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5 App Developers who Hit the Mega Millions Jackpot

There are literally millions of apps in the App Store and Google Play. Anyone who dares to tread waters in the app development arena must somehow make their app at least somewhat popular to earn a decent income. It is not easy. We’ve heard stories of app developers who spent months designing their app, but only to debut that app with minimum downloads for months.

Data suggest each app publisher, on the average, makes around $8500 per year. But keep in mind that the size of each app publisher varies. One app publisher can be comprised of a 25-person team of developers and analysts, while another publisher may be just an one-person indie app developer. If a team of developers is only able to make $8500 per year in the App Store, that team may not last very long. But despite the difficulty in generating a decent income with app development, do you know there are a few app developers who have hit the Mega Million Jackpot with just one or two apps?

Yep, the odds are just 100 times easier than winning the Mega Millions lottery, which coincidentally just landed its biggest Jackpot last month! But still, with a great design, terrific marketing, and a lot of luck, an app can get so popular that multi-billion dollar companies would want to buy out the app developer just to get that app all for themselves. And these companies are willing to pay upwards of a billion dollars. The following app developers beat the odds to take home that Mega-million payout.

Instagram- Bought by Facebook for $1 Billion

Founders Kevin Systrom and Mike Krieger (image via NYT)

The biggest news that hit the app industry this week is Facebook’s acquisition of Instagram for 1 Billion! Wow! who could have known making a photo app with a few filters and social interactions can make you ridiculously rich. Perhaps founder Kevin Systrom had already seen the future when he was designing Instagram, which we awarded 5 stars in our review for its ease of use and awesome social features. Sources close to the company show that Systrom owned 40% of the company, which makes him worth $400 million before tax. A $400 million payout thanks to Facebook is worth even more than each of the three winning tickets in the record $656 million Mega Lottery jackpot drawn on 3/30.

Instagram is only a young, small company with 13 full-time employees that Systrom and his friend Mike Krieger cofounded just two years ago. With over 30 million iPhone users and millions of Android users it amassed after the Android launch last week, Instagram is looking to become a dominant force in photography social networks. And that is just enough to get an $1 billion offer from Facebook to make it the biggest mobile app acquisition in history.

Draw Something- Bought by Zynga for $200 million

Another big mobile app acquisition was made in March. OMGPOP was acquired by Zynga, the big daddy of freemium games, for $200 million. Of course, OMGPOP’s uber popular app, Draw Something, is the only app Zynga wants to get its hands on. This pictionary style social gaming app has all my friends drawing in their spare time. It even spurred a web sensation for discovering the best Draw Something artworks. But even OMGPOP is not taking any chances when offered a $200 million payout. After all, many App Store darlings come and go. Who can guarantee this Draw Something mania will last til the end of the year.

Openfeint- Bought by GREE for $104 million

What started out as a puzzle game named Aurora Feint in 2009 turned into a hugely successful social gaming platform for mobile devices. Jason Citron and his team were tired of making little money from designing games. “I wonder if we can take some of our chat and video board stuff and spin it into an Xbox Live for iPhone?” After initially launching with 15 developers and 30 games, thousands more added Openfeint support to their games in the following years. Thanks to all those app developers who put the Openfeint platform in their apps, Openfeint claimed over 75 million users just before Japanese mobile gaming giant GREE acquired it for $104 million.

Words with Friends- Acquired by Zynga for $53 million

Zynga acquired the popular Scrabble clone, Words with Friends maker back in November of 2010.  But it wasn’t until Zynga’s IPO in July 2011 that we finally learned the actual purchase price for the company.  Back then, Words with Friends had already gotten over 12 million downloads before the acquisition.  But just four months after Zynga’s acquisition, Words with Friends is able to double its players.  Currently Zynga’s Words with Friends still sits on the top 50 free app list for the iPad and iPhone.  An estimated 15 million active users play it every month.

Tap Tap Revenge! Bought by Disney for $20-50 million

Remember Tap Tap Revenge?  Yep, it used to be very popular, but you don’t see it in the top free app list anymore in the App Store.  Perhaps the developers got bored with the Tap Tap idea after they had been acquired as a subsidiary of Disney in July 2010.  After all, they haven’t released any new app yet in 2012!  The only app that was updated this year so far appear to be Justin Bieber Revenge.

Unlike the acquisitions above, Disney and Tapulous did not reveal the actual purchase price.  Disney appeared to be ultra paranoid in protecting this little secret.  But experts value this acquisition between $20-$50 million.  Based on the estimates that the Tap Tap franchise was making around $ 15 million in 2010, it’s likely that the deal was near the top of that range.

Are You the Next Winner?

After seeing these app developers raking in ridiculously large sums of money, are you jealous that your app didn’t have millions of users everyday?   Or are you itching to start developing your own apps to enter the MegaMillions jackpot in the app arena.  Everyone can dream, but it will take hard work and lots of luck to create that multi-million dollar app.    Best wishes to our new and veteran app developers!

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