For some time I have been meaning to post about a talk I heard at Mobile World Congress, by Rovio (Angry Birds) CEO Mikael Hed. What interested me about this talk was not so much the Angry Birds app itself – now downloaded over 75 million times – but rather Hed’s thoughtful perspective on what it is like to be a software company in the App era. “It’s been a year of transformation not only for us but for the whole industry,” he told us.
Hed started his talk by describing life as a mobile games developer before Apple launched the iPhone in 2007. Rovio was founded in 2003, and did 51 titles before Angry Birds, encompassing “every type of game,” he said.
Before the iPhone came along we were on feature phones only. That market was completely different from the iPhone market today. Looking back on it, it’s a small miracle that there were any game companies in that ecosystem.
Why? Several reasons.
In order to have a game commercially available on a feature phone, you would have to make that game, and make probably nine other strong games in order to be interesting to the carriers. And the carriers would only take your game if you could support all the handsets that their customers had. That meant hundreds of handsets.
Dealing with the carriers was a huge headache.
You would have to make an agreement with each carrier in each country, and you had to have an all-day sales team working for you to do any business at all. It was really expensive.
After all that, the revenue share and payment system was loaded against you.
All operators would take more than half of the revenue that you would make, and then pay you a long time after your game is out. They would report quarterly, and once you get the report you send them an invoice, then they have ninety days to pay. So if by some miracle you manage to get your game onto their devices , the earliest time you would see your money would be six months later.
The system was poor for consumers too.
It was also very difficult for consumers to find these games. It varied a lot across the different carriers, how you find the games. You might have to send an SMS somewhere and get a link back, click on that, download the game, and then hope that the game would actually run on your device; and probably at the end even if you had the latest and greatest phone it was made for the lowest common denominator so it would not use any of the nice features of your phone. So you would get a poor experience, if it worked at all. That was the past ecosystem.
Ouch. Was it really that bad?
The immediate conclusion is that while Apple’s closed and dictatorial iOS ecosystem has drawbacks, it is at least one that works, whereas what existed before was badly broken.
So how are things for app developers now, in the Apple era? Look out for a follow-up post soon. And by the way, it is still by no means easy.