Larva Labs was there when the Android Market began two years ago. The New York developer launched Retro Defense, one of the standout games on the Android (s goog) platform that topped the paid charts. Other apps have followed, including Slidescreen, an innovative home screen replacement app. What hasn’t changed is the waiting for decent revenue.
But now more than ever, Larva Labs — which has chronicled many of the shortcomings of Android Market and the plight of Android developers on its blog — sees some cause for hope. Part of it has to do with the growth of Android, but it’s just as much about new monetization opportunities: things like alternative app stores, in-app purchases and the growing potential for ad revenue. “We were in wait-and-see mode a year ago, but now we’re at the stage where we can see light at the end of the tunnel,” Larva Labs co-founder John Watkinson told me.
Things are still not great; Watkinson said the company’s Android apps are profitable, but hardly robust. Even with the explosion of Android device sales, Larva Labs’ app revenue remains largely unchanged in recent months. The company’s iPhone (S AAPL) apps do more to pay the bills, which has been an ongoing issue, captured on the Larva Labs as well. The company has been one of the more vocal developers in highlighting the needs of the Android platform and documenting its performance.
Watkinson is encouraged by sales of Android devices, which topped the third quarter smartphone sales charts in the U.S., but he’s more encouraged by things like Verizon’s VCAST App Store, which Larva Labs has submitted its apps to. The Verizon (S VZ) store, which will be available on the carrier’s Android devices, includes the option for carrier billing, a key feature Watkinson hopes will shake loose new paid downloads. The Android Marketplace requires you to buy using Google Checkout, a service that’s more difficult to use, especially for people who haven’t already set up an account. Watkinson said Larva Labs has also submitted apps to Orange’s app store in the UK, and is open to other apps stores, both from carriers and independent providers. Though he worries it will add more complexity and confusion for users and more work for him, it has the potential to get sales moving. “I don’t know how it will turn out,” he said. “It’s a risk, but it’s necessary, because Android Market hasn’t been keeping up.”
Watkinson also likes the new options for in-app purchases from companies such as Zong, Boku and PayPal (s ebay). He said he’ll be really excited when Google also offers in-app purchases, helping fully unlock the promise of freemium apps. I’ve written about how freemium games now occupy more than a third of the top-grossing list of the iPhone App Store. Freemium is a powerful tool, and one that may be critical for Android developers, who still struggle to get people to pony up initially for apps. Watkinson said Larva Labs is also learning how to better monetize ads, and the company is now looking to craft programs that are not only unique, but have clear potential for ad revenue.
It’s good to see long-time Android developers finally seeing reasons for optimism, though it’s unfortunate that many of the solutions are coming from third parties rather than Google. It’s still going to be a while before Android devs see the same kind of money iPhone developers see. There are cultural issues around Android, such as it’s apparent favor of free downloads. But the tide is slowly turning, and it’s about time for patients devs like Larva Labs.
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