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Life and Death in the App Store

Casey Newton has a must-read story on the struggles of Pixite (makers of Pigment, among other apps) and the modern app economy:

For a time, Pixite was a shining example of the businesses made possible by the app economy. Like thousands of other developers, Pixite’s founders took what had been a side project and turned it into a full-fledged career. But the company’s recent financial problems illustrate a series of powerful shifts in the industry toward consolidation and corporatization.

For all but a few developers, the App Store itself now resembles a lottery: for every breakout hit like Candy Crush, hundreds or even thousands of apps languish in obscurity. Certain segments of the app economy remain vibrant — ludicrously profitable, even. Apps for massive social networks, on-demand services like Uber, and subscription businesses like Netflix and Spotify remain in high demand. Then there’s gaming: Last year, 85 percent of all app revenues went to games, according to App Annie. Supercell, the top-grossing developer of Clash of Clans, reported revenue of $1.7 billion in 2014. (It spent $440 million on marketing.)

The folks at Pixite have made some mistakes along the way, but the general shift on the App Store is undeniable.