on topping the charts!!! it isn’t easy getting up in the ranks 🙂 i’ve had the same thing, some folks think i am rich when i tell them how many downloads i’ve gotten! but i’m in the same boat as you- it’s more like a nice dinner, not a new car or house……… yet 😉
      good luck with the future success of your app- i hope it remains at the top of the charts for a long time!
      cheers, laura

  • Dave
    Posted at 13:06h, 04 September

    I figured I would post my results as well. Just over a year ago I decided to get back into the android app development. I released an app a few years back and then kind of just walked away. I decided to try and release a free app this time with admob ads on it. I told my wife I would be happy with just 5$ a day as I had no idea what to expect from it. The first day the app did 7$ a day and the next day it did 15$ a day. By the end of the first month the app was already doing 150$ a day or roughly 4500$ a month.

    I released a few more apps and they didn’t have as great of success but they increased my daily earnings by around 50-100$. After 7 months I decided to quit my job making $xxx,xxx a year to focus more on my apps. I now make more per month then what I ever made at my last job total.

    I decided to implement some paid version of my app that will remove the ads as well as some in app purchases to enhance the users gameplay. While I wasn’t blown away by the success of these two features it raised my monthly earnings by around 4k.

    I’ve spent only a few thousand dollars total on advertising, graphics, sounds etc etc. All my traffic is from google play search and word of mouth. So pretty much every penny I make is pure profit. With that being said I now I have to cover all my taxes, health care, business fees etc etc.

    My business is growing day in and day out and for 14 straight months I’ve set a new record month. With Q4 coming up and huge advertising budgets for the holidays I’m excited to see where it goes.

    • Joel Li
      Posted at 15:54h, 04 September

      Hey Dave, what are the name of your websites/apps? I’d love to check them out, thanks!

        • Joel Li
          Posted at 08:24h, 06 September

          Thanks dave!

        • dingo
          Posted at 00:54h, 10 September

          dave, thanks for the share.

          and sorry for hijacking.

          but dave would you mind telling us:

          the ad provider(s) you are using, ad types, and also performance? we are still struggling with android ads performance

    • David Rangel
      Posted at 10:40h, 06 September

      That is fantastic Dave. Congratulations on the success so far.

  • laura t.
    Posted at 20:01h, 04 September

    hey dave, congratulations on your success!! great to hear from another indie who is making it work 🙂 it sounds like you have a great strategy figured out, i wish you lots of continued success!! (esp with the holiday season coming up- i’m excited too!) thanks for reading and sharing your experiences 🙂 cheers, laura

  • Antheor
    Posted at 08:59h, 05 September

    Great article !

    I can’t help coming to those conclusions :

    Everybody agree that in-app is the key. I’m not talking about freemium madness but just the ability to unlock or remove ads. That feature is not included in the starter corona plan.

    Considering fresh developers – meaning in the bottom 25 percent , less than $200 -, corona subscription becomes really heavy….

    So, you should help us to take off, maybe a starter plan with very low revenu limit ($5K instead of $100K), but with monetization could be a solution ?
    Or limited in-app (just items for unlock full version or remove ads) ?
    Or something else ….

    What do you think ?

    • Dave
      Posted at 12:22h, 06 September

      In my experience if you have very little downloads in app purchases might make you more money. As your downloads starts to go up though ad revenue generates a lot more then in app purchases.

      It all really depends on your business model though. For example if you’re game is built with a candy crush like business model then in app purchases will generate a ton of money. Only downside about this business model is that most people don’t want to spend money so once they hit that paywall they will just uninstall the app.

  • Olaf
    Posted at 04:54h, 10 September

    Great read!

    I’m wondering – do you marketing your apps somehow, Laura? And if so – how? Does it take a big percentage part of your revenue? Only if you’re fine to share it, of course.


  • Mo
    Posted at 22:30h, 10 September

    @Laura: WOW! Cannot believe I missed your blog post. Nice job! Thanks so much for all the great info and links. Your apps are amazing for little girls. When I look at them, I am always curious about wether the same concept would work for boys? Keep up the great work.

    @Dave: Congrats! Wow all those made with Corona? Please consider writing a blog post here. I would love (and I am sure many more here) to hear more about your app journey!


  • Praveen
    Posted at 04:57h, 31 October

    Thanks Laura. Lovely article! It is very useful to see all the insights from the commenters too!

  • Steve Arnold
    Posted at 02:25h, 22 February

    Interesting read. Thanks, Laura!

  • Chris Beshore
    Posted at 19:42h, 16 January

    I agree completely that passion and perseverance are two of the most important qualities you must have to succeed in the App Store. I’ve been an indie with a regular job for a few years and love it. I created Indie iOS Dev Weekly to help others live the indie life.