Guest post: How much does the #1 game on the iOS store earn in a day? $199k (I think)

Editors note: The following guest post was written by Ethan Levy, co-founder of Quarter Spiral a new game publishing startup, and takes an educated guess at how much money the top games in the iTunes store make. His math makes sense and is within the range we’ve heard about from various industry sources. Levy is a 10-year veteran of the video games industry, having recently worked at BioWare’s San Francisco studio as producer for Dragon Age Legends.

Having a #1 grossing app on the iPhone or iPad is the dream of every game developer who ever downloaded a copy of xCode. Few games reach this lucrative goal and information on the top spot’s true value is a closely guarded secret. Even if you are lucky enough to achieve the #2 spot on the chart, there is no ceiling on what the #1 spot could possibly be worth.

My best guess? In the United States, an average day in the top grossing position for the iPhone means $199,245 in gross revenue. iPad $55,789. After Apple takes its cut, this is about $139.5k and $39.1k respectively.

How did I, who has never personally sold a game on the iOS store come to this conclusion? Follow me on an assumption laden journey as I show how I arrived at these figures.

I am probably wrong, but not that wrong

I backed into these numbers using a variety of public data sources – none of which I can personally verify – as well as a few guesses. I am certainly wrong on the exact numbers, but suspect that I am not that wrong.

Also, this estimate is very timely. I expect that total iPhone and iPad revenue will continue to grow over time as more devices are sold in the marketplace and gamers become ever more comfortable spending money in freemium games. The apex of the iOS market’s total revenue is a long way off, and the value of each of the positions in the top 100 grossing will continue to grow until a new platform comes and disrupts the iOS market.

Caveats out of the way, I will now explain my assumptions, show my work and share my estimated value of each position in the top 100 grossing chart in the US for iPhone and iPad.

Assumption #1: Supercell’s $500k days

The rosetta stone of this analysis came from a recent New York Times article on the breakout success of Finland’s Supercell. The key piece of data here is that “Supercell executives say its two games are currently grossing over $500,000 a day, which translates into about $350,000 a day in revenue for Supercell after Apple takes its 30 percent cut on transactions through its iOS App Store.”

This article was posted on Oct 8th. So, my assumption here is that Supercell’s average daily revenue worldwide was about $500,000 for the 30 day period from Sep 8th to Oct 7th.

What was extremely valuable about this data is that in the 30 day period, Supercell had two games, Clash of Clans and Hay Day, in the top 100 grossing charts for both iPhone and iPad in the US. Using App Annie, I made a table of Clash of Clan’s iPhone and iPad rankings and Hay Day’s iPhone and iPad ranking in the US top grossing chart.

Assumption #2: 42% of iOS revenue comes from the US

On Jun 20, App Annie released a very helpful infographic, Game of Phones. The key piece of data here is that 42% of iOS revenue comes from the US. I assume that this number has not changed significantly since it was published.

Assumption #3: iPad revenue is 28% of iPhone revenue

To arrive at this conclusion, I used Apple product data sourced from the website Asymco.

Using the Asymco data, the estimate is sales of 383 million iPhones and iPads split between ~274.7 million iPhones and ~108.2 million iPads. Therefore, iPads represent 28% of the total pool of devices.

I assume that spend on these devices follow the same patterns and that revenue per device category is relative to number of devices. Therefore, I assume that total revenue from iPad devices are 28% of total revenue from iPhone devices.

Assumption #4: Revenue follows a power law

In deciding on an equation to use to model the average daily revenue per US chart position, I initially tried a simple parabola. Although I was able to find numbers that felt reasonable (#1 position grosses $138k) the curve looked too round. I wanted to find a model that had a really sharp knee in it.

So, I sent this picture to my college roommate and bona fide rocket scientist Morgan Hendry:

Morgan suggested that I try out a power curve.

Revenue = Constant + (Coefficient^(100-Rank))

The idea here is that in modeling revenue, Rank 100 would represent 0 on the X axis and Rank 1 would represent 99 on the X axis. Coefficient is the assumed value of the #100 spot on either the iPhone or iPad chart.

Assumption #5: The #100 app makes $3,000 on the iPhone

For this, I have no data to back it up. Not even hearsay. I simply played around with the equation until I found a number that felt right. That number was $3,000 for the iPhone, and using the 28% ration above, $840 on the iPad.

Assumption #6: Revenue is pooled very sharply at the top

With all the other factors in place, it was time to find a Coefficient that, using my daily ranking tables for Clash of Clans and Hay Day, would give me about $500,000 in average daily revenue (worldwide) for the two Supercell games for the 30 day period cited above.

With some trial and error, I found a coefficient of 1.131. Using all my assumptions cited above, this resulted in an average daily revenue (worldwide) of $505,039.81 for the two Supercell games. Bingo!

What’s in a rank?

Given all the assumptions clearly laid out above, I generated the following table for the estimated average daily value of each position in the US top grossing chart for iPhone and iPad:

I know there are many out there who are more experienced than me at math, data mining and modeling, so I expect there to be many suggestions on how to improve these estimates. Also, there are real people with real data that will help inform these estimates. The goal here was not to build a perfect model, but arrive at a reasonable ballpark given publicly available data sources and more importantly, to start a conversation. If you would like to contribute to these estimates in a meaningful way, please reach out to us @QuarterSpiral or by emailing info@quarterspiral.com.

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7 Responses to “Guest post: How much does the #1 game on the iOS store earn in a day? $199k (I think)”

  1. Top Ranking iPhone App Could Earn $199K Per Day | iphone 4S issues says:

    [...] he’s that wrong. Those among you who’d like to check his math can find his workings here, but in brief: he took information published by the New York Times and Apple, concerning the amount [...]

  2. Top iPhone Games Could Make $199,000 a Day | iPhone Informer says:

    [...] Inside Social Games has a guest post from co-founder of Quarter Spiral , Ethan Levy, who takes a crack at the math involving the day-to-day sales of top selling iOS games. We know they make a lot of money, but just how much money? [...]

  3. App Store Top Charts: $199k A Day, Angry Birds SW 2.5 Hours | iPhone App/Game Reviews, iPad App/Game Reviews, Apple, Mac, iOS, and App News At AppleNApps says:

    [...] to reach the top grossing charts. Today, Ethan Levy of game development start-up Quarter Spiral, claims the top selling apps could make $199,000 per day on the iPhone, and $55,000 on the iPad. Those are [...]

  4. This week’s headlines from across Inside Network says:

    [...] Guest post: How much does the #1 game on the iOS store earn in a day? $199k (I think) [...]

  5. True to Design: What I’m Reading « Managing the Game says:

    [...] Guest post: How much does the #1 game on the iOS store earn in a day? $199k (I think): http://www.insidesocialgames.com/2012/11/07/guest-post-how-much-does-the-1-game-on-the-ios-store-ear… [...]

  6. 估算位居美国iOS排行榜前100名应用的日均收益 | 糊涂熊博客 says:

    [...] I know there are many out there who are more experienced than me at math, data mining and modeling, so I expect there to be many suggestions on how to improve these estimates. Also, there are real people with real data that will help inform these estimates. The goal here was not to build a perfect model, but arrive at a reasonable ballpark given publicly available data sources and more importantly, to start a conversation. If you would like to contribute to these estimates in a meaningful way, please reach out to us @QuarterSpiral or by emailing info@quarterspiral.com.(source:insidesocialgames) [...]

  7. News Roundup #7 (13/11/12) says:

    [...] idea for an iPhone/iPod/iPad/iPoop app? Because if you do you should probably go ahead and make it. Ethan Levy of Quarter Spiral reckons, by his calculations, that popular apps can earn around $199,000 a day for an iPhone app, [...]

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