As the iPhone and smart phones get more and more popular and casual games that are priced at impulse buy prices get more and more popular, it's actually taking a HUGE toll on the traditional console game market. Nintendo is currently hemorrhaging money, as is Sony. Microsoft is hanging on thanks to big games like Halo, but their profits are way lower. The pendulum is shifting towards .99 apps and indie developers, and I think it is awesome. We have a chance now to get into a market that was all but impossible to break into before. Once the dust settles and the truly successful new indie developers start making names for themselves (chillingo, ngmoco, etc) I think we'll see the prices raise a bit on their titles since you know you are buying a quality product with a brand behind it. For example, I bought Galaxy On Fire II without a second thought and dropped a cool $6.99 because I knew I was getting a quality game. But the fact is- 'impulse buy' pricing works in the gaming market. So can Free to Play, which goes against all traditional ways of thinking. And since the development costs for an iPhone game are next to nothing when compared to a traditional game, the profit margins are tremendous Embrace the new wave of gaming! Build a brand now and make a name for yourself with quality, cheap games, and when the dust settles you'll find yourself sitting very comfortably. That's my plan at least.
Well put! It's just a matter of being able to afford to stay alive in the meantime :S I had written up a long-winded response (shoking, I know!) about how iPhone is still stigmatized as "this new market, not traditional gaming like DS etc" but you are right.. the winds of change are blowing, and there's a lot of talk about how the traditional market structure can not sustain. You see big companies like EA and Activision truly suffering for it, they look "fine" now but pay attention to how they've been operating and it's absolutely panic mode. Layoffs, big corporate reshuffles, investing in/dissolution of huge sub-studios and brands. You can only expect your customer base to buy so many $60 products each season, and as more triple-A titles are rolled onto the marketplace, more of them will have higher risk (and higher casualties). I think digital distribution will be a huge death knell of that in some years, there's going to be an enormous change in not only how everything is sold (DL versus physical), but also how it is priced. Fighting to figure this out now is absolutely critical.
On the crowdes app store + $1000/yr fee topic: I don't know but I don't see it as a problem that there are 80 gazillions of apps in the store. The main problem in my eyes is that it's a real PITA to navigate through the store. On the iPhone usually I don't go past page 2. On the desktop iTunes store I am mostly so annoyed by the long loading times that I don't brows the store at all. The app store is like the biggest Wall-Mart on the planet where you could buy everything from socks to space shuttles. But there's only a small corridor from the entrance to the checkout and the customers only see a minuscule percentage of the goods.
Actually, the "Supply and Demand" part of what I was referring to is to the iPhone and the price they can charge versus what their competitors like Blackberry, Nokia. As far as the digital copies you are correct in regards to software being limitless but what I am referring to is the sheer amount of games and clones out there that will drive prices down as well. I am not actually referring to the physical copies of the games. For example, when the very first Tower defense game on the iPhone came out there was no competition in that genre so it could theoretically charge whatever the developer wanted based on what the developer estimated as a fair value. As more and more similar tower defense games came out the supply of Tower defense games grew and so this will drive down your prices as well. Basically, every competitor that brings a product to the market increases the "supply". Anyway, I am not an economist so please forgive my slapdash attempt at explaining the economics of games.
