(Almost) A Year in the App Store: A 20 minute Case Study

Julian Farrior, CEO / Founder

Snapshot:

• Casual games for a new breed of mobile gamers

• Founded 04/01/09

• Products have been live for 9.5 months

• 21,000,000+ installs to date

• 4 products peaked in the top 5 overall

• 1 product never touched the top 100

• $2,300,000 in net revenue

• $1,300,000 app store sales (net)

• $1,000,000 mobile ad sales (net)

• Raised $145,000 in initial startup capital

• 7 full time employees (+8 contractors)

• Boulder, CO based

#3 Paid #1 Free

#3 Free #4 Paid

#26 Strategy

Ragdoll Blaster

Paper Toss

RDB Lite PT: World Tour

Harbor Havoc 3D

#41 Strategy

? Free

? Paid

? Free

#12 Simulation

HH3D Lite

PT: Ad FreeRagdoll Blaster 2

Strike Knight Physics-Ball

? Free

? Paid

? Free ? Free

NinJump

PT: Time Traveler

Dr. Shocker

Caverns

? Free

Harbor Havoc 3D

? Free

Dynamite Surfing

? Free

Cat & Mouse

? Free

RDB2 Lite

• Assembled a talented (and experienced) team

• Focused on distribution

• Gave away something of value for free, leveraged heavily

• Diversified revenue streams

• App store sales (enormous downward pricing pressure)

• Mobile advertising

• In-app purchases

• Kept production cycles short

• Designed for the medium

• Designed for the audience

• Created economies

• Met the press

• Worked with Apple

• Listened to users

What we did right:

Paper Toss – Monthly Impressions/Levers:

December 2009 January 2010

Total Impressions 402,000,000 411,000,000

House 21,000,000 224,000,000

Advertiser 381,000,000 187,000,000

Total Revenue (net) $468,000 $336,000

App Store Sales $89,000 $217,000

Ad Sales $379,000 $119,000

Monthly Sessions 46,500,000 50,000,000

Monthly Uniques 6,800,000 7,300,000

Ragdoll Blaster Daily Downloads: Catalysts

Featured by Apple in: “What We’re Playing”

RDB Lite Goes Live

RDB House Ads in “Paper Toss”

Featured by Apple in: “What’s Hot”RDB Lite House Ads in “Paper Toss”

Price Dropped from $1.99 to $.99

Holiday Lift

Heavy house ad rotation in Jan.

• Harbor Havoc 3D

• Launched in an overly saturated market (line drawing games)

• Flight Control and 15+ others

• Pushed for press coverage too soon

• App rejected by Apple - delayed launch, press efforts wasted

• Development cycle ran upwards of 3 months

• Did not beta test enough

• Gameplay was not quite ready (FF button, saving game, etc.)

• Botched lite version with wrong free level

• Cannibalized sales

• Overly reliant on potential PT lift

• Designed to be a paid app not a free app

• Would have been better as the latter

• Have not yet diversified into in-app purchases

• Need to scale quicker – window is small

What we did wrong:

What we want to do now:

• Blow out distribution, 2010 focus

• 5-10 free apps per quarter

• Keep the pipe wide and impressions high

• Expand mobile advertising capacity

• Explore in-app purchases

• Continue to build/expand franchises

• Aggressively grow team/output

• Scale revenue curve

• Push free products to other platforms?

• Build our own backend tools?

• Explore turn based gaming

• License content

• Increase social elements in games

• Continue to build a brand

• Free with $.99 buyouts

• Narrow window to truly scale distribution

• Power of free is starting to catch on

• Zynga / CrowdStar / Playfish / Playdom / DeNA will become serious about the iPhone

• What does the Quattro acquisition by Apple mean for developers / advertisers / users?

• Why hasn’t the blueprint for virtual goods yet exploded on mobile?

• Time to move is now on turn based games

• Waiting for Android (or any other comp. platform) to become meaningful

• How do I best communicate directly with users? How important is this?

Concerns:

• Brand will matter (more)

• Distribution will matter (more)

• Data will matter (more)

• Mobile Advertising will change the game

• 2010 will be exciting, fallout/rollup has begun

• Non-gaming audience will continue to expand

• Mitigating volatility in the business is crucial

• Applying portfolio theory

• Maintaining our footprint is critical

• Have fun, it beats working for a living

Final Thoughts (Predictions)

Q&A