Microsoft subsidizes developers up to $600,000 per Windows Phone app
How desperate is Microsoft to get developers to write apps for Windows Phone? The company is willing to subsidize them up to $600,000 per app. — With an estimated 70,000 apps available for Windows Phone …
Context & Ripple Effects
This is the latest escalation in a two-year paid-seeding campaign for the Windows Phone catalog. Microsoft spent more than half a billion dollars to jump-start Windows Phone 7 back in August 2010, and by September 2011 Nokia was also paying developers directly to fill the store — so the $600,000-per-app figure extends an established subsidy model rather than opening one.
The scale of the gap it is meant to close has been shrinking but remains large: the marketplace hit 30,000 apps when Mango submissions opened in August 2011 and stands at an estimated 70,000 now — still far behind the incumbent mobile stores. The pickup across The Verge, Mashable, TechCrunch and others shows the subsidy itself became the story.
First-order effects
- Developers willing to port or build for Windows Phone now have a path to six-figure compensation per app from Microsoft, making the platform's economics independent of actual sales through Marketplace.
- Every dollar of this program lands on Microsoft's P&L as customer-acquisition spend, deepening the already-substantial investment begun with the 2010 jump-start fund.
Second-order effects
- Apple and Google face no need to match the subsidies since their catalogs attract developers organically, meaning Microsoft's spending buys parity rather than advantage — a structural cost handicap in the platform race.
- Quantity-driven payouts sit uneasily beside Microsoft's own crackdown on Marketplace 'spam' limiting developers to ten apps a day from September 2011, forcing the company to police quality in a catalog it is simultaneously paying to inflate.
Third-order effects
- If cash-for-catalog becomes the standard entry fee for any would-be mobile platform, the barrier to launching a new OS shifts from engineering to balance sheet — favoring incumbents with deep pockets and raising the odds that smaller platform contenders simply cannot compete.
- A marketplace seeded by subsidy rather than demand tests whether paid apps convert into genuine user pull once the checks stop, the open question hanging over the whole strategy.
The trend: Mobile platform competition is increasingly fought with direct cash subsidies for app catalogs, as Microsoft and Nokia both pay developers to close the breadth gap with established app stores.