Rego 2.0, currently under development at Makalu, is going to represent a complete re-thinking of our popular locations app, and we couldn’t be more excited about how it’s turning out. But that’s the topic of a future article; this one’s about some hard decisions we’re grappling with.
In conceiving Rego 2.0, and based on our experience with version 1, we took two tough decisions:
- No more IAP. Rego 1 is a free download, with an in-app purchase (IAP) of $4.99 to unlock the app. With Rego 2.0, we want to move away from the IAP model, making Rego for-pay up-front. The IAP complicated the app's development and maintenance, and we believe ultimately led to less earned revenue than if the app had been pay-up-front (which certainly could be due, in part, to our own shortcomings in promoting the IAP.)
- No localizations. Rego 1 is localized into several languages and we regret having done that, as it makes updating the app painfully slow and costly. We do not plan to localize Rego 2.0.
- iOS 7-only. Rego 2.0 will require iOS 7. One of the biggest benefits of this decision, is that we should be able to offer reliable iCloud sync.
Update vs new app
Given these decisions, a dilemma we’re facing is whether to make Rego 2.0 an update to Rego 1, or whether to release it as a new app.
There’s no perfect answer to this question, but here are some considerations going into the decision making process:
- If we move away from IAP to a pay-up-front model and release it as an update to Rego 1, then all the people who previously downloaded the app, but didn't pay for it—about 90% of our downloads—would, after upgrading, find themselves with the full version, for free. That could be a good thing, for us, in terms of having a large user base exposed to future in-app revenue ideas we might come up with, but it would probably feel unfair to those who purchased version 1 of Rego.
- If we release Rego 2.0 as a new app, we're surely going to get pushback (as we've recently seen in the case of Clear) from those who have purchased Rego, and expected future upgrades to be free. (And that pushback would likely be correlated with purchase recency.) On the other hand, Rego 2.0 is going to be a very different app than version 1 of Rego. iCloud sync, for example, only scratches the surface of what's coming in Rego 2.0.
- If Rego 2.0 is iOS 7-only and we release it as an update to version 1, then we're going to get some pushback from existing users who can't upgrade.
- If we don't localize Rego 2.0 and we release it as an update to Rego 1, then we're surely going to have some angry foreign-language users on our hands, who wake up one day to find an app they rely on suddenly displayed in English. (That'd probably be particularly difficult for our Chinese users.)
That last point—that Rego 2.0 won’t be localized—is probably the show-stopper to releasing it as an update. So more than likely, Rego 2.0 will be a new app, and we’ll have to prepare ourselves to deal with the unfortunate growing expectation that all app updates should be free (in addition to having cost nearly nothing in the first place).
Download and conversion data by country
As additional input to the decision-making process, I collected some data about Rego downloads and purchases, on a country-by-country basis. The results, displayed in the chart below, are potentially interesting to other app makers.
Table: Rego downloads, purchases and conversion rate by country, normalized to the United States.
- The United States is the single-biggest downloader and purchaser. No surprise there.
- The bulk of our revenue comes from English-speaking countries, with the exception of Germany, where (from my personal observations) most people understand English. So the decision to skip localization in Rego 2.0 seems justified in that respect.
- The conversion rate—i.e. those purchasing the IAP after downloading—is about 10% among North American and European countries. We felt that was pretty good. Very interesting is a doubling of that—i.e. 20% to 30%—in the nordic countries of Norway, Finland, Denmark and Sweden. Elsewhere it's around 4% to 5%.
- A big outlier in this data is China. The downloads in China are 65% of those in the United States, with the next country, Germany, at 20%—i.e. we've had a lot of downloads in China. But, nobody in China is purchasing the app!; the conversion rate is dead last at 0.3%. So it seems that the effort of localizing Rego 1 into Chinese didn't pay off.
- Finally, we need to keep in mind, before jumping to any concrete conclusions, that this data represents three versions of Rego and that the app has been featured in various country-specific App Stores at various times.