The incredible business of applications – Capital.fr

Confectionery has never been so profitable! Last March, they brought in $1.5 million in net profit per day for King Digital Entertainment, the publisher of Candy Crush Saga. All in all, this famous mobile game, whose principle is to make combinations of candies on a grid, brought in $1.88 billion in 2013 thanks to its 144 million daily players worldwide. Even in the very young market of mobile applications, which was initiated by the launch of the iPhone in 2007 and especially the App Store in 2008, this success is of course unique. But the sector is used to records. Thus, Facebook now generates 53% of its revenue on its mobile version. What justifies the giant’s acquisitions in this area. In February, the company had spent 14 billion euros to acquire WhatsApp, a famous instant messaging app. Market growth should also continue, driven on the one hand by the increase in the number of smartphone devices and on the other by the extension of the time devoted to applications.

According to the company Flurry, 86% of the time Americans spend on their phone is on applications, or nearly three hours a day. Not bad for small programs that are often more of a gadget than anything else, like the apps that turn your phone into a Star Wars-style flashlight or lightsaber. It’s true that some, more clever ones, have turned our laptops into veritable Swiss Army knives. Like Foursquare, which based on geolocation allows its 40 million users to exchange tips in real time about the places they visit, or Shazam, which recognizes music played on the radio or in a bar with formidable precision. Six years after its launch, 420 million people use it today worldwide.

Also in France, these small programs appeal to most smartphone owners. They are even 25% to use more than a dozen every week, according to a study by CCM Benchmark and NPA Conseil, and a third of them have already paid to download some. The European Commission also expects the sector to contribute 63 billion euros to the economy of the old continent in 2018, compared to 17.5 billion currently. Such figures inevitably arouse gluttony. “People believe in the goose that lays the golden egg, but there are few elected officials who really make a lot of money,” warns Grégoire Mercier, founder of game publisher Mob In Life. According to Gartner, “through 2018, less than 0.01% of consumer mobile apps will be considered a financial success.” Even Candy Crush’s triumph didn’t stop its publisher from going wild as soon as it was published on March 26. The British company, which had estimated its valuation at $7.1 billion, lost almost 1 billion in capitalization in one day, a testament to the market’s skepticism about its ability to renew its genius with other apps. “After all, mobile is becoming the heart of communication and all the major players are interested in it,” emphasizes Louis-Marie Guillaume, president of Airweb, a mobile consultancy.

As a result, it is becoming harder and harder for small independent publishers to find a place in the sun in the Apple and Google stores. On the shelves, the two stores each have more than 1 million references. Not easy to stand out! In 2011, analyst Distimo estimated that 80% of paid applications had been purchased less than a hundred times. The risk of developing a program that few smartphone owners will have discovered exists is real. And the worst thing is that even if an application is massively downloaded, it is not said to bring money to its creator. Because “if you have less than 100,000 daily active users, it’s not worth wasting your time with advertising, you won’t interest advertisers,” explains Ouriel Ohayon, CEO of Appsfire, a management company. mobile advertising.

This is the experience of Romuald Jay, designer of the Secret Sleep application, which indicates what the way you sleep says about your personality. His little program, developed in a few hours in his spare time, was downloaded more than 200,000 times in 2011 and was for several weeks at the top of the free apps in the French App Store. A real jackpot? Not really: it only brought him a few dozen dollars. On the one hand, because the program was free, but also because the software used to develop it did not allow the insertion of advertising banners. “It just generated a few downloads of the paid version of another app I linked. Even with advertising, you’re only making a few cents per click. And since it’s already $99 a year to have a publisher account on the App Store , then luckily I have a real job somewhere else”, philosophizes this journalist.

The only solution that seems to be necessary to make an app profitable, the freemium model. It is free to download and use, but every effort is made to allow the user to make purchases afterwards. In a game, it can be, for example, extra lives, specific weapons or the possibility to personalize your avatar. “For this to work, the game needs to have a long life, that we lose a minimum number of players between each level, but that we generate enough frustration to bring it back,” explains Grégoire Mercier. Developing such programs requires resources, many expect a professionalization of this sector. “It’s a very competitive market, and the gap between good and very good games continues to widen,” summarizes Peter Parmenter, director of telecom partnerships at Electronic Arts. It now requires real know-how to come forward. “There is a double tendency to simplify the use of applications and make their interaction with information systems more complex”, emphasizes Nicolas Portaix, technical director at Airweb. It is clear that the apparent simplicity of successful programs often hides a complex computer structure. “They are often only the tip of the iceberg,” confirms Romain Goyet, founder of Applidium.

Developing an app involves the use of various subjects, which are not always easy to gather for the smallest players in the sector, and even less so for amateurs who have decided to try their luck. Finally, since there is little interest for the user to download more weather or calendar software, it is also better to be the first to gain favor in a given niche. After all, there are still many opportunities to find a place in this now crowded market, especially in terms of developing programs on behalf of companies, whether for the general public or for internal use. “From 20 to 30% of large companies are not yet equipped, not to mention SMEs,” said Renaud Ménérat, president of UserADgents, a mobile marketing consultancy. Applications for internal use are thus becoming more and more widespread. Inventory management for sellers, access to customer account information for sellers in the store or even crisis resolution assistance for the business committee, the functionalities are multiple.

Apps are therefore well on their way to becoming the new gateway to the internet and its services from mobiles and tablets. This is shown in the study published last January by AT Internet, a specialist in audience measurement: while website traffic decreased by 33.7% on average in 2013, almost two-thirds of applications saw their increase in December. To become the new Candy Crush, you just need the right idea.

Step by step, creating an app

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Marion Perrier

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