The iPhone Gold Rush

Good article for all those game developers out there
-Scott

April 5, 2009
The iPhone Gold Rush
By JENNA WORTHAM
IS there a good way to nail down a steady income? In this economy?
Try writing a successful program for the iPhone.
Last August, Ethan Nicholas and his wife, Nicole, were having trouble making their mortgage payments. Medical bills from the birth of their younger son were piling up. After learning that his employer, Sun Microsystems, was suspending employee bonuses for the year, Mr. Nicholas considered looking for a new job and putting their house in Wake Forest, N.C., on the market.
Then he remembered reading about the guy who had made a quarter-million dollars in a hurry by writing a video game called Trism for the iPhone. “I figured if I could even make a fraction of that, we’d be able to make ends meet,” he said.
Although he had years of programming experience, Mr. Nicholas, who is 30, had never built a game in Objective-C, the coding language of the iPhone. So he searched the Internet for tips and informal guides, and used them to figure out the iPhone software development kit that Apple puts out.
Because he grew up playing shoot-em-up computer games, he decided to write an artillery game. He sketched out some graphics and bought inexpensive stock photos and audio files.
For six weeks, he worked “morning, noon and night” — by day at his job on the Java development team at Sun, and after-hours on his side project. In the evenings he would relieve his wife by caring for their two sons, sometimes coding feverishly at his computer with one hand, while the other rocked baby Gavin to sleep or held his toddler, Spencer, on his lap.
After the project was finished, Mr. Nicholas sent it to Apple for approval, quickly granted, and iShoot was released into the online Apple store on Oct. 19.
When he checked his account with Apple to see how many copies the game had sold, Mr. Nicholas’s jaw dropped: On its first day, iShoot sold enough copies at $4.99 each to net him $1,000. He and Nicole were practically “dancing in the street,” he said.
The second day, his portion of the day’s sales was about $2,000.
On the third day, the figure slid down to $50, where it hovered for the next several weeks. “That’s nothing to sneeze at, but I wondered if we could do better,” Mr. Nicholas said.
In January, he released a free version of the game with fewer features, hoping to spark sales of the paid version. It worked: iShoot Lite has been downloaded more than 2 million times, and many people have upgraded to the paid version, which now costs $2.99. On its peak day — Jan. 11 — iShoot sold nearly 17,000 copies, which meant a $35,000 day’s take for Mr. Nicholas.
“That’s when I called my boss and said, ‘We need to talk,’ ” Mr. Nicholas said. “And I quit my job.”
To people who know a thing or two about computer code, stories like his are as tantalizing as a late-night infomercial, as full of promise as an Anthony Robbins self-help book. The first iPhones came out in June 2007, but it wasn’t until July 2008 that people could buy programs built by outsiders, which were introduced in an online market — called the App Store — along with the new iPhone 3G. (The store is also open to owners of the iPod Touch, which does everything that the iPhone does except make phone calls and incur a monthly bill from AT&T.)
There are now more than 25,000 programs, or applications, in the iPhone App Store, many of them written by people like Mr. Nicholas whose modern Horatio Alger dreams revolve around a SIM card. But the chances of hitting the iPhone jackpot keep getting slimmer: the Apple store is already crowded with look-alike games and kitschy applications, and fresh inventory keeps arriving daily. Many of the simple but clever concepts that sell briskly — applications, for instance, that make the iPhone screen look like a frothing pint of beer or a koi pond — are already taken.
And for every iShoot, which earned Mr. Nicholas $800,000 in five months, “there are hundreds or thousands who put all their efforts into creating something, and it just gets ignored in the store,” said Erica Sadun, a programmer and the author of “The iPhone Developer’s Cookbook.”
The long-shot odds haven’t stopped people from stampeding to classes and conferences about writing iPhone programs. At Stanford University, an undergraduate course called Computer Science 193P: iPhone Application Programming attracted 150 students for only 50 spots when it was introduced last fall.
“It completely surpassed our expectations,” said Troy Brant, a graduate student who helped teach the course. Turnout has been equally strong this semester, he said.
As early as the summer of 2007 — a week after the iPhone first hit the market, and long before Apple let outsiders sell software for it — Raven Zachary, a technology consultant, decided to organize an informal get-together for fans of the device. The event, held in San Francisco, drew nearly 500 people.
Since then, he said, dozens of similar conferences have taken place around the world. “The concept has spread quite far and wide,” said Mr. Zachary, who boasts on his Web site that he “directed the launch of two top-20 iPhone applications,” including one for the Obama campaign. He expects the turnout at his conference this summer to be huge. “We may have to find a larger venue and hold simultaneous satellite events to accommodate attendees,” he said.
The rush to stake a claim on the iPhone is a lot like what happened in Silicon Valley in the early dot-com era, said Matt Murphy, a partner at the venture capital firm Kleiner Perkins Caufield & Byers who oversees the iFund, a $100 million investment pot reserved for iPhone applications.
“People are realizing that by developing in their garage with a couple dollars, they could be the next Facebook,” he said. “It’s still early days for mobile development, but those days are coming.”
This time, however, the scale may be smaller. While iShoot is never going to be the next Google or Facebook, it is the type of program that people with minimal expertise view as within their reach. The fact that Apple handles the financial side of the transactions makes it particularly easy for mom-and-pop developers to sell their homemade software all around the world. (Apple keeps 30 percent of the revenue from each sale and gives the rest to the developer.)
“Even if you’re not a programming guru, you can still cobble something together and potentially have great success,” said James Katz, director of the Center for Mobile Communications Studies at Rutgers University.
If there is ever an iPhone hall of fame, Mr. Nicholas’s portrait might hang next to that of Kostas Eleftheriou, a young Greek entrepreneur who lives in London. He and two friends wrote a program in seven days called iSteam, which fogs up the face of an iPhone like a bathroom mirror. They made more than $100,000 in three months.
It is little more than a party trick. When someone swipes a finger across the phone’s surface, iSteam’s pretend moisture is wiped away with a realistic-sounding squeak. When the phone is tipped on its side, droplets of condensation roll as if pulled by gravity. “It’s quite a good illusion,” Mr. Eleftheriou said. “Everyone wants to show their friends.”
The application hit the App Store in late December, and already Mr. Eleftheriou, who is 25, has decided to postpone graduate school and seek his fortune as an iPhone developer. He and his friends Vassilis Samolis and Bill Rappos, both 22, have set up a company called GreatApps and have hired two more developers.
“We don’t want to stop with iSteam,” Mr. Eleftheriou said. “Our next step is to establish ourselves as a big player in the application store.”
Both the iSteam team and Mr. Nicholas were spurred by the success of Steve Demeter, an inspiration for starry-eyed iPhone developers. Mr. Demeter, who is 30, wrote the game called Trism, which involves aligning rows of brightly colored triangles; he released it into the App Store last July and says he made $250,000 in the first two months. He immediately quit his job writing software for Wells Fargo and started his own iPhone game development company, Demiforce.
It doesn’t take much money to write these programs, Mr. Demeter said, and a larger budget doesn’t always mean more success. “Novel concepts that come out of left field are going viral,” he said. “These are the kinds of applications that will endure.”
The mobile frenzy hasn’t gone unnoticed by other major cellphone and software companies. Last week, Research in Motion opened an application store for the BlackBerry. Google recently began selling applications based on Android, its operating system for cellphones. Nokia is in the early stages of opening a store for its handsets, and Microsoft is creating a store for phones running Windows Mobile.
As for Mr. Nicholas, he has sprung for a family vacation to Washington, hired a nanny and founded a company called Naughty Bits Software to keep developing iPhone programs (so far he is the only employee). “Oh, and I bought myself a new laptop,” he said. “I figured I deserved that.”
He is in talks to adapt iShoot to systems other than the iPhone, and says that investors and big video game companies have approached him about financing his sophomore effort. He is also in full-swing inventor mode, working on a new game that he will not describe for fear that another developer might poach it.
“I’m going to milk the gold rush as long as I can,” Mr. Nicholas said. “It’d be foolish not to.”