Bad for Apple, good for Devs: Pirates make microtransaction purchases

While Apple reports that it’s lost an estimated $450 million from mobile application pirates, it looks like these same pirates, while skirting the actual app purchase, are willing to make in-game purchases.

Tapulous_iphonePresented at this past weekend’s Midem Music Conference in Cannes, Tapulous (makers of Tap Tap Revenge) head of business development Tim O’Brien, revealed that while Tap Tap Revenge has seen approximately 2.5 million downloads within its first two months, about 1 million of those downloads were from pirates. Certainly, a situation that would presumably make any developer justifiably nervous. Tapulous, however, is looking at the situation differently.

“We know who they are,” comments O’Brien. “We’ve started running ads to the pirate users more aggressively. Some of those users, because we sell virtual goods, have become high-volume users.” O’Brien fully admits that while the application itself may be pirated, the sales of virtual goods (i.e tracks and avatar customizations) within the application can still remain profitable. For the developer at least (remember Tapulous has reported revenues of over $1 million per month)…in this case, Apple is the one left holding the bag.

Tapulous currently has around 25 million users through it’s various iPhone games. Given that Tap Tap Revenge saw 2.5 million downloads within the first month, of which 1 million were pirated downloads, if we apply this example to Tapulous’ overall figures, that would put them more in the ballpark of 35 million users. Their current iteration of money maker Tap Tap Revenge (3) launched only last fall for $0.99. Tapulous primarily monetizes through sales of in-game tracks and avatar customizations ranging from $0.99 to $2.99, and states that they’ve been profitable since June 2009.

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