24 dic. 2010

The Android apps economy: a new mass-media

Despite its enormous and increasing growth and real leadership, Android apps economy is still not understood by most companies and developers. Much part of the confusion comes via comparing it with iOS environement, but that is a common mistake we helped to clarify in a previous post, which may be summarized with this sentence: Apple is a hardware company, so iOS is an strategy to sell devices, while Google is an ad seller firm, so Android is the weapon to dominate a new world: mobile, a space where Google wants to be ubiquitous.

Developers who do not follow this statement try to repeat on Android what learned on iOs, but usually this tactic may not work properly. The first common complaint has to do with the giant amount of free apps: "Android users do not buy anything, it is a different culture". The conclusion most people obtain is that the Android apps economy is not worthy. It is sadly odd that many big names in the industry have not entered Android Market. The first ones (Zinga or EA) are just doing some experimental movements.

But it looks like they may learn soon what Rovio and other smart companies have experienced: they earn even more on an add-financed-free-app model than in a pay-to-buy-app approach, and money is even bigger than on iOS.

What companies should look at is the mobile ecosystem as a new mass-media. That is a common sense statement big Tomi Ahonen likes to repeat as a mantra. And it is completely true. And what does it mean to developers?

If we think in mass-media, as radio, television or newspapers, there are usually two common business models: pay-to-consume and ad-supported. These two business models may work also together, and that is very common. In fact, the first one works alone if and only if the content deserves a payment because it has a very big demand. It is the case of live sports events or real premium content. But most of the times, what really finances mass-media is advertisement. And that is very clear in nearly every mass-media.

So, what about the mobile ecosystem as a mass-media? It is certainly a very new environement, and there is still a lot of confusion, but it is starting to be clear that the free model is gaining economic traction. Of course, as in other mass-media, a good option is to mix the two biz models, or mantaining only the pay-to-consume one if you have a really objective premium content.

But, for 99% of contents, behave as a mass-media. We in Okapi Lab are going to do it and shall comment our discoveries. Stay tuned!

28 nov. 2010

Google Android Gingerbread, Google Chrome OS and fragmentation

These last days there has been a lot of buzz about Android vs. Chrome OS, and also about Android fragmentation. Probably that is because both Android Gingerbread and Chrome OS are about to be born. But there is something more. The point is that people are getting nervous since both look like they are not ready for the Christmas campaign: they should have been launched already for that. There is a clear delay on the products.

As well, many people think Android and Chrome OS may compete on some devices: tablets, TVs, cars, etc. Eric Schmidt, Google´s CEO, said recently that Android is for touch devices and Chrome OS is for keyboard devices. What about TV? Google says Chrome OS, but Google TV is Android based. What about tablets or even smartphones with keyboards? Confusion. Even Google executives are not clear on their statements and we have seen contradictions between them.

Beside that, people are worried about Android fragmentation. They say it is a question very difficult to manage when you are a developer, and say situation is going to get worse with Gingerbread and Chrome soon appearances. To properly provide every Android device with an optimized software is hard work, they say, and Rovio is an example with their extra effort to create Angry Birds personalization for low-profile Android handsets.

So, for many people, everything is a mess, and more if compared with iOS simplicity.

On a recent post, we explained Google and Apple are very different. And that Google is happy with many app stores.Here is why. In this post we say fragmentation and (for many people) confusion has exactly the same explanation.

Google´s target is ubiquity. They want to gain the biggest market share on mobile, TV, netbooks, and on every hardware segment, and sell ads for them. And it looks like they are achieving their goals very quickly. So, all the buzz about delays on Gingerbread and Chrome, fragmentation in Android, and confusion between Android and Chrome is something just anecdotal for Google. The important thing is being leaders in every device. Even if they have to compete again themselves.

As well, everybody should understand reality is uncertain by definition. So Google does several bets, not laying all the eggs in the same basket. Time will say. And, no matter whay finally will succeed, it will be Google´s.

What should we do as developers on this scenario? Work. Rovio´s effort to create special editions of Angry Birds is often commented on a negative way (hard to work on Android, etc.), but, if they do, wouldn´t it be because it is worthy? Efforts are positive. There are nearly 5 billion mobiles in the world, and business is in all of them.

We in Okapi Lab will go on working.

21 nov. 2010

We are global!

Interesting this feature.
We have checked where do our Twitter followers come from, and here you have the result.


We have Twitter followers in every continent (apart from the Antarctica).
Thank you all!

20 nov. 2010

AdMob revenues: OK but, what about in-app-purchases on Android?

Yesterday we read this post by Sean Kauppinen with links to some very interesting infos and data about ARPUs for social games. We have looked for info about revenues for developers within the Android market but we have not find many things, apart from isolated data by fellow developers.

Apart from the price of the title, the main revenue source is advertising. And the option for that is (of course) including AdMob. What to expect? Google said recently it is a market 1 billion worth in 2010. But, what about the developers point of view?

In this post, Omar Pera (thank you for sharing) says they are doing with AdMob aprox. 50 dollars per day with three Android games that have been downloaded 200K times and have 100K active users. On a personal meeting with a pal in Madrid, he told us he is achieving aprox. 6-8 dollars a day with a game with 40K downloads. So you may expect that with every 4K downloads, you may reach aprox. one dollar a day, isn´t it right? Well, at least we have a starting point.

Is this enough for developers? We think it is some kind of "minimum", at least. But to really boost the market, other things should be done. It is interesting to highlight the enormous importance of in-app-purchases per revenues. As this report by Flurry states:


In-app-purchases (red) is the real money. But Android only let its fellow developers the blue part. Please Google, implement in-app-purchases for Android ASAP.

11 oct. 2010

Android: not one app store but many. Here's why

Since its launch, Google Android has been compared with iOS, the mobile operating system by Apple. This comparison makes sense, but they are two completely different initiatives. And one of the points where there are more differences is precisely the app stores, something weird to many people: Why Apple has only one app store and everyday there are more for Android?

It is important not to forget that Google is a company that gets 96% of their income through advertising, and Apple is a hardware company that obtains over 90% of their income by selling different devices.

The Apple AppStore is not intended primarily as a tool to generate revenue for Apple, but as a natural extension of the hardware. What worries Apple is controlling the user experience of their customers to ensure their satisfaction and, consequently, to sell more devices so that they complete their "collection". What is important is cross-selling hardware and its continuous updating. In case they get AppStore revenue, it will be just a little extra. It currently represents a percentage in the income similar to what Apple gets from the sale of software or peripherals. See link above.

In Google's case, the important thing is advertising. In this particular economic field it is the leader in web by far. And Android is a bid to extend Google's advertising kingdom towards the mobile domain. That´s why its CEO said recently that his rival is Microsoft´s Bing, not Apple. The company wants to dominate the mobile ecosystem via its OS to dominate advertising.

With this in mind, you now understand Apple may only allow one exclusive shop. But Google not only is not worried about the proliferation of Android app stores by carriers (Verizon, Vodafone, etc.) or retailers (Amazon, GetJar, etc.); Google think it very likely will help to expand Android market share in mobile, which is their true goal. No matter where a person buys their Android applications: what matters is that they have installed the operating system Android.

So we shall see more and more Android app stores. And Google will be happy because they will help them to achieve its target.

2 oct. 2010

Tablets: success via comfort and convergence at home

Tablets are just beginning to be born, but probably this winter we will see a big bang that is not going to come to an end.

Their mainstream context of use is clear: sitting on a sofa, quietly. When you are at home, you want to enjoy your leisure in a relaxed place to forget everything and be comfortable. Hence the triumph of television, which keeps you on the sofa with no problems. To use a computer, even a laptop, you should use an office-type table. It is true that laptops or smartphones can be comfortable on a sofa, but tablets are much more comfortable in this use. And that is the point. Comfort at home. What people need.

The other one is that they involve a certain convergence with main cultural activities. The trend is that devices are accumulating features, as new Swiss Army knives. Evolution has been:
1.- MP3 devices made CDs obsoletes.
2 .- MP3s have been replaced by mobile phones. Why having two devices if you may have just one?
3 .- Handhelds (PSP or DS, basically) are also gradually being replaced by Smartphones. Or they will become phones soon.
4 .- Paper books are being replaced by electronic books.
5 .- News papers are losing readers on a regular basis, while its online versions are growing steadily.
6.- TVs are not anymore a device to be watched with a big family, but alone or in couples.
7.- DVDs, Blue-Rays and even multimedia HD drives are going to disappear: streaming from an Internet service or from your personal home computer will be the winner.

Well, tablets answer to all these trends in an unified way when you are at home. So we think that these new gadgets are big and very important news. If you have one, you do not need to buy the media on paper, have a portable game player, CDs, MP3, books, an electronic book reader or even a TV, DVD or Blue-Ray.

It is true that tablets have been around for over ten years. But till now they were just a "strange computer" and therefore have not worked in sales.

The winning combination: 3G smartphone outdoors, WiFi tablet at home. And a lot of devices, even very new ones, as museum items soon. It is just a question of time.

Let us insist that this is an opinion for people´s choices for personal uses of the Internet. When at work, desktop is the king. It is interesting this new trend already detected: mobile searches peak when people are at home (nights and weekends) while desktop searches do it in the morning mon-fri. See here the report.

22 sept. 2010

Android according to Oracle, PlayStation and Gartner

In recent days we have had some indications that very clearly mark the growing importance of Android:
  • The rumor of the imminent launch of the PlayStation Phone from Sony Ericsson, powered by Android 3 (Gingerbread). This would be a boost to Android as a gaming platform. We should wait because it is not the first time something similar is rumored. The fact is Sony has tried to enter a downloadable model for games, and its PSPgo has not worked very well. Perhaps this second bet would make more sense, providing much more value: in the same device you may find a smartphone and a last generation handheld.
  • More serious is Oracle's lawsuit against Google about Android and its alleged patent infringements of Java. We have to remember that Oracle bought Sun last April, so it now owns Java. Android is based on Java. This case may have many implications and creates uncertainty, which we hope may be resolved quickly. Google probably will have to put some money to dissolve the problem.

20 sept. 2010

Positioning of the company

Our goal as a company is creating games we like, publish them, and have fun. We are not looking to get money out of it, but it would be good to get it!

We have chosen the theme "Smart, weird games." We like it. And we have opted for a three-pronged strategy that responds to this theme:
  • Games free-to-play
  • Android Platform
  • Creation of new genera
We explain these three points below.

Free2Play

It is a strategy increasingly and widely used in the world of videogames at all levels, especially in the online world. It has multiple advantages:
  • No piracy
  • Model tested despite its novelty
  • Growths greater in scope
  • Higher growths in revenue
  • Access to more public share in mature markets
  • Access to more emerging markets (players are not only in the first world).
  • Android has the largest share of free applications of all mobile application stores (57% USA May 2010). This is a natural model in this area.
The revenue model is at least threefold: advertising, selling premium versions and "in-app Purchases" or purchases within the application, when available in Android (hopefully soon).

Android Platform

At first, we chose it internally by its greater ease of development for us, but this decision also becomes a strategic advantage because:
  • Although Google market is much less developed, there are already good turnovers.
  • The growth is still extremely fast. 200 000 new units every day (as of August 2010).
  • All information suggests that this platform will lead the field of mobile operating systems soon, surpassing those of Nokia, RIM, Apple, Palm, Windows, etc.
  • It will soon apply to other devices: tablets, but also TV.
  • In this market there are fewer major developments. Big gaming companies are not yet in. It is easier to bright.
  • Less competition.
  • It is easier to be highlighted on a "minority" platform and then making ports to other platforms more massive than the reverse.
Creation of new genera
  • Do not imitate: Innovate.
  • Generating new niche.
  • Greater chance of success.
  • Leadership.
  • Communication effect.
  • Responds to the reality of the games that we are already developing :-D
We will tell you more.

The very beginning

Okapi Lab. We are a very small company dedicated to making games. First, for Android. We are located in Madrid, Spain. Here we will tell our adventures.