The App Store’s Giant Pool of Money

Two announcements last week paint a highly contrasted view of the state of the App Store for developers. On Thursday, Apple announced record-shattering App Store revenue over the Christmas holiday week:

App Store customers around the world made apps and games a bigger part of their holiday season in 2017 than ever before, culminating in $300 million in purchases made on New Year’s Day 2018. During the week starting on Christmas Eve, a record number of customers made purchases or downloaded apps from the App Store, spending over $890 million in that seven-day period.

“We are thrilled with the reaction to the new App Store and to see so many customers discovering and enjoying new apps and games,” said Phil Schiller, Apple’s senior vice president of Worldwide Marketing. “We want to thank all of the creative app developers who have made these great apps and helped to change people’s lives. In 2017 alone, iOS developers earned $26.5 billion — more than a 30 percent increase over 2016.”

At the bottom of the press release, Apple says that developers have earned a total of over $86 billion from the App Store. What’s really remarkable is the App Store’s rate of growth: over 30% of revenue since its launch was earned by developers solely in the past year.

On Friday, though, Panic announced the imminent discontinuation of Transmit for iOS. Cabel Sasser:

Transmit iOS made about $35k in revenue in the last year, representing a minuscule fraction of our overall 2017 app revenue. That’s not enough to cover even a half-time developer working on the app. And the app needs full-time work — we’d love to be adding all of the new protocols we added in Transmit 5, as well as some dream features, but the low revenue would render that effort a guaranteed money-loser. Also, paid upgrades are still a matter of great debate and discomfort in the iOS universe, so the normally logical idea of a paid “Transmit 2 for iOS” would be unlikely to help. Finally, the new Files app in iOS 10 overlaps a lot of file-management functionality Transmit provides, and feels like a more natural place for that functionality. It all leads to one hecka murky situation.

As Sasser points out, there are lots of reasons why Transmit may not have been successful enough to pay for its development. Perhaps it was too niche, but Sasser also says that Prompt — Panic’s SSH client — is doing fine. Perhaps its niche is better served by Coda for iOS, which supports the same file transfer protocols as Transmit, but also includes a full website editor. Maybe people using iOS devices — even iPads — don’t really want to use a file transfer app in isolation.

Therefore, sad as it is, I don’t think that Panic’s announcement is necessarily an indictment of the economics of the App Store on its own; but, it is a reminder of that nagging feeling I’ve long had that the environment of the App Store is, for whatever reason, not conducive to smaller developers.

It’s not just independent developers of utility apps that are struggling in the App Store, either. Simogo, a two-person game development studio that built its business on iOS games beginning in 2010, announced last month that their next game would be for consoles after a frustrating 2017:

This year, a lot of time we had planned to spend on our current project, ended up being spent on just making sure that our games would not be gone from the app store. Because sadly, the platform holder seems to have no interest in preservation of software on their platform. We can criticize and be angry and mad about it all we want, but we don’t think that any efforts we put in can change that direction. So, instead, we’re thinking a lot about how we can find ways to preserve our games, and our own history, because it is inevitable that our mobile games will be gone sometime in a distant, or not so distant future, as iOS and the app store keeps on changing and evolving. We don’t have a definitive answer, or any final ideas how this would be possible, but we’ll keep on thinking about it, and try to come up with solutions, and we welcome any input and ideas on this from you too!

And, though these criticisms have often originated from smaller developers, there’s evidence that the App Store is also frustrating for even the most recognizable of companies. Lukas Mathis:

Well, Nintendo’s new console is doing really well, their good iOS game «disappointed» Nintendo, while their shitty manipulative gambling-based mobile games seem to be doing well enough. And now, great iOS devs are leaving the platform.

Maybe Apple makes too many changes every year, and developers simply can’t keep up with those changes and add new capabilities. Maybe some developers are supporting their apps on more platforms than they are actually capable of. Maybe users too frequently demand that developers build and rapidly update apps for all of Apple’s platforms for free. Of course, it’s probably a combination of these factors and plenty more besides.1

I don’t think it would be fair to point out these criticisms of the App Store without also pointing to areas where Apple has made attempts at improvement. Two years ago, Phil Schiller was put in charge of the App Store; a few months later, the average amount of time an app spent in review dropped from a week to just two days. In iOS 11, Apple debuted a new version of the App Store that separated games from other types of apps, and introduced a news-like Today tab that spotlights all kinds of apps.

But something is clearly still not right in the App Store economy if developers are finding it as difficult as they are — generally speaking — to make a living building apps for one of the world’s biggest platforms. Making progress on this, I think, ought to be one of Apple’s highest priorities this year. 2018 marks the tenth anniversary of the App Store and, while they may generally be averse to marking historical milestones, it would be a shame if independent developers had less hope of a successful career this year than they did in 2008. Based solely on the revenue and growth Apple announced last Thursday, there should be hope for developers. The giant pool of money is clearly there; unfortunately, smaller developers simply aren’t seeing enough of it. Whether that change must start with things Apple controls, or developers, or users, I don’t know, but it would be a shame if the App Store becomes the place for virtually all users to download Facebook Messenger, Google Maps, and a manipulative game — and that’s it.

  1. Would smaller developers make a lot more money if Apple’s cut of App Store revenue worked more like a progressive tax policy instead of a flat rate? ↥︎