Price wars. Ridiculous or benneficial!!

Yeah but so many casual gamers will look at the price and say, "I remember when tons of games were 99 cents," and then decide not to buy the game because it's overpriced compared to before. They're not going to care that much about the games to buy them unless it's just a cheap thrill. The people who post on this site are in the minority, the majority of the iPhone user base could go on without games no problem if they feel they're overpriced.

Plus, that's not the way marketing works. Nobody could get ahead and draw more appeal to their game because they couldn't utilize one of the oldest and most successful tricks in the book: sales.

 

Firstly, the best selling paid apps of all time have only just past the 1M sales mark - 2M will be a long while yet.

As I stated in the Doom Res price discussion, selling your game for $.99 is not always very profitable. Take Flight Control, probably the best selling paid game ever, breaking the 1M mark not too long ago. I would assume its budget is pretty low as its a pretty simple (but very clever) game, that would have been developed pretty quickly by a small team of devs. So lets assume it cost $100K to do some maths.
Budget = $100,000
Sales = 1,000,000 @ $0.99 = $990,000
Apple's 30% Cut = $297,000
PROFIT = $593,000

Now the only other "premium" title I have numbers for is Super Monkey Ball. To be fair, I don't care that it was a launch game and the store was different back then as my focus is the numbers, the profit vs sales. Anyway it was a small, quick project for Sega, so we'll assume the same $100K budget.
Budget = $100,000
Sales = 300,000 @ $9.99 = $2,997,000
Apple's 30% Cut = $899,100
PROFIT = $1,997,100

There are 2 main things that these numbers show:
1) The $.99 price strategy will ONLY BE PROFITABLE FOR SMALL GAMES. Anything with a large budget is not feasible. As an example, lets say Doom Res was launched for $.99. Carmack has stated that it took about 9 months to develop, so lets say the budget was $400K. That means to break even they would need to sell 600K copies of the game or only a tenth of that at $9.99. If that budget was more like $1M, it might never make a profit at $.99!
2) Look at the amount of profit. SMB made 3 x the profit of FC. Why would any dev, whose spent a large amount of time and money of a game want to make $600K when they could make almost $2M?

The problem with pricing games at $.99 for a bigger, more resource hungry game is that profits are small, so therefore budgets will be low and therefore quality will take a dip. Why do we find so many unpolished games on the app store? Could it be that devs want to spend the bare minimum on a game in order to maximize profit margins? The other problem is that low profits will deter devs from the store as what's the point if your investment isn't going to be returned?

 

Its a phone with games, and I said console:

Now if i remember clearly, my iPod touch couldn't play ANY games when it came out.
Face it, the iDevice is a mobile phone with good games but certain things keep it from being a proper console, the main being the fact that its consumer base is probably 98% not gamers

EXACTAMUNDO!

In fact, most of the people I know only have the odd game, usually free on 59p, on their iTouch. My uncle has Championship Manager and nothing else, my sister has a whole page of free games, and that keeps her attention.
Honestly, if games were priced at what the anti 99p people wanted, I would never have made an account on this site.

 

The point is, if you sell your game for $5, you can sell 4x less to make the same money!

Also, at $5 you can gradually lower the price over time, to tempt more and more buyers.

 

How many indie devs successfully sell their game for five bucks? Only Gameloft, EA, ngmoco, etc. can sell games for that much and still sell as well as 99 cent games. The small guys need that 99 cent price tag because it's the cheap price that attracts the casual gamer.

Even though you can sell 5x less and still make the same amount of money, it's very unlikely you'd be even to sell 5x less as a small developer because your game probably wouldn't attract anybody looking for a cheap thrill.

 

Honest question. Isn't that considered price fixing? And isn't price fixing illegal in most instances in the US?


As for the question at hand. I think I'm kind of in the middle. I have no problem paying $10 for games I want. I have hundreds of games, ranging from free to $9.99. I generally get annoyed by all the promo code grubbing around here, but I think that's just a result of allowing promo codes in the forum, which I'm fine with. I'm not crazy about price whining, but I do think cost is a relevant piece of the discussion. Lately, I'm getting equally tired of hearing all the same old bullying tactics being used to mock price whiners. "It's the price of a cup of coffee", "It's only a dollar!" Yeah, we get it. My laptop cost as much as a TV. Going to the movies costs as much as a haircut. An ice cream cone costs as much as a magazine. Yes, for every purchase we don't make, we could purchase something else at an equivalent value. Got it. I understand where some of you are coming from. Whining or bitching about prices can be annoying to some us. But I don't think it's fair to belittle other people's buying decisions. A lot of you talk about how $0.99 apps are going to ruin the App Store. It seems like a major concern for many. However, the economics of the App Store might not matter to others. Let's face it. Some people have different budgets and different priorities. They might just want inexpensive games to play on their mobile devices. They might not have any need for the App Store to progress into some kind of "hardcore" gamer's paradise.

I visit this site everyday. I am interested in reading about and discovering new games. On average, I'd say that I buy at least one game a week. I bought The Sims when it first hit the App Store for $10. I bought Peggle at full price even though I didn't see the appeal of the web version -- I was curious and took the word of the members here. But I'll be honest. If the App Store were to close down tomorrow, I don't think I'd be all that upset. As much of a hobby as this is for me, there are other things to worry about than the state of mobile gaming. If people have their priorities in order and prefer inexpensive apps, then props to them. Who are any of us to judge the motivations of others? I know it's irritating for game lovers to see post after post complaining about prices when the easy thing to do would be to just not buy a game you don't want to pay for (then again, it's just as easy to not reply to price whiners, and that hasn't stopped too many of us). But there's nothing inherently wrong with these types of complaints.

I don't know. There seems to be this war between these two factions, but I can see the merit in both.

 

Real Racing Doom Need for Speed Tiger Woods FAST and AC are all in the top 100 list despite being $7-10 each.

So clearly the iPhone is a gaming device and devs are and will continue to make premium games for it.

Clearly millions of idevice owners don't mind buying high quality premium games and developers are making money enough that they feed a desire to do free additions and updates.

I do feel bad about the occassional stellar top notch game (quantum collapse) that doesn't sell well but it happens on all platforms.

 

The developers are not the ones causing the doom of the app store. Unless you have a big name behind you (something along the lines of EA) you can't put out a game at more then 99¢ because 'it isn't worth it.' Smaller developers have to price extremely low to get some sales. The odds of pulling a top 100 app are so poor. Charging $2.99 vs 99¢ really doesn't affect your chances of making the top 100, but that difference in pricing does affect (and greatly) your chances of making back your investment.

 

The appstore prices have always been smaller than full xbox/ps3 etc... games. But lately there have been serious drops in new games for consoles too. Like New games only a few months go cost €60. Now i can buy a new game for €45 and there are even some cheaper. So price drops in the apps market could happen too.

 

i never said that. Im saying that prices for everything are dropping. I never said anything about pricing games high. I only mention low. Plus fix your spelling

 

Actually, I'd argue a more closed model would be beneficial from a pricing standpoint. A way to close it more would be to actually charge for the cost of the SDK, and charge more up front for App Store upload/hosting fees.

Of course, that would have the detrimental effect of closing some talented but less financially able developers out, and might have the effect of increased hardware hacking for such devs.

 

Are you replying to what I said? If you are then you are getting my point wrong. I never said it wasn't a gaming device, i mean my calculator is a gaming device. I said it wasn't a CONSOLE. This is because they just aren't built for games and that is not what their main purpose is.
Also the iPhone doesn't even get close to the DS in game quality, same with the PSP.

 

While I can see your point, reread his post again, CDubby. He specifically stated "release at". Going by that statement the original release price point would be fixed above a certain threshold, but, periodically, one could lower price to have sales after release.

Of course, in such cases, there would have to be a requisite waiting period before the ability to lower price temporarily or permanently would be "opened up" for an individual app.

No. Not really.

Look at the video game home console and portable game system market. Prices are set at a certain amount for 3rd party publishers by the manufactures of said platforms.

 

And you're correct.

A mobile platform like iTouch/Phone isn't dedicated primarily to game software, thus it is not a game console/system. It is, however, a viable platform for games.

Again, as I always do, I point to the PC vs. video game home console comparison, which is largely the same. PCs are not video game systems despite the fact that they are a viable platform for games. PCs aren't built or designed to run one type of software above all else (in this case, games). Instead they are built to run a variety of different types of software. Moreover, the market for video game systems is video game consumers ONLY. One does not see many, if any, purchasers of Wii, PS3, 360, DS or PSP NOT buy games to supplement their hardware purchase. That's because those in the market for such things are in the market to play games. Not necessarily so with PCs, and not necessarily so with mobile platforms like iTouch/Phone.

Here is where I disagree if only for the fact that such a statement is completely subjective as opposed to the truly objective viewpoint in regards to whether or not it is a game system.

It can be factually stated that it isn't a game system (as it is not a dedicated device), and you (and I) have shown as such. But one cannot "prove" quality of the games compared to other platforms, as quality is dependent on individual tastes.

 

Man who cares. If they want to drop the price of their game, they can, it's their game. And y would u fight, say the u want the price to be higher. That just makes no sense to me. I'm not a cheap person, I own many high priced games from EA, Gameloft, etc. When I see a price drop thats a benefit. I don't like purposly throwing my money away on all these games.