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We just learned that the leading mobile app makes 60 times more money than Flappy Bird

Published Feb 11th, 2014 12:59PM EST
Flappy Bird Revenue

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This has been an illuminating month for the mobile application business. Based on its daily download volume (as high as 2 million) and simple banner ad format, Flappy Bird has been estimated to make roughly $50,000 a day. Just recently, a hacker revealed that Supercell is making more than $5 million a day from its two mobile apps, Clash of Clans and Hay Day. According to our industry sources in Helsinki, Clash of Clans is roughly twice as profitable as Hay Day, which would mean that the daily global gross revenue from Clash of Clans alone tops $3 million a day.

And that’s the app industry in a nutshell.

Both Flappy Bird and Clash of Clans are free downloads. The download volume of FlappyBird at its peak was roughly 10 times higher than the download volume of Clash of Clans. Yet Clash of Clans manages to make 60 times more revenue.

The sales power of an app has almost nothing to do with its download success; it’s all in how the app manages to monetize. Flappy Bird relied exclusively on crude, ineffective banner ads. Meanwhile, Clash of Clans’ monetization rests on a highly sophisticated, psychologically shrewd in-app purchase system that helps players to speed up gameplay.

Small developers — even one-man shops like Flappy Bird maker Nguyen Ha Dong — can still get apps to the top of download charts by creating a media storm around a new fad. But monetizing effectively on a popular game is a whole different kettle of fish.

That is alchemy that only a handful of major developers have mastered.

After launching mobile game company SpringToys tragically early in 2000, Tero Kuittinen spent eight years doing equity research at firms including Alliance Capital and Opstock. He is currently an analyst and VP of North American sales at mobile diagnostics and expense management Alekstra, and has contributed to, Forbes and Business 2.0 Magazine in addition to BGR.