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iPhone: Pricing

09-16-2008, 01:55 PM
#1
Joined: Aug 2008
Posts: 110
Pricing

Everywhere I look on the app store reviews, everyone b!+ches about prices. If a Game is $10.00, it should be $5.00. If it's $2, it should be $1. If it's 1$, it should be free. Even on this forum, people do it endlessly. I would have guessed most members here are gamers who play on some other platform and are aware that games for any other platforms at minimum cost 3X as much as the most expensive iPhone game. If not 5 to 7X as much.

Can anyone who has any industry knowledge tell me why games are so cheap for the iPhone? Obviously the solid majority of them are crap that would never be released for a console, and would have similar costs for computers because they're made by indie developers for fun. But Super Monkey Ball is a solid, console worthy title and it's still only $10! How is it possible? Is that much of the price of a regular video game tied up in publishing, and distribution & commercials?

Then Pangea, with all these really great games, starts slashing the prices of all of their titles. Why? Are they doing badly? Are they doing so well that they can afford to make them so cheap?

All the low prices, price cuts, and incessant complaining worry me about the future of the iPhone as a gaming platform. I want real gaming titles to be reliably available for this thing. I know there are some limitations involved, but not enough to make the platform max out with Ms. Pac-Man. Will these low prices scare away big developing studios? It has at least delayed one of them:

http://www.pocketgamer.biz/r/PG.Biz/...ure.asp?c=8575

Does anybody with any actual industry knowledge know anything about this?
09-16-2008, 02:49 PM
#2
Joined: Jul 2008
Location: Boston
Posts: 1,268
supply and demand

the app market is, huge

just the simple penetration, from the 10 million (iphone and ipod touch users combined) consumers who can access the store/market, simply select what they want, buy it, download it, and play it instantly with easy upgrading and add on potential.

some of the developers, like the Chopper Game, which originally sold for 7.99, sold 20,000 copies in the first month, so the developers 70% takehome income for that month was $111,860

there are no storage costs, distribution and or marketing costs unless the developer does their own marketing, so the actual cost to develop is a lot cheaper if it were on another platform.

the lower price points mean higher volume, so if you originally sold a game for $9.99 and sold 5,000 copies, when you dropped the price down to 4.99 you may have not made so much per copy sold, but more people bought it , like 10,000 because its the price of two cups of coffee

so i think its just supply and demand, volume, and its a new market and the developers can play around with it a bit since it's easy to update the applications

09-16-2008, 03:05 PM
#3
Joined: Aug 2008
Location: NJ
Posts: 292
Also, there are ZERO packaging/middleman/distribution costs (other than the flat fee to Apple that the developers know upfront), and the apps are NOT TRANSFERRABLE! Many people end up selling the games that they purchase for consoles to somebody else once they get bored of them. We cannot do this with these apps. In addition, as a result of that fact, the developers will sell many more copies of an app (while with console games, since many people resell them, there are fewer copies sold by the manufacturer). These apps should not be expensive just because you or anybody else thinks that they should be. We have to look at the difference in the markets and overall profit that these companies are making on these apps (many of them are less than 1 mb in size). Also, the companies that are porting apps are spending very little in doing so, as the apps have been created and developed. Therefore, they should not be worth as much as new and original apps. Finally, since the battery on these phones are weak, people do not spend hours playing them as they do with console games; I don't want to be paying (and will not pay) an exorbitant price for an app that I will play for one or two hours for maybe 10 times. It is not worth it to me. I think that the reasons are pretty evident.

One more thing: Companies that make games for consoles charge way too much, and they rip people off. Let's not use the price that companies charge for console games as the given value of such a product, because it definitely is not. These are games, not cures for cancer. Let's get our priorities straight, shall we?

Last edited by vandy1997; 09-16-2008 at 03:12 PM.
09-16-2008, 04:45 PM
#4
Joined: Aug 2008
Posts: 110
Don't get me wrong! I am all for cheap games! I'm just amazed at how cheap they are! Up to now rather than any explanation for this newly utopic situation, I've only seen complaints. I just wanted somebody who knew what they were talking about to tell me how it was possible, so thanks! Most of what you said was what I would've guessed (though I hadn't thought about resales) but when I saw the article in the link, I got worried that it was all too good to be true.
09-16-2008, 06:45 PM
#5
Joined: Aug 2008
Posts: 135
Quote:
Originally Posted by vandy1997 View Post
One more thing: Companies that make games for consoles charge way too much, and they rip people off. Let's not use the price that companies charge for console games as the given value of such a product, because it definitely is not. These are games, not cures for cancer. Let's get our priorities straight, shall we?
Ouch. Knowing someone personally on the inside during the development of Too Human (which I think was advertised on this site quite extensively over the past couple weeks), I would have to disagree with your statement that companies making games for consoles charge way too much.

Considering teams, yes, TEAMS, working together over a span of multiple years on ONE GAME ALONE need to be paid accordingly, not to mention other expenses such as equipment, office space, licensing if using another developer's engine, and add to that the amount spent on marketing and promotion of the game itself, it's a hefty price compared to someone whipping up an iPhone app/game in their mother's basement.

And take movies for example. The budget is say $150,000,000. This includes cast, crew, production, marketing, etc. The "majority" of these movies recoup their costs and 9 times out of 10 surpass their costs quite easily by a) theatre tickets b) Pay-Per-View sales c) DVD and other medium sales d) TV reruns.

If a game tanks, it tanks. There's no other way to recoup their costs besides initial sales and "Classics" sales.

/end rant

As far as iPhone apps/games are concerned, I'd gladly pay whatever for a game if "I" feel it's worth it, just as everyone else does, it's completely subjective. If John Carmack's rumored iPhone game in the works is stellar and iD decides it's going to be the first $19.99 iPhone game, I'll be the first to click on it!

I'm totally with mek on this one...supply and demand. If an iPhone developer sees that the initial buzz and sales of their $9.99 app/game is done, they may decide to drop it to $4.99...well then now they have a whole new bunch of buyers who were on the fence and will jump at $4.99.
09-16-2008, 07:48 PM
#6
Joined: Apr 2008
Posts: 2,438
Quote:
Originally Posted by vandy1997 View Post
One more thing: Companies that make games for consoles charge way too much, and they rip people off. Let's not use the price that companies charge for console games as the given value of such a product, because it definitely is not. These are games, not cures for cancer. Let's get our priorities straight, shall we?
I very much disagree with this. For a product like a game (not food, not medicine), the only thing that determines "too much" is the price people are willing to pay. I think devs should charge as much as they can. If they aren't, they are leaving money on the table.

As for the original poster, the reason people are complaining is that they can. I remember hearing a Mac developer say that pricing is tricky and you can't go by customer response. In that you if you pick $15, someone will always come to you and say, oh, "if it was only $10, I'd buy it." If you drop to $10, then someone else will say "oh if it was only $5, I'd buy it."

That being said, I think the iPhone market is settling out it's own prices. The pricing model is so fluid that it can be changed at any time and there are a lot of independent developers who are willing to cut prices.

As a result, for the iPhone a $10 game has ended up on the high end... but if people want really high quality games then they are going to have to be willing to pay $10 or even more. In order to attract big budget original games, companies are going to have to be able to make up the difference.

There's a reason that there are 10,000 puzzles games on the market and that's because they are relatively cheap to make.

arn
09-16-2008, 09:15 PM
#7
Joined: Aug 2008
Location: NJ
Posts: 292
Yes, when I say that companies charge too much for console games, that is solely my opinion. There are people who may think that $50 or $60 for a game is an adequate price - I don't. So I wait for the price to be cut in half, and then I buy the game. As I said before, I won't die if I decide not to buy the game right away. With respect to the number of people who work on a game (and the time and effort involved), I sometimes believe that less is more. Sometimes the number of people and number of years involved in creating a game is a waste. There are quite a few games that are utter garbage even though tons of time and money were spent on them (and movies as well, by the way). That doesn't mean that people should spend $50 or $60 to purchase crappy games.

Of course supply and demand are the major factors in determining the price, and of course developers should try to charge as much as the market is willing to pay. However, sometimes that strategy will not be the most lucrative in the long run. If purchasers figure out that developers will cut the price within a short period of time (and, with the case of the iPhone apps, they have), those purchasers will wait to purchase, and the developer will stand to lose more money than if he/she had charged a lower price to begin with. In addition, if developers wait too long to cut prices, another "next best app" may come along, and purchasers may decide to purchase that app instead, leaving the developer with a great app that fewer purchasers are willing to purchase. I respect developers, and I understand that this is a difficult business.

I am not a big gamer, but I like to play some games. For nostalgic reasons, I purchased Pac-Man and Frogger when they first came out for $10 each, and I don't even have either of those apps on my phone! I played each game two or three times. After that experience, I decided not to buy games at such a high price (or what I deem to be a high price). And, it seems like many other people have done the same, as developers are cutting prices left and right. And I am confident that they are still making a profit. I am not saying that ALL of them are making a profit, but many of them are doing so. arn, the problem with developers charging as much as they can is that they can become perceived as being greedy, and that will not help their pocket in the long run. Also, as has been seen with iPhone apps, if prices are perceived to be too high, hackers will hack those apps, and developers will end up losing a lot of possible revenues due to the fact that the apps are being distributed for free. I support developers and will continue to do so; I just hope that prices on apps don't become excessive because it will be a lose-lose situation.

Also, I wish that these companies would quit it with the $0.99 baloney. If an app costs $10, say that it costs $10 and not $9.99! Most iPhone users are not morons and won't be swayed into buying something because it's $0.01 cheaper (or I hope not). These pricing schemes are totally moronic. I know that it's Apple's policy, but I think that it's truly idiotic.
09-16-2008, 09:46 PM
#8
Joined: Aug 2008
Posts: 135
Quote:
Originally Posted by vandy1997 View Post
Also, as has been seen with iPhone apps, if prices are perceived to be too high, hackers will hack those apps, and developers will end up losing a lot of possible revenues due to the fact that the apps are being distributed for free. I support developers and will continue to do so; I just hope that prices on apps don't become excessive because it will be a lose-lose situation.
This is the exact reason why "Lite" and "Free" versions have been so rampant in the store. If people enjoy the lite/free versions, then they're going to fork over to play the rest of the game (which I have done on a few occasions already).

Developers know that with the iPhone platform as it stands now, people can't preview or even read reviews of a game for themselves until it actually hits the store thus determining if the $9.99 (or whatever price) tag is worth it. Yeah, there's YouTube previews, but half the time those are shite anyway.

As far as the apps being hacked and distributed for free, it would be intersting to know the ratio of legit to jailbroken iphones in order to actually install them to begin with.

I must admit, this makes for great conversation! We're completely in it's infancy, and can only imagine the possibilities of this platform and where developers are willing to take it (and invest in it). Will Apple open things up a bit for developer previews and whatnot where we see games being reviewed in the March edition of "iPhone Gaming" magazine before their May release date? Only time will tell I suppose.

dlogik
09-16-2008, 10:12 PM
#9
Joined: Aug 2008
Location: Tokyo, Japan
Posts: 353
Quote:
Originally Posted by dlogik View Post
If John Carmack's rumored iPhone game in the works is stellar and iD decides it's going to be the first $19.99 iPhone game, I'll be the first to click on it!
Not me. Looking at the $270 I've spent so far in the App Store, those purchases are now worth less than $200, due to price cuts. And when I went through my Mobile Applications folder last night and deleted 650MB of outdated apps, I realized that I've been paying through the nose to be a beta tester. Some of my games have had SEVEN releases already. SEVEN, in less than two months. That's just asinine.

I don't want to pay to beta test anymore. Developers regularly release incomplete, WIP games because they know how easy it is to release updates. And paying launch day prices (for these incomplete apps) is just silly, because time and time again we see app prices getting slashed within days or weeks.

As has been said, it's all about what people are willing to pay. I know that most mobile phone games/apps cost under $5, and I know that iPod games also cost about $5 or less. Why should I pay more, when my iPhone is just that - a phone and an iPod? I realize that Apple is trying to position the iPhone as more of a mobile computer now, but it still lacks the RAM and the battery life to be much more than a souped-up phone, IMO. So, paying $10 for an incomplete, beta version, mobile phone/iPod application whose price will be slashed in a few weeks anyway sounds pretty stupid to me.

But that's just my opinion.
09-16-2008, 10:13 PM
#10
Joined: Sep 2008
Posts: 294
Quote:
Originally Posted by vandy1997 View Post
Also, I wish that these companies would quit it with the $0.99 baloney. If an app costs $10.00, say that it costs $10 and not $9.99! Most iPhone users are not morons and won't be swayed into buying something because it's $0.01 cheaper (or I hope not). These pricing schemes are totally moronic. I know that it's Apple's policy, but I think that it's truly idiotic.
The pricing schemes are by tier. Meaning! Apple has a sort of table where in when you submit your paid app you choose a "Tier" the devs can't randomly type a price of $1.33.

Example.

Tier----Customer Price----Net Commision
1-------$0.99---------------$0.70
2-------$1.99---------------$1.40
3-------$2.99---------------$2.10
85------$999.99------------$700.00

They know that iPhone users are not morons. It just looks better at $9.99 than $10, that's marketing 101. You said it yourself you're not a moron so you should know the difference. Stop whining LOL this pricing strategy has been done for ages.

Last edited by dudehuge; 09-16-2008 at 10:25 PM.