Developer Loses Thousands To App Store Piracy

In May of 2008, Imaginuity New Media began developing their debut iPhone app Rocky Artue, a game the company hoped would be among the first to propagate into the iTunes App Store. On July 13, iPhone 3G and the iTunes App Store launched to the public in grand fashion, but Rocky Artue was not part of Apple's big coming out party.

After nine long months and an outlay of over $25,000 dollars, Imaginuity New Media, finally launched Rocky Artue into the App Store. Two days later with only 100 paid downloads to speak of, Rocky Artue was cracked and posted as a bootlegged game creating a free-for-all for those with jailbroken iPhones. In fact, 2,075 pirated copies of Rocky Artue have been downloaded since its debut on February 6th. Compared to only 200 paid downloads of late which has cost Imaginuity over $6,200 in gross revenue. With Apple's loss amounting to just over $1,800 dollars of that total.

What's shocking is that the $2.99 app was cracked only two days after it hit the App store according to Pinch Media, a company that provides real time web analytics for iPhone SDK applications. Pinch Media's co-founder and lead developer Jesse Rohland, called the Rocky Artue bootlegging, one of the largest cases of piracy he's seen, as stated in an email to Allan Restrepo, President & Founder of Imaginuity New Media.

"Unfortunately I have bad news for you that you might not want to hear. We typically see these large discrepancies between our numbers and Apple's for paid applications that have been pirated," Jesse Rohland wrote in an email, "I did a quick search for cracked versions of your application in the wild, and like most, it's definitely available for people to steal. Your case is actually one of the largest cases of piracy we've seen where typically we see paid applications receiving around 5x more users from piracy then from legitimate downloads."

I spoke with Allan Restrepo, who by now is convinced that the pirating underground is running rampant below the surface of Apple's wildly successful App Store model. A viral black market that few mainstream iPhone users are aware of. Restrepo is not convinced that enough is being done to protect developers from bootleggers.

"I don't think that anyone is aware of the piracy that exits inside the Apple environment," Restrepo told iPhone Savior, "Maybe Apple will tighten up their DRM to make it a little more difficult for hackers to get through."

Checking the App Store today, Rocky Artue has only received a small number of reviews, holding onto a 3.5 star rating. Most of the reviews are very positive, but the greatest endorsement for Imaginuity is that their first iPhone game has been deemed worthy of pirating. Making Rocky Artue an underground hit. At least 2,007 ass clowns with jailbroken iPhones think so, and that's only after six days.

"In some ways I'm flattered," said Restrepo about his app being cracked so quickly, "But on the other hand I'm sickened by all of this. We put our hearts and souls into this game and within 48 hours it had been stolen from us by 1,000 unique users. It's just a real disappointment."

John Gruber, author of Daring Fireball recently featured an interesting article outlining the idea that iPhone developers may start fighting back by beginning to implement their own anti-bootlegging measures. Gruber was concise in assessing the benefits and pitfalls of Apple's current protection scheme for App Store applications.

"The problem is that the current protection scheme is universal and uniform — every licensed app from the App Store is FairPlay-protected in the same way," Gruber wrote, "So when bootleggers found a way to crack one App Store app, they found a way to crack every App Store app. iPhone apps are easier to bootleg systematically than Mac apps because every single iPhone app is protected the same way."

Imaginuity New Media is all too aware of the painful reality of App Store bootlegging. The question still remains, what can developers do about it? The recent release of Crackulous, an automated app-pirating tool created with evil intentions so jailbroken iPhone users can steal paid apps, only serves to empower the unscrupulous minority. Especially since the release of Crackulous was given such tremendous exposure on popular tech blogs worldwide. 

For now, having a paid game morph into an overnight success may be the only real defense for iPhone developers. Though the odds of that happening are becoming slimmer by the moment with the App Store surging to over 20,000 titles in just seven months. I would expect the number of titles to double by July. I would also expect that those interested in pirating iPhone apps will be growing in number as well. Apple's battle to protect their stake in third party iPhone apps has only just begun. In the immortal words of Axel Rose, "Welcome to the jungle."

Imaginuity New Media, Inc. is a division of Imaginuity Interactive, Inc.

Comments

[Pebbles83]

CORRECTION TO FIRST COMMENT. IT IS WITHOUT ADVERTISEMENTS FOR THE "PLUSHED" GAME. ADS ARE WRONG IF IT IS A PAID GAME. REGARDLESS OF THE REASONS FOR PLACING THEM WITHIN AN APP.

[Pebbles83]

oh, and the cracked Plushed that I downloaded was purchased by UNKNOWN and CRACKED within 10 hours, assuming it was released at MIDNIGHT (MY TIME in B.C.) and checking on it on Appulous at 3:30 AM it was in progress, view of the app but not downloadable yet, and by 10 AM, DONE, AVAILABLE.

I wonder how many copies were sold?

I sincerly hope people realize the cost involved to create and mold a good app, and that some people (like this one guy who posted his story) spent $100??, and worked for months, then thinking at about $ 1.99 per download, he was gonna be rich very quickly (after he recouped his investment)..... he said something like 5 the first day, 2 the second, and 3 the third....... then it STOPPED.

NO MORE SALES.

Probably cracked on day 2. Posted on day 2 and the word spead, and by day 3 well... i dunno, most apps are cracked in seconds, and posted within hours of release.

He said he felt disappointed. so he may never create another app, and that's too bad, cuz if all the programmer stopped doing their part, we would not have any apps to crack, so I think if you download cracked apps... GOOD... BUT REMEMBER TO BUY THE APP AFTERWARDS even if you only liked it a tiny bit (wait until it goes on sale for $ 0.99) ... and IT IS FINALLY WITHIN YOUR BUDGET/or what you BELIEVE IT SHOULD BE WORTH.

BUY APPS AFTER YOU TRY IT! DON'T JUST STEAL APPS.

[Online Bootleg Movie Downloads]

That's really good information.Given the wealth of apps available from the App Store, I have already decided that I will never jailbreak my iPod touch - it just isn't worth it.

[Jim Glidewell]

I think that placing any blame on piracy for the "failure" of this particular game is foolish.

First off, 2000 pirated copies, even if they all were magically converted to sales, would not be enough to make this a success by most folk's measure. And we can certainly be confident that most of these "pirates" would not buy the game at full price - most would probably not bother with it if it cost them a nickel.

Focusing on the pirates is foolish, as the real question is why haven't *I* bought (or at least considered) buying this game. And the reason is simple - I've never heard of it.

My family has four iPod touches in the household. I read the www.toucharcade.com website frequently. I've spent at least $300 at the App Store, more than half of it on games and entertainment apps. And I use AppSniper on my touch to see what is new and on sale. In other words, I am there for the pickin'.

And I've never heard of this game.

*That* is a recipe for failure.

Given the wealth of apps available from the App Store, I have already decided that I will never jailbreak my iPod touch - it just isn't worth it. BUT - I have also decided that I will noisily boycott any vendor who places additional copy-protections beyond the standard Apple Fair-Play. I really don't want to deal with that sort of flakiness for an app that I have properly paid for.

So app developers have a choice - they can try and fight dirty (by including various protection hacks) against pirates who would never by their app anyway, or they can sell me (and the millions of other folks who have no interest in hacks of any kind on their iPhone/iPod touch) their app.

And for the record, whining about piracy does nothing to motivate me to look at your app, either...

[Roy Smith]

The developer chose the wrong business model by just charging for the app. It worked for Super Monkey Ball because it was the first game and they sold a crapload of them.

The correct business model for the "Jungle" that is the iPhone App world is the "free trial" app that lets anyone with mild interest download and try the game for free, then upgrade to more levels, etc. if they like the game.

[AN]

Most piracy = Not a lost sale.
5% of piracy can be reclaimed as a sale if a friendly blurb is introduced in front of the user.
Therefore 95% of piracy = never would be a sale.

Other statistics:
0% = Games I have got for my iPhone through App store that were compelling and I wanted to play for more than 1 or 2 weeks.
48% = Applications I have got for my iPhone through App store that were compelling and I wanted to use them more than 1 or 2 weeks.

Most App store products are a quick and dirty product with minimal depth or features going for a quick buck. The "casual" market.

Tracking PhoneIDs and creating and sharing blocklists is shooting yourself in the foot as a developer as mobile phones do not stay in the hands of an owner for very long. They end up on eBay and sold into new owners. These new owners who are most likely an honest person who goes and buys Applications and Games from App store only to find they are blocked from running it become "very angry" in "a very short amount of time" and "tell all their friends". Congratulations you have created a bad publicity problem for your company and for your App store product and indirectly to other products you sell through App store.

The key is a quick and simple reminder to recapture the 5% lost sales and understand the 95% would never convert to sales. Also understand you code in high level languages like Objective-C and pirates program in Assembly. Who do you think will win the battle to get around any additional protection code you program in to your App?

It only buys you additional time but you have invested hard money into purchasing or developing your own additional protection code and it will be broken by the pirate in the end. You are back to square one.

[KenC]

Has anyone tried to calculate the number of jailbroken iPhones in the US? I am very disappointed in the jailbreak community. Piracy sucks.

[Doug Petrosky]

Name an application that has not been pirated. The system in place is completely reasonable. I'd love to know the actual stats but I'd bet that the percentage of hacked iPhones/iPod Touches is a number that is rapidly approaching ZERO! It would surprise me if even 5% were jail broken and I'd bet that number is shrinking daily.

So, of the 95% of people (combined I think there are 30-40Million) 200 determined that the App was worth $3. Using those same percentages they have thus far lost out on 10 sales give or take. If I were them I'd consider building some buzz around the game (which is probably what this article is really about) or see if a price reduction will get it more traction. The truth may simply that the game is not that interesting to most people.

Time will tell

[Adam]

I would agree. Many of the people that downloaded for free are not individuals that would have paid, but some are. The point is that Apple needs to do something to protect its developers. Without the developers the App Store/iTunes wouldnt be where it is at this point. And to have a policy in place that ends up costing a developer even $1 is to much. This is only going to get worse and worse as more and more games/applications are developed.

[Homer]

Wow, all that trouble to save $2.99. Some people are pretty cheap.

[EvanK]

Great input James. Spoken like a true pirate. Arhhh!

[James Bailey]

Sorry but just because people downloaded the pirated version that doesn't translate to a lost sale. That is the same fallacy that the RIAA and MPAA want you to believe. Some of those pirated versions are lost sales but certainly not all of them nor probably even most of them.