WP7 by the numbers….Exclusive Aussie Developer ROI Calculator / Earnings Projector!

Here at WPDownUnder, as the Marketplace for Apps/games hit’s 30,000 for Windows Phone this week, yours truly has been deep in reflection.  With HP’s sudden exit from the WebOS platform (the amazing HP Touchpad scenes last week) and Brandon Watson’s excellent work to woo WebOS Developers across to WP7 – I wanted to stop, look around and take a deep breath.  I did that, now I would like to share with you the results of this moment of reflection….the exclusive new Developer Earnings Calculator that I have created for WP7 Dev’s!

Most observers and commentators would agree that the actual OS and User experience aside, Microsoft’s greatest achievement to date is arguably the incredible job they have done in drawing Developers to the platform and focusing initially on quality of Marketplace Apps and Games, with quantity building nicely behind this.  The likes of Brandon Watson, Ben Lower and regional Developer Evangelists like Dave Glover in Australia – and others like them around the globe have been hugely successful in driving and supporting the growing Developer footprint.  Underneath this of course, is the design and effort that has gone into the toolkit and actual Developer experience in building content for WP7, which again arguably is second to none.  Just go check all the WP7 Developer Blog posts and the real life examples over the last 10 months or so proving this.

All positive right?  Well not quite.  For Developers, there is an obvious choice that needs to be made over Paid Apps (with trials) or Ad-supported Apps.  Both offer different positives and negatives.  Microsoft in their own Mobile Advertising promotional material for WP7 report this about the paid App experience:

Source MS PDF: Richard Foster_WP7_Developer Case Study_2010

More on paid apps shortly.

Aussie Developer dgaust (myMedia WP7, uController, OZ Travel Advisor) on this recent Blog post points out some of the issues with the Microsoft Pubcentre in-app Advertising mechanism.  For Australian Developers, the first and obvious issue is that whilst you can use this service to deploy-ad supported Apps to the marketplace, Pubcentre <I believe> still requires you to be an US citizen in order to be paid your ad revenue.  For the time being (until later 2011 by all accounts), your App will accrue ad revenue, and you will need to wait for regional release and non-US citizen payment methods to arrive.  Further to this, as one of the more successful Australian Developers, Ad-supported revenue models can be frustratingly low – even with a unique, differentiated or value-add App in the market.

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Jabberworx, another successful Aussie WP7 Developer, maker of Meteor Madness and Chicks ‘N Vixens also posted some details on the sorts of revenue indie game developers see from ad-supported Games.

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Whether paid or ad-supported, Marketplaces revenues will be dictated largely by volumes.  Volumes of downloads, volumes of trial to paid conversions or volumes of page views / Ad impressions.  As a Developer, you can either approach the WP7 platform with a volume mentality yourself – like drift net fishing, by publishing less complex and higher volume numbers of free Apps with Ad revenue to try to maximise your impressions…..or you can produce differentiated and higher-value add Apps, and attempt to capture more revenue per unit, hoping that the App can be successful enough, with some promotion and advertising (see my editorials on this point linked below) to elevate above the growing marketplace pack.

So with this in mind, I am pleased to be able to present a simple tool that I have created for the Aussie (or US alike) Developer that considers the financials of developing for WP7.  Without the sheer scale of the Android and iOs marketplaces (although lower numbers make differentiating easier!) – you may be wondering at the break-even for WP7 development.  You may be a developer that is seeing daily download data from MS in your account – and wondering what the current conversion rate means for ongoing revenue.  Or you may be wondering what price point your brand new WP7 App should be pitched at, and what the potential D/L, conversion rate and revenue modelling may look like.

Click to open Skydrive and D/L the file.

The Tool allows for the entry of cost variables for the Developer (Billable Hours, Hourly Rate, Other costs eg Handset or Marketplace DevHub annual fees).  It then, depending on both the deducted MS fees and relevant tax structures, estimates the net revenue to the Developer based on two important factors.  1. The price point the App is positioned at – with some pre-defined rates and one variable (custom entry option) and 2. the relative impact to conversion rates to paid apps that the various price points may overlay.

 

Importantly, most of these variables are for the Developer to enter based on their own experience and assessment.  The blue fields are pretty straight forward, however the yellow field (being the estimate fall in conversion rate for higher prices) is populated with purely speculative amounts on my part. Depreciation is not included and the model does not take into account potential increases in D/L in calculating revenue or break-even that may arise from share gain by MS for this platform.

 

 

 

 

 

 

The resulting calculations in the tool cover your taxable amounts and Microsoft Revenue cut, your net monthly revenue, revenue per unit and annualised revenue based on a constant D/L and conversion rate.  Finally, it reports a mathematical Break-Even point base don number of months.

The tool is offered with a “user beware” disclaimer – stating that I am not responsible for any financial impact, positive or negative, that may arise from using this Developer tool.  Also, I cannot vouch for the accuracy of all calculations in the spreadsheet linked.  Every best effort was made to check the information – however the reader/use should undertake their own assessment of the tool before making any decisions on its application.

Good luck in playing around with this tool – and I am more than happy to take on board any feedback you may have and any enhancements or changes you would like to suggest!  Happy modelling!

Sheeds.

UPDATE:

This week Ryan and Travis Lowdermilk, of WPDEVPODCAST fame, spent some time discussing this ROI calculator on their weekly Developer Podcast for WP7.  Thanks guys for the shout-out!  I’d encourage all WP7 enthusiasts – whether Developer, Tinkerer or just owner check out their podcast here.  An edited excerpt of the podcast (courtesy of the guys) is here covering their discussion of my Developer tool.  Enjoy!

Click to open their site.

 

Episode 32 excerpt discussing ROI Calculator.

LINKS:

  • As an alternative to Skydrive – it may be quicker to grab the file from HERE on this site’s server:
  • “So your App is in the WP7 Marketplace, What next (maximising your WP7 promotion opportunities with MS” (Pt.1) HERE
  • “Sell, Sell, Sell – Self Promotion outside of the WP7 Marketplace” (Pt. 2) HERE