SmartPhone Application Development can be Taxing

Apple XCode Organizer Log

I have been watching the new development and launch plans for the PS Vita.  This is a new device from Sony which is basically a hand held PS/3-style gaming system with WiFi and AT&T Wireless connectivity built in.

This is an interesting device for a number of reasons.

First of all it represents in many ways an Applish/iPhonish view of the world in that its a self-contained world (like the iOS/iTunes/App Store) focused on its particular market niche: gamers.

What's interesting though is that gaming is not really all about gaming anymore.  Is Second Life or Sony's "PlayStation Home" a game?  I think this is no longer a simple question...

For example, there are many people who make a living from Second Life - there are even millionaires (some who's net worth is not even measured in US dollars but Linden dollars).

So is spending time there playing a game or are their legitimate business reasons to be there?

Similarly for PlayStation "Home." 

While not a monetary-based world like "Second Life" there are certainly business opportunities there (for example creating "products" like games or furniture or clothing that people purchase and their avatars wear).

So the question becomes where do you (and for that matter the tax authorities) draw the line?

If I want to build a building on the corner and I have a lunch with a developer to discuss it or meet a banker at a coffee shop to discuss financing these are legitimate business expenses.  Wouldn't the same be true virtually?  Meeting virtually to discuss business is no less legitimate - I might do this to discuss an business opportunity in the non-game "real world" as well as a "virtual world" opportunity.

Use of cellphones in business are controlled by IRS classifications such as "listed property" (see this for a discussion).  But these types of rulings relate only to use as a phone.

What about use as a software development platform?

Well first of all you have to pay Apple for this privilege (it costs about $100 USD per year to sign up).

Second of all you must install a specific "certificate" on your phone to allow it to work as a development device.  Unless you do this you cannot develop software on it.  (Though you can develop software on the "simulator" supplied with XCode.)

Third your development environment "logs" your use of the device for development - making detailed log entries for problems that occur during development (which are numerous).

Fourth the Apple development environment provides a "simulation" of your iPhone.  Clearly developing and testing on the simulation is more efficient than using the actual device because the overhead of communicating across the wire is eliminated.  But you are non-the-less developing iPhone software there as well.

Reviewing my recent logs (image above) shows extensive use of the iPhone - days and days of continuous work-hours usage as a software development platform.  XCode keeps logs like this for all development platforms - iPad's, iPhones, etc.

Now most people are not software developers so none of this would apply.  And my guess is that the tax authorities are not used to dealing with software developers.

I have a extensive Time Machine backups of these logs as well as a complete log of my progress in developing code for my applications.

So what if I want to develop for the PS Vita (or iOS device or any other "game" device)?

I think that, like any other widget, I should be able to purchase and use one for purpose of determining whether its appropriate for business, for development, what its technology is (can I duplicate it without violating a patent, for example), how do users us it (as in I can us it or watch others do so).

Clearly its necessary to purchase such a device to make a determination as to whether its appropriate for my business - I cannot examine this without the device.

I think what's interesting here is how software developers are held as if they are simply "end users" of devices.

At this point I have routine, documented business conversations with other businessmen regarding my applications, my products, my use of the devices, and so on.  We discuss technology, market application, user interfaces, and so on.

So if I meet someone in Second Life or PlayStation "Home" to have a legitimate business discussion - say about a product to sell there - what then?

Clearly I need to buy Second Life or a PlayStation (or perhaps a Vita) to do this - it is necessary to even have the discussion in the first place.

The Vita is also interesting because its provides social functions, i.e., a web browser, access to Facebook and other social media.  While not a phone per se you could use it as such in PlayStation Home were it supported.

Also, what if I work with people who are accessible via Home as their primary means of internet telephony?