Microsoft lays out moneymaking options for Windows Store developers

Microsoft swipes rivals' app-store strategies, presenting would-be developers with menu of ways to profit from Windows Store

Application developers aiming to make a buck through Microsoft's Windows Store can finally plug some real numbers into profit projections. With the release of Windows 8 imminent, the big Redmond machine has revealed the pricing structure and payment information for its application market. In doing so, it's evident Microsoft is drawing from the playbooks of pioneering purveyors of third-party apps, making its own adjustments along the way.

First off, developers will still have the option to offer their apps for free -- but if they choose to charge, the minimum price tag will be $1.49 and the max $999.99. Why $1.49 when rivals set a minimum of 99 cents? Perhaps only Steve Ballmer knows for sure. But it does mean that after Microsoft takes its industry-standard 30 percent cut, the developer pockets a bit more than a dollar per app instead of 70 cents. Every penny counts.

Speaking of putting a bit more cash into developers' pockets: Once an application generates lifetime sales of $25,000 -- including app sales and in-app purchases -- the developer gets to keep 80 percent of the profits instead of 70 percent.

Beware, though: Microsoft won't provide payment until you accumulate $200 in sales. Thus, if you are stuck at, say, the $195 mark, you won't see a penny until you make $5 more in sales. Additionally, there are costs associated with uploading apps to the Windows Store in the first place; you need a Windows Store developer account, which costs $49 per year for individuals and $99 per year for companies.

It should come as no surprise that the Windows Store will support in-app purchases right out of the gate, as they are proving to be quite the lucrative revenue stream in the mobile world. Market research company iSuppli predicted earlier this year that the market for in-app purchases -- which can range from in-game currency to snazzy features -- will increase from $970 million in 2011 to $5.6 billion in 2015.

Of course Microsoft wants a piece of that pie, which is why the company is spotlighting its support for in-app purchases and attempting to make it easy for developers to embrace the functionality. The company advises developers to "think through your feature model completely before you write a line of code. The features that you intend to enable as in-app purchases should be as compartmentalized and separate as possible from a code perspective as well, so you can easily incorporate them into your licensing model, and so your app can't invoke them through other code paths (or duplicate it by similar behaviors)."

Developers may use their own existing billing systems to handle the in-app transactions, according to according to Arik Cohen, lead program manager for Microsoft's commerce and licensing team. However, any third-party transaction system must meet certain certification requirements. Among them, the transaction provider must be identified when a user makes a purchase; users much be prompted for authentication for a transcation can be processed; and the payment processor must meet the current PCI Data Security Standard

Microsoft is also letting developers create trial versions of their apps for users to test-drive before committing to a purchase. Developers can choose which features they want to include in the trial version, how long the trial lasts, and what happens when a trial ends. Options for the latter include presenting users with a prompt to purchase the entire app while letting them continue using the trial version -- or disabling the app entirely.

Developers aren't required to include a trial period, but according to Cohen, "on the Windows Phone, we have seen apps with trials bring up to five times the revenue of apps without trials."

Along with revenue from sales and in-app purchases, developers can make money via in-app advertising. To Microsoft's credit, developers aren't locked in to using the company's advertising platform; rather, they can use any ad provider that meets the technical certification requirements for building a Windows 8 app. Microsoft already has unveiled its Advertising SDK for Windows 8 Release Preview to assist developers in integrating ads into their apps.

Speaking of tools, Microsoft also is offering functionality for developers to test their app functionality in the Windows Store (ensuring the "Purchase full version" button is displayed properly) before uploading the app. "The CurrentAppSimulator object gives you access to all of the functionality that the Store provides via the CurrentApp object with a couple of very important development tools: the ability to simulate any response the Store service could provide (network unavailable, user cancelled) and an ability to 'set' the current users state through a configuration XML file," Cohen wrote.

Microsoft is clearly looking to entice developers to code for Windows 8 as it plays catch-up with Apple, Google, and others. Whether those efforts will bear fruit remains anyone's guess -- and for the time being, predictions run the gamut from cautious optimism to straight-up rejection.

This story, "Microsoft lays out moneymaking options for Windows Store developers," was originally published at Get the first word on what the important tech news really means with the InfoWorld Tech Watch blog. For the latest developments in business technology news, follow on Twitter.

Copyright © 2012 IDG Communications, Inc.

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