How to Earn Money from Free Games on the iPhone (Part 1)


Illusion Labs, creators of the hit Labyrinth game available in Apple’s App Store,  is making a point by producing a variation of the game and presenting it as a marketing tool for a brand of beer.

Can free software on cell phones make money? Yes, if you are   part of Illusion Labs, a very young company located in the Swedish port city of Malmö.

Illusion Labs was started a year ago by Carl Loodberg and Andreas Alptun, who had worked for another company called TAT, where they built software for companies including Samsung and Nvidia. (NVDA). They founded their own company in order to concentrate on the development of programs specifically dedicated to the Apple iPhone. “When the iPhone came out, we were thrilled with the big screen, the graphics chip, and the good components,” says Loodberg. “We thought it was too good an opportunity to pass up.”

Looks like they were right. The first game they developed became one of the most popular software available on the iPhone. This game is called Labyrinth, a modernized and digital version of the old wooden game board in which you have to direct a small silver ball to make it follow the path of the maze while avoiding dropping it into the holes. The game, which is available for free through Apple’s iTunes program (AAPL), is downloaded 80,000 times a day, according to Loodberg, and  receives rave reviews from its users. ‘Extremely precise control,’ one person commented on iTunes. ‘Easily maneuverable, hands-free action and realistic,’ added a second user.

Even though the game is free, its success could  earn Illusion Labs ample profits. The company sells an embellished version of the game, which is also very popular, for $6.99   (€4.65) on iTunes. Even more promising: advertising agencies have contacted the company to develop versions of the game, on which advertising logos would be inscribed.


 Illusion Labs has already developed a game called iPint for Carling Beer, through London-based ad agency Beattie McGuiness Bungay (BMB). While playing iPint, an iPhone user tilts her phone in order to direct a glass of beer, avoiding various obstacles located in a bar and with the aim of putting it back in the hand of a customer waiting for this beer. Once the beer has reached its destination, the screen changes to a pint of beer with the Carling logo on it. A virtual beer then takes over the screen and fills up, then disappears when you tilt the phone to simulate the action of having a drink. Loodberg and Alptun will not comment specifically on the amount of money they received for performing this service for Carling.

Here we are in a new era of marketing and mobile phones. Previously, cellphone designers including Nokia (NOK) and Motorola (MOT) as well as wireless carriers   such as AT&T (T) and Verizon Wireless (VZ/VOD) kept a close eye on the options that cellphones offered. to their users. This is now changing, as mobile telephony professionals let customers install new programs on their phones and surf wherever they want on the mobile Web space.

The company Apple, whose phones in the United States are sold exclusively by the operator AT&T, was the main player in this trend. When Apple announced the launch of its iPhone 3G last month, it also unveiled the iTunes App Store, which allows any independent software company to sell its products to phone users. Already more than 1000 programs are offered by these designers, members of companies and associations ranging from Illusion Labs to Major League Baseball via eBay (EBAY). Other wireless carriers are following Apple’s and  AT&T’s approach. Verizon Wireless management has said it will open its network to people who are not customers at home. Coming soon, there will be more opportunities for designers to work with a wide variety of phones, ranging from devices from Apple to BlackBerry from Research in Motion (RIMM) to phones from HTC.

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