I’m seeing a trend as I continue to download and test many of the 1,500+ and growing iPhone applications currently available on iTunes: Few of them are really taking advantage of the network effect to build any kind of competitive barrier to entry.
Some apps are safe because they are simply iPhone versions of their normal web service. Google and Yelp are two examples out of hundreds of applications that are simply marking their territory for now.
But most applications are unaffiliated with an established website, which means they need to be able to build a sustainable business on the iPhone alone unless they’re just there for fun. Already we’re seeing applications that are effectively identical to others. There are two chess games for example (Chess Classics and Caissa Chess), both priced at $9.99. There are at least three movie theater apps (Movies.app, OneTap Movies and Box Office). Etc.
There are few feature differences between the applications, which can be quickly updated to match what competitors offer. Those that are trying to charge for their applications are at an extreme disadvantage when they have comparable free alternatives. There’s a march towards free with these apps, and it’s unclear they’ll be able to make money via advertising or other channels.
Take Advantage Of The Network Effect
Without a compelling existing brand or a really innovative product with protectable intellectual property (some of the games fall into this category), the only chance these apps have for long term success is to start thinking about ways to have users interact with each other in order to build network value.
I’ve long argued that social networking on the iPhone is a huge opportunity, and the fact that the big guys are ignoring it for now leaves the door open for a newcomer to get long term market share.
But there are endless other opportunities as well. Take those chess applications as an example. Neither support multiplayer games on different devices. I can play against a friend if he’s here with me, but I can’t have my dad download the application to his phone and play a game of chess with me asynchronously from two states away. The functionality is available to developers, they simply didn’t build it. If they did, there would be a big incentive for chess lovers to flock to that particular application, and it would then be hard for the others to compete. The same thing goes for other games like Scrabble, etc.
My guess is the first breakout hit on the iPhone will be a multiplayer game that is played real time or asynchronously, with each user installing the app on their own phone. I’ve played too many games of Halo on Xbox Live against people who live God Knows Where to not understand the power of distributed game playing to drive software, hardware and subscription sales.
If you are building this kind of application, we want to hear all about it. Someone is going to do this right, and then a flood of copycats will enter the market. Don’t be second to market. And stop treating the iPhone like it isn’t connected to every other iPhone and iPhone user out there in the world.
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Multi-player scrabble?
Mike,
Cellufun’s Chess is already multiplayer both in the downloadable version, which runs on practically every Java phone, and on the iPhone, using the mobile web (that mobile web version also works on practically every phone with a data plan). It’s not clear that there’s a significant advantage to creating downloadable versions of multiplayer downloadable board games, be it Chess or Battleship for the iPhone, when a web version should work just fine.
We are looking at a couple of game concepts that would take advantage of the iPhone’s unique capabilities. We might do something like Chess purely as a test case — but our longer term goal would rather be to do something that stands the iPhone world on it’ head
the big guys are ignoring it because the world doesnt revolve around 1 phone.
looks like a potential..ermm somehow i have doubts
On uk app store there is an app - “versus chess” that appears to be network multiplayer ONLY - it cannot be played offline - in fact the reviewers complain that this will only be effective when there are a critical mass of users and at 5.49GBP this may take some time… perhaps if you plug it a little here and get them to drop their price…?
I think I’m waiting for the thing to become a more stable platform. Think of the number of times your Gameboy DS ever crashed in the middle of a multiplayer game, and then think of how many times an app has crashed on your iPhone. That chess game better be able to same the game state to resume that session. A lot of chess players take their games seriously.
I agree, if done well a simple multiplayer game that leverages the network effect and perhaps iPhone specific features would be huge hit.
Think Tetris, think SuDoku, maybe some elements of Poker, make it multiplayer, throw in location awareness and maybe contact lists and bosh!
Easier said than done but if we weren’t so busy with Socialbang we’d definitely be focused on this.
Is there away for non iTunes/iPhone customers to see which apps are available for the iPhone? Could be a sales driver - showing people the endless possibilities of additional software. Right now I can only get informed by reading some blogs or recommendations now and then.
I would love to see/browse a complete listing.
http://www.pinchmedia.com/ have a set of very useful rss feeds:
New apps - http://feeds.feedburner.com/Re.....PinchMedia
Updated Apps - http://feeds.feedburner.com/Re.....PinchMedia
Top 100 free apps - http://feeds.feedburner.com/To.....PinchMedia
Top 100 paid apps - http://feeds.feedburner.com/To.....PinchMedia
…now if these were parsed into a database with a decent search and tagging frontend and comment adding system- (video reviews etc.), surely this would be a much more useful entity than Apples walled garden… and would no doubt last 5 mins before the lawyers came-a-calling.
Just download iTunes and you can go to the App Store, it’s easy and free.
I don’t want to be connected to Arrington.
“a big incentive for chess lovers to flock to that particular application, and it would then be hard for the others to compete.”
I think you’ve answered your own question indirectly…. The things people will love in an application and that will build long term competitive advantage are HARD…
Apologies for the sweeping generalization, but there are a lot of lazy developers out there who think if they can just get their product in the app store, that in and of itself = success.
Developers… If it’s hard, do it!
I agree - it’s much easier said than done.
ALL of the startups are trying to grow ‘freely’ via viral, and some with heavy vc cash…yet alot perform very lacklusterly
“… to not understand the power of distributed game playing to drive software, hardware and subscription sales.”
Please clarify. Is this a typo or am I missing something
There is a game called Versus Chess that is supposed to work over the net. I have not tried it yet though.
Michael, stop banging on about it then, extract your finger, and get on with it, just like you did with your internet breakfast tray
Michael,
What you want sounds exactly what I am working on. My game dev experience is from Call of Duty 4 and Call of Duty 1 but my iPhone project is not an FPS game. Rather it is a game that as you put it takes “advantage of the network effect”. I am trying to use some of the best social features from the current crop of facebook apps and use the ones that best work with the iPhone platform.
Garet
Fuckin amen to that shit. Every iPhone app has retarded internet-based functionality. They act like this thing doesnt even have internet access.
noobs
In my experience, it doesn’t have internet access that you can rely on. (Having had the experience of seeing the blue line on a map to tell me where I needed to go, but no actual map there because it wouldn’t connect to the net.)
Then there’s the iPod Touch…
yes! as usual, i think you’re right on, michael. and i think the reason that we’re not seeing a flight to these types of applications is that there aren’t many people who have experience designing them. the big players are all geared up to produce multi-$MM titles from regurgitated IP, and the people from those studios who want to make new stuff are leaving to start their own shop out of frustration. what we need in the industry in some creativity and risk taking [with a wink wink nudge nudge to VCs].
There certainly is a lack of multiplayer features in iphone apps and generally the quality of the games is very poor. Let’s hope for us users as well as for Apple that it wasnt enough development time to come up with some kickass multiplayer game; some real-time strategy, 3d sports game or even egoshooter…
This article is bunk! The multiplayer multidevice “breakout hit” already exists… Versus Chess! Do your homework Arrington!
Multiplayer games are obvious candidates for using the network, but there are other applications like our Zenbe Lists app that make good use of the network connection. Users find our feature of sharing lists from iPhone to iPhone very useful. I think we’ll see a wave of mobile applications that will allow that type of on-the-go collaboration. Potentially they’ll have a big impact on users productivity.
We’re doing this, albeit in stages. The first step is to nail down the core application: a flashcard app with sharing capabilities. Then we’ll build out more and more community features.
http://phobos.apple.com/WebObj.....8&mt=8
Mike, Wifi notwithstanding, large scale use of a “killer app” such as you describe could have a significant impact on network utilization. Is it possible that the carriers are discouraging (or at least not encouraging) such applications to avoid swamping their infrastructure?
So let me get this straight, developers should invest tons of money into creating a sophisticated multiplayer/social networking app when the iPhone is trending toward FREE and everyone b*tches about $9.99 apps?
It’s simple business — where’s the ROI? Check out the stats. The majority of apps are < 4.99.
@JT, the ROI Is huge on the app store. Look at some of the sales figures that have been posted on a few developer blogs.
People are buying everything.
Some rants:
- If you live in US and earn $ 100K by year, how many $ 10 (-30% = $ 6) applications do you need to sell to achieve the same income (and with a greater risk)? the calc gives ~16666. Now, if you need developers the figure goes worst. You can outsource it to a cheaper place, but you are seeling software at a minimal price for a very (currently) small market.
- How many small ISVs sold more than 16000 applications? and what was their investment? What is the pure probability? May be going to a Casino is a better idea.
Copying Carmack saying: http://www.appleinsider.com/article.php?id=4437 the iphone is a very good device to game playing, but if big game companies do games, there is a place for an indie industry in two years? and may be the business needs to be complemented with sites, games in pc and requires big investment.
Beyond games, if you look at the current and official iPhone API and compare it with other platforms, the developers need to deal with a surgeon trimmed API, without a components market and with objective-c productivity time, including Apple weird licenses, without WPF, without Flash, etc. What Apple didn’t understand in the past (Developers are the one of the best partners), Apple is not understanding now.
I think you will be able to make successful multiplayer games if you follow the email multiplayer design model. I guess board games lend themselves to be the easiest to think up as turn based, but more interactive or complex games can be developed like Civilization for example.
I actually prefer how these games would function more then real time multiplayer which I think doesn’t really work on phones. For successful real time multiplayer you would need a friend with an iphone who was willing to dedicate an hour to playing a game with you at the same time. It just doesn’t happen. Instead games should “push” a turn to all other players in your multiplayer game and an update should popup on your icon for the game like receiving an email. Players should be able to run as many games as they want concurrently, and just do their move as a reaction to the alert that it is now their turn.
It isn’t so much you need a buzz word “social network” for your game to get anonymous vs anonymous multiplayer just some sort of competitive ladder system. If you are a developer with multiple games you have an optional login/register system for anonymous vs anonymous play. But it wouldn’t be an all encompassing social app just a small addon that would be added to all your games that just sends a little data on wins and losses. Then you can make a website however you want interpreting all that data.
Also the games should cost $10, people will buy your game if it is semi good.
Doesn’t the world have enough multiplayer video games and chess? Is the world really craving for a mobile version of duke nukem 3d multiplayer on your phone? I think we should set our goals quite a bit higher.
Hey Michael ,
I would love to hear your opinion on mobile social networking, to me I would absolutely hate it. Imagine.. people poking you on the street saying hey you’re in my network… or just people trying to stop and talk while your walking down the street. People being able to know where you are. To me this quite possibly the worse idea. Otherwise, its like any other social network.
Sounds more like a problem with your social network than with social networking in general.
The problem is rooted in the fact that iPhone apps CAN’T easily leverage the network effect since the API doesn’t support sending SMS from the phone, so unless you are going to do it from the server through an aggregator (at 3-5 cents per invite, ouch), or do it “out of band” through email, its like Facebook apps without invites - or MySpace apps before they enabled invites/notifications. They just aren’t going to spread quickly.
On top of that, everyone who gets Facebook App invites “has” Facebook, but not everyone (and probably a VERY low percentage of people) in your phone Contacts has an iPhone.
The forthcoming notifications service in the iPhone SDK should enable some of this, and of course apps will take advantage of it to the extent they are allowed.
But even with that, it’s tough to get something to be spread quickly and leverage the network effect when maybe 5% of your contacts have iPhones, and only a fraction of those people would be interested in the app.
If you’re interested in a multiplayer word game with internet support, please take a look at Quordy.
http://quordy.com
It’s probably not the “first breakaway hit”, but it is networked and a lot of fun.
Steve LaVietes
Lonely Star Software, Inc.
Quordy is great fun. I get my ass spanked just about every time, but I still love to play. I made a Flowgram (with a beta invite I got through TC) about what it’s like to play Quordy:
http://beta.flowgram.com/f/p.html#gnuvaxnygywi97
I think the problem right now is that a lot of the applications on the iPhone were rushed and thrown up there just to be first, with a lot of the apps made by people just doing it for kicks. I think the better apps will come with time.
The initial apps are mainly applications that already exist on devices like Blackberry, Palm, and java phones…they’re just now filling the void that the iPhone had. Once the simple free and cheap apps become flooded and pointless, the people and businesses who are really serious will rise from the bunch and provide intuitive, more complex applications that the average Joe can’t whip up within a 3-day weekend.
Also, I believe some developers were hesitant on releasing something too big or expensive on the device, because they get hammered on reviews. One major flaw, is that people are able to review an application without trying it. If most of the people buying the application actually knew what it took to create some of them, they would think twice writing a bad review because the application is $20! BeatMaker, received rave reviews, but there were still some who said… “OMG…$20…THAT IS JUST WAY TOO MUCH… 1 STAR!!” even though they paid $199 for the device and paying at least $70/month for ATT service.
Apple still has a lot of things to fix with the App Store, reviews like I mentioned above is an obvious one, trials, and also the category listings. What’s going to happen when there are 2,000 games? It’s really not practical to scroll through a huge list or use the search tool if you don’t really know what you’re looking for. If they don’t fix that or allow alternative ways of installing applications besides the AppStore, it could be a place where only well-known companies/products will succeed, making it almost impossible for a newcomer to make a splash, and possibly turning off future developers on the platform.
Well, I just check the side-by-side videos of Steve Jobs & Apple’s iPhone 3G and Bill Gates at CES 2008 with Xbox360 & Slash with Gates retiring and Jobs unveiling the new iPhone,both of these guys who have dominated the technology world for the last 25 years. Check their most recent big ticket tech toys.
http://clashorama.com/index.php?id=178
From creators of Caissa Chess
To authors of this article
Did you think that certain restrictions imposed by architecture of the platform or limitations of SDK ? We can use tcp/ip for reliable communication in real time, even in 3G phones it is still best described as crap. We are patiently wait until apple push messaging materializes.
Do you want beautiful screenshot of Caissa Chess ?
Responded to here:
http://iphoneappblog.blogspot......em-is.html
What a great article!! So far the only companies I see actually taking full stab at the network effect on App Store are Whrrl and Jirbo.com. Whrrl is essentially location based, and Jirbo is centered around gaming. The compelling thing about Jirbo and their Avatar network is that it is focused on the most popular activity on the App Store, gaming.
I’ve checked out http://www.whrrl.com/ and http://jirbo.com … All Jirbo’s games hook into Jirbo Avatar which can be downloaded here I think : http://phobos.apple.com/WebObj.....1&mt=8
I think you are completely missing the developer’s perspective. It is almost infinitely harder to write an online application versus a normal one because online hosting is out of reach for most. Not only do you have to be familiar with server side development but also find the right kind of hosting. Couple this with the fact that iPhone basically have no support for proximty network you will not see network apps at least for another two years. All the online apps will be based on existing web services.
Interesting post and one that kinda makes me smile and wonder. I built mobile multiplayer games back in 2000 and for several years after. Games built in WAP on really bad data connections - later in J2ME and BREW (Qualcomm’s technology that Verizon and Alltel use). We were able to have hundreds of users playing simultaneously against each other. These games didn’t have advanced graphics, but they had simple and addictive game play, interactivity and social features that drove repeat usage. Now, with the mobile advertising market maturing, you could definitely make a business around these games.
Michael, I think that you are dead on, but I also think that it is a question of timing. As others have noted, iPhone 2.0 software still has its share of bugs, and the more you push the envelope between client side and network side functions, you are laying little landmines that can blow up in your face.
For example, you need logic to elegantly cope with intermittent connectivity. And Apple hasn’t rolled out its message queuing service for proxying background functions so some of the social, networked underpinnings are primitive at this point relative to the push-pull logic required to create dynamic, interactive apps.
Finally, most of the apps are at the 1.0 stage, which aint bad if you are talking about Trism, Pandora, MotionX Poker, Twinkle and Crash Bandicot, to name a few (yeah, lots of games), but it also suggests that some of the killer social, networked interactivity won’t kick in until 2.0 release, and the iPhone platform is perceived to be more battle hardened.
That said, there are lots of application cases where you don’t need these functions to create network effects; namely by aggregating, shaping, sharing and connecting like minds.
My gut is that a lot of these apps are going to be built around the native rich media functions resident in the device, something that I have blogged about in:
Envisioning the Social Map-lication
http://thenetworkgarden.com/we.....g-the.html
This type of app seems tailor made for the iPhone.
Check it out if interested.
Mark
Great article. Until about a month ago, I would have agreed with you whole-heartedly.
What changed? The introduction of WhosHere by myRete. You should try WhosHere. See if it changes your mind. It’s a free download from the App Store.
WhosHere is a classic example of an application taking advantage of the network effect. The software is a free proximity networking app that is relevant to what you are trying to do right now.
With WhosHere you can do any of the following in real time with other users who are live or offline:
- Look for a date,
- Meet face to face with another user who happens to be close by,
- Getting that last minute ticket to the sold out game, or
- Tell the WhosHere universe what you are doing right now.
Over 1,000 users a day are downloading WhosHere. 40,000 total in one month. We’re getting great feedback. Our users are using this 24×7 and we have, at least, two new couples that traveled across states to meet in person after meeting in WhosHere.
WhosHere takes the chance out of the chance encounter! Users can simply fill out their profile and indicate the age and gender of the person they would like to meet or put their request (e.g. need tickets to today’s Sox game) in the byline.
Plus, users do not have to pay text messaging fees or give out any personal identification information.
Try it and let me know what you think.
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