Are iPhone app downloaders like Second Life denizens?

Two years ago, there was lots of controversy over the real popularity of Second Life, Linden Labs’ heavily hyped virtual world. How many of the 2 million-plus registered avatars represented people who actively participated in the community, as opposed to just trying it out once or twice? As it turned out, not many. Thus the outflux of businesses that unwisely set up virtual shops or newsrooms.

Today’s Comscore figures on iPhone application downloads, the first such data to track downloads over all time, present a similar conundrum. Especially for the games designed to make money on Apple’s portable devices (as opposed to applications that tie into websites, like Facebook or AIM).

Tabulous’s ryhthm game “Tap Tap Revenge” has been downloaded by a stunning 32% of iPhone and iPod Touch users, for instance, making it the devices’ no. 1 application. Namco’s “Pac-Man” is number 5, at 23%.

It’s tough to say how many downloads those represent. While there are over 30 million iPhone and iPod Touch owners, comScore didn’t indicate how many of those count as “Apple App users” (as opposed to the people who own one of those devices but have never touched an app). But suffice it to say both those apps are well into the millions.

The problem in figuring out what it means, of course, is that they’re both free. In fact, as far as I can tell, every app in Comscore’s top 25 list is free. No surprise there. But when an app is free, the barriers to download it are, well, zero. You can try it out once (or maybe never), and then delete it when you’re done. Nobody has made any money.

It’s kind of the equivalent of calculating perfume sales based on everyone who walks by and gets squirted by an eager salesperson.

Tapulous’ CEO Bart Decrem is very straightforward about this, stating, “With such a large base having already installed the free version of the product, converting even a small portion into paid versions using premium content like Coldplay and Tap Tap Dance represents significant revenue upside.”

In that sense, of course, the app store is nothing like Second Life. Developers aren’t abandoning iTunes’ App Store. On the contrary, it’s increasingly full, so much so that those looking to make money from it are complaining that it’s incredibly difficult to stand out, even if they have very high quality content in which they have invested substantial sums.

Developers with free apps are either promoting another service or trying to tempt users into paying money for a more fully featured version of the same app (something that may become easier when the new iPhone software starts allowing in-game downloadable content). But there’s really now way to tell how successful they are. All we know so far is how the sampling is going. Not the buying.

ComScore’s entire chart:


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