How To Make Money From iPhone Games

Last year, a small Mac game developer called Pangea Software ported one of its titles to Apple’s iPhone. Pangea’s Brian Greenstone didn’t expect to make much from the iPhone version of its arcade-style game Enigmo; he expected that the company might sell 10,000-20,000 units over its lifetime. It sold that amount in a single day, and from July 2008 to January 2009, it sold a total of 810,000 copies, earning a profit of $1.5 million, even after Apple took its 30 percent cut.

Numbers like that help explain the burst of iPhone game/entertainment news here at SXSW 2009, from location-aware fun apps to the Facebook Connect function linking iPhone apps to the social network. But there are also challenges. Those were analyzed at a Saturday SXSW panel featuring Greenstone and three other successful iPhone developers; here are my five favorite takeaways.

Think Handheld Game Console, Not Mobile Platform

Moderator Raven Zachary laid out the playing field: On the market, there are now 17.4 million iPhones and an estimated 9 million iPods (which also run the iPhone OS.) There are 27,000 iPhone apps that have been downloaded a half-billion times; 1 in 3 are games or entertainment apps. While it’s not the most popular phone on the market, it’s easily the most Net-centric, accounting for nearly 70 percent of all mobile-based web usage.

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