In the golden age of app development way back in 2008, anyone with a knack for coding could develop an app, release it on to Apple's App Store and wait for the cash to roll in. Probably the most famous example was in 2008 when Joel Comm, the developer of iFart Mobile, a crude app that made, yep, fart noises, was earning Comm $10,000 a day.
Out of this new gold rush came companies, who quickly set up production lines to churn out apps to gobble up a slice of what would become a $25 billion pie by 2013. Companies such as King Digital Entertainment, makers of the excessively popular Candy Crush Saga, and Zynga creators of FarmVille stormed onto American stock exchanges and fuelled a boom for a market that seven years ago, didn't exist.
Those days are over. This month, Zynga reported disappointing second quarter results, losing $62.5 million compared with $15.8 million a year ago. King Digital Entertainment had 23 per cent of its share value shaved off in a morning of trading on the New York Stock Exchange last week. This result makes the app maker the second worst performer on the NYSE this year, with a 32 per cent drop since its IPO in March. Indeed, the average earnings of games are down, with mean revenue per application hovering somewhere around the $9,000 mark. The reason? Kim Kardashian.
Her app Kim Kardashian: Hollywood developed by Glu Mobile has become the summer's, and probably the year's surprise hit app. The premise, like all good apps, is incredibly simple: players create a profile and aim to climb the dizzy heights of fame through flirting, working, and partying their way to stardom. The only way they can do that is through in app purchases, which in its first five days of release, earned Kim and Glu $1.73 million. Analysts have been falling over themselves to make predictions on how much the game is likely to earn over the year, with some aiming as high as $200 million. Glu Mobile expects to make more in the last two quarters of this year than it did in the entirety of 2013, thanks to Kardashian. That means money that would normally go to the dominate players in mobile gaming is ebbing away even faster.
"Competition within casual gaming is intense, with Kim Kardashian: Hollywood and 2048 [another addictive game] going after the same demographics," said an analyst from Deutsche Bank.
This is not the first time app developers have tried to harness the power of celebrity to increase sales. But what makes Kardashian so powerful is that her audience already have the qualities desired by app developers. Tech savvy, aspirational, and ultimately, reward driven, Kim's fans are the holy grail for app developers, but makers have struggled to build brand loyalty on app stores with more than a million bits of software to choose from. The reason why Kim succeeds where others have failed is through a) knowing her audience intimately and b) her total control over the way she communicates with her fans.
App developers have to submit their products onto stores powered by Apple, Android and the like, and hope the online press picks them up and a buzz is generated. In Kardashian's case, she has a captive audience that includes 17 million Instagram followers, 22 million on Twitter, and a media industry weaned on the hits an article about the Kardashian garners (just ask the Daily Mail). She can instantly mobilise a legion of loyal fans to rally to her cause. In this case, earning her more money then she's ever had.
But what Kardashian's entry into the app economy represents is a death knell for the companies built to serve this particular world and nothing else. Kardashian's fans, like app players, are notoriously fickle. Mobile games have a limited shelf life, and need to constantly goad its users into coming back. Kardashian knows this, which why the news of the app was quickly followed by her next project, a book of selfies, of herself.
The companies that have lashed themselves to the mast of mobile gaming don't have such luxuries, and a result, can't reinvent themselves with a click of a button or the taking of a selfie. Kardashian's entry into the app economy should be a wake up call to those who still think we're still in the golden age of fart apps.Suggest a correction