Tapjoy says Apple’s ban on pay-per-install hurts game developers (Appolicious)

This might not be a shocker to anyone, but Tapjoy is reporting that Apple’s choice to ban pay-per-install incentives in the iTunes App Store has seriously hurt game developers’ bottom lines.

The ban basically knocked out Tapjoy’s advertising program among app and game developers in the App Store. The system worked by using Tapjoy’s network to increase the popularity of games in the App Store: developers pay Tapjoy to have their apps featured in other games, and players of those games are awarded in-game currency for downloading the featured apps. Tapjoy cuts the game developers in for allowing other games to be advertised in their apps.

Apple (AAPL) recently laid a ban down on this system, however, apparently out of concerns that download incentives like the ones Tapjoy was offering were artificially pushing apps into the Top 25 rankings in the App Store because players were downloading those apps in order to earn bonuses in other games. And according to a story from VentureBeat, Tapjoy is reporting that this ban has had some major effects on the earnings of game developers in the App Store who were depending on advertising revenue from systems like Tapjoy’s in order to create a more stable financial platform. One developer, Glu, pulled down $2.9 million from incentivized downloads in the last quarter before the ban, according to a story from Pocket Gamer.

Here’s a quote from the VentureBeat story:

“Mihir Shah, chief executive of Tapjoy, met with Apple to try to convince the company to allow a limited amount of pay-per-install promotions, with a cap that prevented developers from buying their way into the top 25. But Apple disallowed even that kind of compromise, according to Tapjoy.”

Tapjoy says it surveyed 496 iOS developers that have used its services and found that users aren’t happy about losing the ability to grab in-game currency incentives for downloading other apps – about half of the developers surveyed said they’d received complaints. Tapjoy also says that by a ratio of 15-to-1, developers reported a decline of revenue after the ban, and that two-thirds of the developers surveyed said incentivized downloads were responsible for at least 20 percent of their revenues. A large number of developers also saw their game usage decrease after the ban, the survey found.

Apple isn’t really talking about the ban, but VentureBeat and Tapjoy speculate that developers might find themselves wandering over to Google’s (GOOG) Android platform to sell their games, since there are no such incentivized download restrictions there.

Yahoo! News

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More developers being sued over app tech patents (Appolicious)

The mobile app space is getting more volatile, thanks to yet another round of patent lawsuits from another technology company that’s going after app developers.

This latest batch comes from a U.S.-based company called MacroSolve, according to the U.K. paper The Guardian, which has already issued lawsuits to 10 mobile app developers. The company claims the developers are infringing on its patent for a “system and method for data management,” which “covers the collection and transmission of data for questionnaires and puts them online.”

MacroSolve’s CEO claims the patent covers “thousands of existing apps,” which gather data and return it a server over the Internet. The company isn’t going after Apple (AAPL) (or Google (GOOG), or Microsoft (MSFT), which also have smartphone operating systems that developers create apps for), though – it’s instead focusing on smaller app developers, who might struggle to defend themselves against patent infringement lawsuits.

About a dozen other developers have received patent lawsuits from another company, Lodsys. That company has a patent claim on apps that use in-app purchases to sell content, and like MacroSolve, Lodsys is focusing on smaller developers and asking them for a cut of their profits, rather than stepping up against the big players like Apple and Google. Both those companies already have licenses for Lodsys’ technology, but those licenses don’t get passed down to other developers, Lodsys claims.

Apple has reportedly started looking into Lodsys’ claims, although there hasn’t been any motion from the company on the issues. Developers and analysts fear that the mobile space is starting to attract “patent trolls,” companies that can make patent disputes and tie up small developers in court in battles they’ll struggle with and won’t have the resources to fight. Lodsys has requested 0.575 percent of revenue from apps that use its in-app purchasing technology (it’s not clear yet what MacroSolve wants), but if more and more companies start to take a bite out of developers’ profits or tie them up in court, it could have serious consequences for the mobile app space in general.

In the meantime, it seems that developers are in a holding pattern, unsure of how to proceed. They can’t do much without involving Apple, and Apple is taking its time to figure out where it stands on the issues involved. How these patent disputes shake out and whether they draw more like them, however, is sure to be a major event for the evolution of app development in the future. It could also have a serious effect on what companies can afford to make apps, and what those apps are capable of doing.

Yahoo! News

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