It’s been a good year for David and Ian Marsh, the twin brothers behind independent developer NimbleBit. The pair launched the free-to-play game Tiny Tower, which went on to become their biggest iOS hit yet. And then, to cap it off, Apple selected Tiny Tower as its iPhone game of 2011.

This would be an enviable accomplishment for any developer. But it’s even more of one considering that NimbleBit is entirely bootstrapped. The brothers built grew the company from their combined expertise in game and web development without using any external funding for equipment, office space or extra employees.

David and Ian Marsh. Picture courtesy of NimbleBit.

Inside Network: Your story really seems to mirror the rise of free-to-play games in general. You’d already released several games before shifting to free-to-play with Pocket Frogs and Tiny Tower. How are you feeling about the performance of those games? 

David Marsh: We were one of the first studios to experiment with making our games free on the App Store. Even back before services like Free App A Day existed, we would frequently drop our paid games to free for a day or two to get publicity and a ton of downloads.  Many developers wondered why we would sacrifice a day’s revenue, but it was a small price to pay when we were able to cross-promote every new game to millions of players, instead of thousands.

Pocket Frogs’ success took us by surprise. But the reception for Tiny Tower totally blew us away. While Pocket Frogs hinted at the possibility of a responsibly balanced freemium game’s ability to be profitable and loved by players, Tiny Tower proved it beyond a shadow of a doubt.  It is very rewarding to see games designed to be a fun and free experience first and foremost compete against games designed by large teams that put a focus on metrics and heavy-handed monetization.

IN: In a previous interview you did right after Tiny Tower launched, you said it was making 50 times the amount that your paid apps had. How is it doing six months on in terms of downloads, monthly active users and daily active users?

DM: Tiny Tower’s revenue has had some peaks and valleys since it launched but it has consistently stayed many times above what any of our previous paid games were able to achieve.  Since launch the game has been downloaded over 7 million times and will probably exceed 8 million by the end of the year thanks to being chosen as Apple’s iPhone Game of the Year.  Soon after launch, Tiny Tower peaked at nearly a million daily active users and has currently settled at just over 600,000 and rising.

IN: How do you feel about the movement towards free-to-play? You used to have paid apps but now they’re all free.

DM: I think the days of asking players to pay up front for digitally distributed games are waning.  If a game isn’t free, then it is going to be compete against an ever-growing mountain of free alternatives (including pirated versions of the game itself).

If you make a product that people truly enjoy, then you can afford (and can profit more) by letting the players themselves decide how much the experience is worth. In addition, the increasing number of freemium games in different genres is proving that the business model isn’t limited to casual farming games. The other big advantage of the model has is that your revenue isn’t tied directly to your chart position. Even long after your game has disappeared off the charts, happy players can still decide to invest more in the game.

IN: You’d previously revealed that 2.6 percent of Tiny Tower’s players are paying customers. Have you seen that number increase as the free-to-play model gains more acceptance? Have you seen average revenue per user change?

DM: Running the numbers now is looks like roughly five percent of Tiny Tower players are paying, with an average of around $10 per paying player. Not quite sure how our ARPU or average revenue per user (gotta love those acronyms!) has changed over time, since it isn’t something we actively track.

IN: Last year Ian Marsh revealed that the your most profitable in-app purchase in Pocket Frogs was the $29.99 option, even though only eight percent of customers bought it. Are you seeing a similar story for Tiny Tower?

DM: We’re seeing the following breakdown of IAPs in Tiny Tower:

• Purchases: $0.99 (43%), $4.99 (52%), $29.99 (4%)
• Revenue: $0.99 (10%), $4.99 (60%), $29.99 (30%)

It seems like there might be a lower relative number of “big spenders” in Tiny Tower, perhaps because of its wider appeal and higher number of low paying players.

IN: You’ve managed to create two very popular games with very different mechanics and themes. That’s not easy – why do you think your games have been successful?

DM: I think it is the result of designing fun experiences, before even considering how they will be monetized.

We tend to fret a lot more over putting character and cool stuff into our games over manipulating how the game works in order to maximize certain metrics. As developers, we get more excited about putting cool stuff into the game than endlessly changing the experience to maximize revenue because we spend a lot of time playing the games.

I think that is one of the main advantages we have over companies that are answering to shareholders or trying to get acquired. All of our in-house testing and later, group beta testing is all done without in-app purchases implemented into the game. That is how we try to make the “pay” part of the game feel as optional as possible, and I think our players notice that.

IN: You’ve also just crossed over to Android as part of the Mobage Network. How are you feeling about Android so far? Have you noticed any difference between Android and iOS in terms of free-to-play user behavior?

DM: A studio of our size wouldn’t have even been able to consider Android development ourselves, so we have to rely on working with a partner.  While the games have only been available for a few months, it looks like achieving the same kind of success on Android is going to be an uphill battle.  All other things equal, I think revenue per user is pretty similar between Android and iOS users.  The hard part is creating an experience that is as consistent across all the devices and flavors of Android as it is on iOS.

IN: So what’s next for NimbleBit?

DM: We have been spending a lot of time supporting and updating Tiny Tower, but as of the last month we have moved into full production on our next game which is going to be new intellectual property.