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Foundation42 cancels Appaloosa, cites "low acceptance" of Windows Phone 7

Developers can have a tough life. They slave over compilers, writing code, trying to come up with that perfect app or game that becomes the next Angry Birds. The rewards can be big but more often than not, most apps never reach that level (e.g. no one thinks that out of 300,000 apps, more than a few thousand are making money in Apple's App Store).

Foundation 42, who make Word Monger, Word Explorer Dictionary and Data Locker for Windows Phone 7, had announced months ago 'Appaloosa' an ambitious game for the new platform. Flash forward a few months and the studio had to cancel the project. Reason? Ultimately it came dow to cost vs. expected return.

It's the same old story: new platform struggles to gain audience, developers struggle too. After the break, you can read Foundation42's side of the story of what happened. From our perspective, we saw their move to heavily invest in a game on such a new platform gutsy if not quite a bit risky. We would have rather seen them try 'Appaloosa' in late 2011 when the platofrm will presumably have more traction and they could recoup their costs, but we think this may have been too early to invest so much.

So check out their side after the break and even see a video clip of what could have been, with an alpha demo of 'Appaloosa'. Thanks, Derek Jenson, for letting us hear your thoughts.

Our team has 3 fulltime people (artist, game-play programmer, & game-engine engineer) and one part-time person (audio). Our team is bare-bones; we all bring senior development experience to the team. Appaloosa was in development for 3 months before we canceled it; first 7 weeks was prototyping, then the project moved into production. A 9 month development window was needed go gold. But around the 7th of January, we had to cancel Appaloosa based on the lack of numbers for WP7 and its very slow acceptance into the mobile market. We were very sad to end the project, as it is always hard to walk away from so much invested time and creative energy.

In it's current state, I would doubt anyone is making money on WP7; or has even recouped their investment. Even the break-even point for hours put into non-original ports (say NFS) is questionable. I don't have hard number data, but if you look at the situation with ballpark numbers and do some basic math... it's grim.

Only accounting for 3 fulltime devs, our project had a 9 month dev cycle. That is 27 man months that needs to be paid. That's a tight budget, very tight.

Lets look at the iPhone to extrapolate ballpark numbers. iPhone has a 65 million-ish user base. The best selling apps are games, and the best selling game is Angry Birds with 6.5 million-ish in sales. That is a 1 in 10 sales to user ratio. And this is life time sales numbers. I would call this the best case scenario; a walk-off home run.

Let's project those number back onto the WP7, and try to get the 3 fulltime developers on the Appaloosa team paid.

With 1 million WP7 users (a guess based on press), a WP7 walk-off home run title could bring in 100,000 in sales. Our game was going to be priced at 2 bucks. That would bring in $200,000. MFST gets 30% for hosting in the App Marketplace, which leaves $140,000. Divided by 3 devs, is a payout of $46,000 bucks.

Even in this very gross simplification which didn't account for any costs, excluded the audio person, ignored risk, assumed an instant 100,000 sold units and instant payment, ignored marketing, etc., the reward for working your ass off for 9 months and matching the success of the best selling game ever to grace a mobile platform would be 46 grand. A laughable number.

The WP7 product is competitive. But they are counting on Apps to make their offering into the mobile market more appealing. And I don't see a balanced equation for developers now, or in the near future. We would have loved to bring Appaloosa into the App Marketplace, we just didn't see a viable way to do so.

Daniel Rubino is the Executive Editor of Windows Central, head reviewer, podcast co-host, and analyst. He has been covering Microsoft here since 2007, back when this site was called WMExperts (and later Windows Phone Central). His interests include Windows, Microsoft Surface, laptops, next-gen computing, and arguing with people on the internet.

6 Comments
  • I don't quite understand this. If they were developing this game using XNA wouldn't the game have been open to the 30 million users on Xbox Live as well as the 1+ million wp7 user base.
  • That was my first thought as well. Well, actually, my second thought.The first was, "who is Foundation42?" Also, if you're a small development company, why would you invest so heavily in a platform which is unproven and frankly very restricted? The first generation of software on a new platform are typically first party releases, third party ports, and releases from smaller/garage developers. Nothing ambitious.A very quick web search produced nothing of substance regarding Appaloosa. There's an interview on Edge where they mentioned developing on Xbox360 first, which generally seems to make more sense. I'd peruse their site, but it's hosted on Tumblr and currently down at the moment. :/
  • Hate to pile on Foundation42, but they should have contacted MobilePaddy and Rico for business analyst. Even most the pro-WP7 crowd realizes that people are locked in two-year contracts. Just to get the TP2, Tilt2 and HD7 users off WM6.5 is what, this year? I wish Foundation42 the best, but they didn't think that through very well.
  • All I know for certain is daily Facebook usage has been on a steady, albeit linear, increase since the U.S. launch. I don't know Facebook attachment rates, so I only use it for a minimum. By my calculation they still had 6 months of development left. This means that even at a linear growth rate the user base would be at least 3 times what it is now or about 3 million (based on the 1 million estimate they gave). I still think that number might be too small to risk, but to hit the same numbers they would 'only' have to get 3% of the market instead of 10%.Interestingly this analysis could have been done before work was ever started. It took the iPhone 1 about 74 days to get to 1,000,000 sales. That is about 13,513 phones / day. Assuming a linear growth rate, after 9 months this would put them at about 3.6 million. That's a little over what their analysis would be today (~3 million) if they extrapolated it. I'm not faulting them for dropping it. The reality for developers is that the marketplace is growing but very small. However, if they were expecting iPhone 4 adoption numbers from a Microsoft product that is essentially v1, their analysis was broken from the start.
  • @Rico: I'm having difficulty with the notion that Foundation42 had "invested heavily" in WP7. I guess a 3+1 software development team is considered a heavy investment for mobile software these days...It's possible that the price point of $2.00 per copy needs to be rethought. Although I haven't done a market analysis, and it does appear that many WP7 software titles are either "free" or less than $1.99, maybe software developers should consider increasing the price of applications to a level that sustains development. I would certainly pay more than $2.00 for a title that I really wanted -- especially one that has real value and isn't derivative of other software out there.Users should pay for quality and the market (not a timid developer) should decide something is overpriced.
  • I'd like to see some hard data on app price point vs. sales/popularity. My feeling is that although you or I might be willing to pay more for a quality app, mainstream success is going to be found below the $2 price point. A great majority of popular apps on iPhone or Android seem to be below that price. I don't think Foundation42 was just being timid with that price; I think they were trying to reach critical mass, and I'd have to agree with them.Personally I think apps on WP7 are generally too expensive. I've paid $5 for Bejeweled and a couple other games, but it didn't feel great when I know that competing app stores have those apps priced lower. And for anything that I'm not familiar with (say, a game from an indie dev), I'm certainly not going to shell out more than $2 unless it's proved itself by selling me on the demo or having good reviews/word-of-mouth. I don't think I'm unlike most people in that sense, meaning guaranteed/quick success is pretty iffy above the $2 impulse.It's sad to this cancelled all the same. I really wish MS would have dropped Windows from the OS branding or at least had killer marketing. Telling people to get away from their brand new phones? Even if that is the message you want to be sending to potential buyers (not to use the product), it's pretty lame and unexciting. I sell cell phones, and selling WP7 is the hardest thing in the world when Apple has sold the customer before they walk in the door and Android is around every other corner. And I'm a fan of WP7! Imagine all the other salesmen who aren't. It's unfortunate but unsurprising that WP7 is not taking off that quickly, and it's extremely disappointing. Kick it up a notch MS so your devs and customers don't have to suffer with you, please.