Fourteen copies.

I sold 14 copies in the first day; 13 in the U.S. and 1 in Mexico.

I’m not surprised. There are a few things working to my disadvantage: first, I’m not an artist or a sales person; I’m a programmer. If I were to make a serious living at this, I’d get a real artist put together the icon art and the game play art so it’s not so, um, amateurish.

(Don’t worry; I intend to continue to support this game, including a redesign of my iPhone landing page which will link to this blog. I also have an offer from my brother for game music, and I know a few artists through whom I can rev the artwork. So don’t take this as an admission of giving up on Invasion Defense.)

But artists, like programmers, cost money. My original goal in putting this game together was to understand the process, not to make money: making money can come when I understand the process. And here are my observations about the process:

To make a successful iPhone game, you need a marketing person, an artist and a good programmer. I’m of course one third of this; with the other two people I think we could make some serious cash.

You cannot rely upon the App Store to market your product. There are so many applications for the iPhone (10,000 at last count) that it is impossible to rely upon your presence in the “what’s new” section. Research shows that the number of people who browse web pages exponentially drop off as you move off the first page, and new applications only show up on the front page for perhaps a few hours at best. (Now if I wanted to make money I would have gotten an artist to do my application icon and my flying saucer and city icons.) But even with the best presentation, you still blend in with the thousands of others.

It strikes me the reliable money for iPhone development will be in the enterprise. If and when Apple gets its act together and puts together an enterprise development strategy to allow enterprises to provision enterprise owned iPhones with custom software, a huge business will spring up for iPhone development consultants to put together enterprise iPhone software. Until that time, however, its unclear how an enterprise can distribute its products.

One suggestion for Apple (for the three people reading this blog): perhaps if you can mark your application as “private” and/or create a password-protected area on the Apple Store, so that in order to install an application you need the private URL, a password, and perhaps a second provisioning certificate, along with guidelines for how to secure your application, then Apple can satisfy enterprise concerns. Within a company’s internal web site a link to the “enterprise” app site on the Apple Store could be given, along with a password so a corporate user can log in and download the application to his iPhone. It won’t stop internal applications from leaking out into the wild–but that happens regardless. But it would allow enterprise applications to be distributed while allowing Apple to have control over the sole application distribution mechanism.

(It’s one reason why I believe the Google Android based phones are currently well positioned to overtake the iPhone in corporate environments: a Java-based phone with an open distribution network allows enterprise businesses to create and distribute custom software easily. The iPhone, on the other hand, does not currently allow custom enterprise apps to be distributed easily. ‘Nuff said.)

And, more importantly: There is no money in free software. Or, more specifically, there are three ways you can make money at anything: sell it, charge for supporting it, or use it as advertising. In my case, I’m using this web site as advertising: if you need a good Java, MacOS, Windows Mobile or iPhone developer, drop me a line. RedHat makes money charging to support RedHat Linux. And Microsoft makes money off of Windows by selling it.

But if you hire a bunch of programmers and artists and put together a really nice bit of software, without any model for how you’re going to make money, and you give away the game–then how are you going to pay back your investors? If there is no ad space in the game, if you don’t charge for supporting the game (and who will pay for game support?), um, how long can you keep it up?

And that’s the thing I don’t understand. Even with the best put together games, I’m surprised we had such a quick rush to $0 on the App Store, apparently on the theory that quality and low prices will translate into quantity and eventual profit.

Charging $10 for a well put together game makes sense to me–$2 for my amateurish attempt seemed right. Remember: feeding three people implies a burn rate for your company of $300,000/year–which means you must push 45,000 units/year at $7 profit, a far cry from my 14. And the economic model of a game company is simple: with few exceptions you write a game, you release a game, and in the first two months of sales you make that money back. If you have a constant churn of about 6 games a year, that means you need a pipeline of games at various stages of development averaging about 2 months per release. And on average, each game needs to sell 7,500 units at $10 each to make your business an on-going concern.

At $0.99 or $1.99 the profit equation changes: suddenly instead of having to sell 7,500 units every two months to feed your three people, you’re having to sell 75,000 units at $0.99 or 38,000 units at $1.99 for each game created. That’s a lot of units to sell–especially since people don’t remember game makers, only the games they make.

And at Free–um, where’s the money coming from? Good will?

(It’s why game companies rely upon franchises: my simple game took me two weeks of part-time effort just to come up with the idea. A franchise allows you to short-circuit the creative process: get an idea and milk it dry. And a franchise allows you to get repeat business: the same idea with variations can make you a lot more money than that one idea, extremely well executed. Just ask the “(insert musical instrument) Hero” franchise.)

The days of two million people and 100 apps on the App Store is now over.