$0.99 is Not Always the Way to Make More $$

Hey arn, what time period is this calculated over, would you happen to know?

 

The reason why I ask, is because the last time I checked there were some extremely expensive apps in the top grossing list ( $50+) and I was just curious how many sales they were getting at that price to be in the top grossing list. Definitely interesting to see the differences between the two lists. The balance between exposure and revenue, with exposure due to a top list in particular, is fascinating to me.

 

But a drop to .99 boosts visibility which boosts sales. One day, one weekend can lift an app to a place where it makes more and the price can slide up again?

 

Arn is right. I went to check the app list and there are only two top-grossing apps in the top 20 that are 0.99, and neither of them are games. Geared and BATTLE BEARS make number 23 and 25 respectively at a buck, but the vast majority of the games on this list are big names and big (for the appstore) prices - Madden 10 and Modern Combat: Sandstorm are the two games in the top 5.


People hear about those games, and they'll pay the big prices for the quality. The combination results in the high gross values they get.

So the real question is, does a less recognized indie developer do better when they price their game high or low?

 

That's the thing. Looking at that list, pretty much the only indie games on the top-grossing list are priced at 99c. Spider is a notable exception, but it's gotten featured by Apple quite a bit. So sure, people will pay $7.99 for Madden, but in general, they won't pay a lot for an indie game they've never heard of.

I still think that unless you're riding on a name or some other publicity source, the best way for an indie dev to maximize their exposure (and therefore revenue) is to start at 99c.

 

Yeah, that's what I mean - we happen to know Spider's venerable genealogy, but the average user does not. Whereas the average user HAS heard of Madden. And Imangi Studios, obviously. It's a household name. In my household.

 

I think that Gameloft's new method of selling games at £3.99 is working well.
I think that customers probably feel that they are getting a good deal (they feel it should be costing them the traditional £5.99), and Gameloft are still making quite a bit of money from it, as they are only losing £2 on each purchase, but probably gaining quite a few more customers.

 

I wish I knew what the "average user" wanted. The sales data paint a very confusing picture.

 

That's proved to be a foolish route to go for the vast majority of apps.

While a drop to a buck could boost visibility, it is not always the case. In fact, it is more often not the case. And, quite frankly, even when it does, guess what? The app typically drops off the charts very quickly, quicker still if the price is then bumped back up.

But what Arn is really getting at is the initial price point being a buck rather than periodic sales prices. Periodic sales prices, after the initial "highest price possible" introduction can work, although not as often as people would think, by doing that to which you alluded: increase visibility, temporarily, for an app that will return to full price in short order, or to a new price that, although lower than the initial price, would be higher than the temporary sales price.

And even in those cases, tbqh, the sales prices going down to a buck are foolish at best as they ignore potential revenue for increased visibility. After all, most often if you drop from, say, $4.99 to a buck and skip all in between, the people willing to pay those in between prices will just buy for a buck.

The best pricing model is still the classic pricing model: initial price as high as the market for that app is willing to pay, then incremental price drops over time to snag those interested in the product, but not willing to pay the initial price. Periodic "massive drop" sales can work, but, IMHO, they're better off left to times when the app life cycle has begun to run its course rather than early in the life cycle.

I think the game developers, in particular, think that since the App Store for Games market is so accelerated in the introduction of new apps that so too are the life cycles of these apps, and that's not really the case, although I concede that it is accelerated compared to home consoles or portable games systems (PSP and DS). But even still, good games, really good games, will sell for as long as there is interest, and as long as the game remains good and there are new consumers adopting the platform, those games will have a good product life.

Look at how Sega has handled Super Monkey Ball. I bash Sega's output on this platform often, as it hurts my little gamer heart that Sega has become a shell of its former self, but Sega has handled Super Monkey Ball superbly. Even the intro, as people forget Sega established the "high end" price ($9.99) consumers were willing to pay on this platform. But Sega has NEVER dropped Monkey Ball to a buck. They've gone with incremental drops over a period of time, and it's helped establish that game as one of the highest grossing games in App Store history.

Some may point to that being a known IP and therefore having a leg up, but the point still stands. More iPhone/touch game publishers ought to look at how Sega handled their product's pricing rather than the "rush to the bottom" publishers, because most who've followed the former have met with good returns over an extended period of time, while those going for the latter have mostly met with broken dreams and spirits, and even those who have succeeded with that model have been left with games with incredibly short product life cycles.

 

There are other, better ways to do so, but indie devs don't wish to invest in marketing for the most part. Or they don't really know HOW to market things.

Just having a good game isn't enough anymore. It hasn't been in the industry as a whole for years.

And you can't really maximize revenue going for the lowest price point as consumers of every possible interest level in your game are paying the exact same price.

While I don't think the majority of indie devs can go as high as $10, I do think the vast majority could at least go up to $2 and maximize potential earnings for themselves a bit more. $1 more per purchase, to be exact.

I disagree.

They aren't gaining a few more customers. They're merely lumping in the customers that would be willing to pay higher initial prices with those unwilling to pay higher initial prices. In that way they're actually lessening potential earnings, lessening the product life cycle for their games, and really, honestly, doing themselves a disservice.

If there are a sizable number of people among those who bought Gangstar willing to pay $10 for that game, why not sell them the game at that price? Instead the rush to gain visibility regardless of potential revenue losses has seemingly blinded Gameloft too. I disagreed too with their ~40% price drops too soon for the other games in their catalog. That they did that is what decreased the numbers of those willing to pay $10 initially for their titles, btw. It's a sort of...Pangea effect (Pangea used to do the same thing, but far more rapidly and with higher price drops).

The only potential game that they had to cut prices on, IMHO, was NFL 2010, and that's mainly because that really is the only way, sadly, to compete with the Madden brand name juggernaut. But, when they were the only "game" in town, they could've gone $9.99 initially. They went to $4.99 too soon, and now they gotta go to $2.99 to seem an even better value than Madden, whereas if they stood pat at $9.99 they might've been able to go down to $4.99 now instead of $2.99.

 

Thanks spiffy. You know, you could open a very profitable business consulting indie game devs on marketing. If you can maximize everyone's revenue and take a cut of the profits, you could make enough to retire pretty quickly

 

I can see where you are coming from, and I understand that the initial $10 price tag does earn the developers quite a bit of money. But in the UK App Store (my opinions/reasoning is completely based on the UK App Store, so I may not be giving a fair representation of the App Store as a whole), Gameloft's apps seem to be up quite high in the top ten. For example, Modern Combat: Sandstorm suddenly shot up into the top ten of the top 100 APPS (not even top 100 games) and it has remained at #5 for quite some while now. I have a feeling that it will stay up there for quite some time, probably longer than most $10 games do. So while maybe the $10 games make more money in the first week, I think that maybe the $6.50 games (or whatever £3.99 equates to) make more money in the long run. £3.99 just seems to be a good comprimise between income per purchase and popularity/exposure to the customers (via being in the top 10/100). Just my 2 pence, although you are probably right

 

lol

Nah.

I wish though. I'm just a neophyte with my foot barely in the door.

That said...maybe in a few years.

Really it's not only about the ability for devs to potentially maximize their earnings for me, but also the idea that I think they're severely undervaluing both their product and themselves as creators when they go for rock bottom prices. A lot of the games that I've bought for a buck, from Flight Control to iDracula to many others, I've felt were worth more, and I don't understand why their creators don't feel the same way.

Or maybe they do, but that rush to the bottom for more visibility blinds them. I can't really blame them too much, as selling a product, especially something that you've actually made, is a scary venture. Exciting...but frightening. What if no one likes it? What if, worse still, it's ignored? So I can see why they go straight for $0.99, or feel they simply have to...I just don't agree with it, at all.

 

Price drops.
I have a long list of games I have seen that I have not bought. And I have not bought them simply because I already have a stack of games yet to be played / completed. So when game X is released the price doesn't matter. I have .99 games on that list, I have pricier ones there. But the turnover rate for new games is so fast that I cannot afford to keep up - so I make a note and every so often check that list. Some I remove after seeing long term reviews. And others I do not notice until they pop up here as being on sale. Would they have got their original price from me? Maybe, maybe not - would depend on money, others being released that I want more and long term reviews. But reducing the price will make a big difference and the main one there is visibility - I'll still re-read reviews.

So for some people it's not about the price (though that is a factor) it's about "I'd forgotten about that game".

That said, if games get an excellent reception here devs could consider increasing the price?

 

What will be interesting to do is compare data from the top sales lists with the top grossing lists to see what happens during a price drop. Conceivably, if a game goes from $3.99 -> $.99 they will have to make four times to sales to make the same amount of money. If they make three times the sales, they might rise on the sales list but drop on the revenue list.

Exposure on the revenue list might make price drops less necessary or even more dangerous.

 

I think that initial $0.99 pricing to gain exposure with subsequent price rise could work very well. If the game is good, it'll get initial good exposure, and perhaps gain some reviews that will encourage further purchases. That's what Spider and many other good apps did successfully. How many people pass on the new game, simply because its not $1? "Limited introductory 60% off" may actually work well to draw customers and get noticed, especially for indie devs with $0 marketing budget.