The Long Road to App Store Fame and Glory

With its popular "Tap Tap Revenge" series of games, Tapulous has long been a star of the Apple (Nasdaq: AAPL) App Store gaming world. Lately, though, the buzz is all about the money: reportedly the private little company with 20 or so employees is now pulling down nearly US$1 million a month in App Store sales.

If you're like me, you're already doing the math -- $1 million a month equals $12 million a year, 20 employees, and yeah, that's a tidy profit.

Gold rush, anyone?

Of course, the gold rush to the App Store has been on ever since Apple CEO Steve Jobs introduced it in 2008. There are already well over 100,000 apps in the store, so the Tapulous sales don't really change the rush, they just redefine it into bigger nuggets of gold.

Keep Doing the Math

Even if the various Tapulous games have been installed on more than 20 million iPhones, some of the apps are free, and that doesn't exactly represent a $1 million a month revenue stream. After all, the iPhone user base is still growing, but growing enough to snag that many new downloads and sales?

Tapulous might be a relatively small company, but it's taken a bit of luck and shaped it into an enviable business -- Tapulous isn't just a iPhone game developer with a good idea and pretty graphics; the company has been astoundingly astute. Plus, its employees are clearly working their asses off.

In terms of full disclosure, I haven't talked to Tapulous, so I'm avoiding any company enthusiasm and spin. As for the "Tap Tap Revenge" games, yeah, they're pretty good, and I've dinked around on them, but I haven't played all of them, and I don't intend to. I can see how they can be fun and addictive -- who doesn't love a good beat, a great song, achievements and avatars? -- but I just don't have the time for any new addictions. So, as I'm raving about Tapulous here, I'm not a fan of the games.

The danger in many of the latest "$1 million a month stories" I've been seeing lately is that they don't seem to appreciate the amount of effort that goes into carving out a niche and making a business. That -- coupled with all the noise about the App Store being too big, too unwieldy, too difficult to be a one-hit wonder and strike it rich -- is the foundation here. There are lots of reasons Tapulous is making money right now, and they're worth exploring.

Complicated Treasure Map

So, how has Tapulous created such a big revenue stream? Somebody had an idea that matched the touchscreen capabilities of the iPhone with a game that fit the right demographic of early iPhone buyers -- music lovers, no doubt, who dove into the iPhone before the App Store even existed. So, great idea.

Next, the company needed a bit of luck. "Tap Tap Revenge" had to get noticed, had to get played, had to get a head of steam. It definitely benefited -- and perhaps drew a good amount of inspiration -- from all the attention of the big console games "Guitar Hero" and "Rock Band." Either way, luck is enough for a quick payday, but it's not a good business plan.

Tapulous created a game that's extensible -- meaning, it's not just three levels you have to conquer and then do the game over again or forget about it. As you play, you gain experience, points, and coins that let you progress through new levels, go to a virtual store to dress your avatar or add tattoos -- a full sleeve is about 25,000 coins. You can play with your friends online and even do battle while playing by messing up their tapping with weapons. The amount of stuff you can do within the game, as well as socially, is pretty amazing, and for just $.99, Tap Tap Revenge 3 is a darn good deal.

But there's so much more. You can play to great songs by the hottest artists with available tracks from Metallica, Smashing Pumpkins, Foo Fighters, The Killers, No Doubt, Dave Matthews Band, Lady Gaga, Coldplay, and the list goes on. Plus, there are lots of freebies and special promotions to keep users engaged and interested.

So how does Tapulous turn a $.99 purchase into so much more? From the store, Tapulous will let you download a free track from the online in-app store, which also highlights special paid artist packs of songs. Brilliant. Meanwhile, the company doesn't rest there: Tap Tap Revenge has its own snazzy Web site that extends the brand for fans. There's online discussion forums, online chart, charts, a Tweet Box, and a gob of other stuff. Seriously, a gob.

Next, Tapulous is tapping into the nature of music fans by creating special artist-focused editions that sell for $4.99: "Metallica Revenge," "Lady Gaga Revenge," "Dave Matthews Band Revenge," "Christmas With Weezer," "Tap Tap Coldplay 1.1," and "Nine Inch Nails Revenge." What's better than being a fan of the game? Being a fan of the game and the fan of an artist with a special edition game.

Much More Work Than We Realize

To sell the songs, Tapulous reportedly works out affiliate deals so that it gets a cut of the action, plus it has in-game advertising, and the company appears two be working with big Hollywood and music industry players to create custom themes for use within the games.

Tapulous is also super active with its community of fans. They just had a Tap Tap Roadtrip event at the Upper West Side Apple Store, where 60 people showed up to play Tap Tap Revenge games (along with a demo of the company's next game to come, "Riddim Ribbon"). "The gamers put me to shame five times, and that means that everyone who attended won five premium bundles of their choices, which they can download in Tap Tap Revenge 3," noted company CEO Bart -- Tapulous is on a first-name basis, you know -- in a blog post on the event. So that's right, the CEO is out playing his game with fans.

Nice.

The Moral of This Story

Most of the Tapulous headlines this week focus on the little revealing tidbit about the $1 million a month, which furthers the idea that developers can get rich off the Apple App Store. And they can.

But usually, like most anything else, it requires a great idea, a little luck, and helluva lot of hard work.