An iPhone app developer found a way to take advantage of software piracy for profit. The creator of the popular viral iPhone game Tap Tap Revenge is using pirated versions of his game to sell music to illegal downloaders. So far, Tap Tap Revenge has collected around 2.5 million downloads. Of all these downloads, around a million of them were pirated copies. Rather than get depressed by a potential loss of profit, the creators of Tap Tap Revenge got creative. They figured out a way to market music to people who otherwise wouldn’t have paid anything. By offering the option to purchase music from within the game, the company soon found sales from unexpected sources.

In the end, everyone got what they wanted. Legitimate customers bought the app and used it without jailbreaking their phones, while pirates fell in love with the game so much that they had to buy some of its music. The game’s creators earn around a million dollars a month from these efforts.

There’s been a lot of buzz lately surrounding piracy and the effect it’s having on app sales. One estimate suggests that Apple has lost around $450 million in potential revenue from the App Store due to piracy alone since the store first opened. With so much recent negative news about hacking, it’s certainly refreshing to see a fellow developer making lemonade out of it. We are nothing less than completely impressed.

As a final note, the recently released new version of Apple’s iPhone OS is drawing mixed reviews. Version 3.1.3 promises to improve the accuracy of the battery indicator and fix some issues with the Japanese Kana keyboard and some third-party apps. For many, this new version of the iPhone operating system is here to help until Apple releases version 3.2, which is intended to be a much more significant improvement.

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