How To Price Your Game

For this week’s iDevBlogADay post, I’m going to give my thoughts and recommendations on game pricing. This is a something I skimmed in last week’s post, but it’s a highly requested topic, so I figured it was worth delving into. Both paid and freemium are valid strategies for making money the App Store, but I’m saving freemium games and IAP in general for a future post, so this one will only cover paid games.

Surgeon General’s Warning

I am not an expert on game pricing. I have absolutely no background in economics or any other kind of business-y stuff. Really, most of this is just guesswork and extrapolation from my own experiences with Trainyard and from what I’ve heard from other developers. If you lose a million dollars from following my advice, I’m sorry. On the other hand, if you make a million dollars, you owe me half ;)

An overabundance of apps

Apple enjoys telling us that there are more than 250,000 apps on the App Store, but the thing they don’t tell us is that 99% of those apps are awful. There is a serious ton of junk out there. The ridiculous goodness-to-crapness ratio means that anyone who is even slightly adventurous with their purchases is going to run into a lot of duds.

People love comparing the price of apps to all kinds of things, especially coffee, but here’s the thing: when you buy a coffee, you know you’re getting a coffee. When you buy something on the App Store, you really don’t know exactly what you’re going to get. Imagine you bought your coffee, only to open the lid and find it was only half-full, or that it wasn’t coffee, but lemonade. If only 1 in 5 cups of coffee you bought actually contained coffee, a $3.99 coffee price would suddenly seem pretty high.

It’s all about risk

$2.99 is not a lot to pay for a good game, *if* a user knows it’s a good game. The problem is that with every App Store purchase, there’s a very high likelihood that the user is going to get a bad game. Over time, most users will have come to know and accept this about the App Store, and they’ll perceive a certain risk for every purchase. They subconsciously weigh the cost of the game against the chance that they’re going to be ripped off.  We can use this knowledge to our advantage when we price our games, by figuring out the perceived risk.

Risk reduction

There are a number of factors that affect how risky a game seems to a user. The most obvious are ratings and reviews. Apple has put these in place to give users a good sense of what other users think about the game. They help, but unfortunately they can also be gamed and abused, so they’re not as useful as they could be.

Being featured by Apple does a huge amount to reduce the risk of a game, because it tells a user that the almighty Apple has decided the game is worthy of the featured apps list. It also increases the exposure of a game a huge amount, which is why it’s such an effective boon for sales.

The top charts are similar to being featured in that they also increase the exposure of your game, and being in the top charts tells potential users that lots of other users are buying your game, which means it’s probably not a dud.

Another great factor is having a solid brand. Having a well known brand helps immensely to legitimize your game. That brand could be a licensed property, like Skee-Ball, a company brand you’ve built up over time, or even a publisher, although I really discourage you from getting a publisher.

Mentions from friends are the ultimate risk-reducer. I consider this as anything from Twitter to blogs and especially actual word-of-mouth. If people the users actually trust recommend the game, then they *know* it’s not going to be awful.

There are dozens of other subtler factors that affect the risk of your game as well, including the quality of the icon, screenshots, and description. Using these well can increase the appeal of your game, but using them poorly can actually push potential users away.

Launch time

If you’re an indie developer, your game most likely won’t have anything but word-of-mouth and blog posts to go on at launch. Most users who get to the App Store ”buy page” for your app will have come there from a specific link or from typing your app’s name in the App Store search. A user who is looking for your specific app already knows exactly what they’re getting, so their perceived risk is minimal. What this means is that you can afford to price the app at a higher price, because they aren’t simply browsing.

At launch you should price your game at close to what it’s truly worth, but you still have consider the rest of the App Store market. Some games really are lifetime $0.99 games, and usually have fairly shallow, repetitive gameplay. As a completely arbitrary rule: if your game couldn’t have a substantial lite version without giving away the whole game, it’s probably a lifetime $0.99 game. Most other games deserve the premium $2.99 price point. Unless you’ve got a very established brand, anything above $2.99 is pretty much App Store suicide.

I originally launched Trainyard at $1.99, but looking back, I think that was a mistake. There’s very little difference between $1.99 and $2.99 to most users, and my sales stayed steady when I bumped the price of Trainyard up to $2.99 a few months after launch.

Keep in mind that these prices are for the iPhone and iPod Touch. I’ve never released a game for the iPad, but in general, it seems that iPad prices should be $1 higher than their iPhone equivalents.

Experiment

This is a very young and volatile market, so there are no absolute rules. Feel free to experiment with the price of your app every so often. Apple makes it incredibly easy to change the price as much as you want, although you should keep in mind that there’s usually around an hour long delay before it fully propagates through the App Store. One of the big things I hear some people worry about is whether they’re going to anger their current user base when they have a sale. Don’t worry! Most of your current users won’t even know you’re having a sale, and the ones that do usually won’t care.

Having a sale probably won’t rocket your app up the charts, but it’s a great reason to send an email around to your favourite blogs to drum up some more publicity. There are some apps, like Canabalt, that never go on sale, which becomes part of their “mystique”. I guess that’s fine if you want to be hardcore like that, but I really don’t see the point.

Push for the top

When your app gets featured by Apple, it’s time to start planning for a sale. I can only advise you to do what I did. Featuring only lasts a week, so your goal is to go as high in the charts as you can to extend your popularity well after the feature is over. That being said, I’d say wait a few days before you do the sale, because I think it only takes a couple days of being featured to max out your rank. Apps are always featured on Thursdays, and in my case, I waited till the Tuesday to do the sale, which was quite successful.

I know my situation was pretty much a perfect storm of dozens of factors all converging, but that doesn’t mean it couldn’t happen to you. Your circumstances could literally be once-in-a-lifetime, so you’ve got to take the chance when you get it. Even if you don’t hit the top 10 or even the top 100, your rank will still rise further than it would have at the higher price point, and therefore your descent should be slower. Feel free to raise the price back up when you’re off any of the major charts.

Wrapping up

I think that’s about it for my paid game pricing advice. There are a bunch of subtler things I didn’t cover because this post would have been a bajillion words long, but I think you probably get the gist. As usual, if you’ve got any comments or questions, please message me on twittersend me an email, or just post a comment.

One final note: I’m going to follow in the footsteps of Alex and Noel and make this my last iDevBlogADay post. The waiting list is getting way too long, and I’m so ridiculously busy right now that I really shouldn’t be spending as much time as I do writing these posts. That being said, I’ll keep writing stuff, so stick http://struct.ca/feed into your rss thingie.

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35 Responses to How To Price Your Game

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  2. You made an extraordinarily good point with the coffee/risk metaphor.

  3. Ross says:

    Thanks for the post – I’m hoping to release my first game early next year – very handy pricing tactics in there. Good information on the tactics of timing the sale to coincide with Apple’s promotion, but not too early on.

  4. Rourke McAllister says:

    You’ve obviously had some success with Trainyard and no doubt learned a lesson or two about pricing on that ride but what exactly do you feel qualifies you to write a post entitled “How To Price Your Game” based on one app and a few months of experience on the App Store? You’re a sharp guy and you raised some good points but your rhetoric comes across as a little pompous from someone who has yet to deliver even a second title to the App Store. Its like an 8-yr old whiz kid lecturing about life lessons.

    • Matt says:

      Looks like someone forgot to read the Surgeon General’s Warning ;)

      Let’s be clear, the App Store is not a black box where I can only tell how my own app performs. Apple makes it very easy to see not just how my app does, but how every other app on the store does because of the fact that rankings are public. I follow the rankings on a daily basis, carefully watching how each app’s price affects it’s ranking and user rating, among other things.

  5. Wally says:

    Excellent post!

    In addition to risk, I believe there’s also deflationary pressure on App Store pricing. Better and better apps come out as the platform matures. iShoot in today’s market would not do nearly as well with games like Worms on the platform. The longer the consumer holds on to his dollar, the better his purchase will be in the future. To encourage sales, developers drop the price to prompt a purchase now instead of tomorrow. We’re caught in a self reinforcing deflationary cycle much like Japan and the constant price cuts to spur consumer spending.

    We need our own Quantitative Easing. ;)

  6. Brandon says:

    Here’s how i decide if I’m going to get an app.
    First thing I look at is the icon, then the rating, then I usually
    Skim over the description, then I sometimes check
    The reviews.(usually only if the rating is 3 stars or less)

    So I think You should have a nice icon, have the most
    Important thing at the TOP of the description, and… Well make
    A good game. And I usually only buy games that are$2.99 or less.
    But most of this stuff is FALSE if it’s free.
    If it’s free I just mindlessly install it. :)

  7. Marco says:

    Interesting to hear the details of your success Matt, and thanks for posting about it.

    It seems that the timing of your lite version was a big part of your success, in addition to having a great title of course. When I first released my game I didn’t think a lite version was that important. I’ve since realised that unless you have a well known brand, the exposure a lite version can bring makes it unavoidable.

    So, I recently added a decent chunk of new free content to my game (waiting in apple submission), which makes it finally just big enough to warrant a free version, so that’s next on my list to experiment with. Although my Apple features have all been and gone so I’m not sure how much impact it’ll have.

    Had you every think about putting ad support in Trainyard express? After hearing about backflip studios’ success in this department, I’ve been toying with the idea.

  8. Thanks for that Matt. It is very pertinent as we are planning to submit our app Rogo next week. We had thought an opening sale price might be a good idea and then return to $1.99 as a standard price. So your comments have made us think a bit.
    We do have a quality app – Bruce, the programmer has done an amazing job, and the gameplay is outstanding. From our testing it seems to have a very wide appeal as well.
    Now if we can just get featured…

  9. JoeM says:

    One of the ad companies (forget the name they merged with some other company) got very similar findings on indie game pricing – those that where priced at 2.99 sold better then those at .99c, although free games volume out performed both of those. Of course they didn’t cover price strategies once you get featured and make the top ten.

    Pricing Trainyard at 2.99 also made me stop and consider purchasing the app which I may have over looked in the landfill of garbage. I was so use to seeing .99c and free everywhere that it caught my attention. All that came from seeing an ad on a game website. I hate ads normally, but when they work as intended I am happy to take a look. I may have never found Trainyard if it wasn’t for those techniques.

    Great post Matt. It covers a lot of good points to consider when launching and pricing.

    • Matt says:

      Great points. Free apps get downloaded almost 10x more than paid apps, no joke, so free is definitely something to consider if you want to reach a lot of people.

      I think you’re absolutely right about higher prices helping apps to stand out. It may seem weird, but I think having a higher price actually reduces the risk that the app is a dud.

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  11. Mike says:

    Great post Matt. Do you think there’s a point at which users are actually more likely to stop and look at an app which is more than $0.99, because the perceived value/gameplay they will get is higher?

    It’s slightly counter-intuitive, but has worked in other areas… take Red Bull as an example. Who would have considered paying $3 on a can of pop before they came along!?

    • Matt says:

      Absolutely! That’s actually something I was thinking about a couple days ago. Having a higher price actually reduces the chance that the game is going to be a dud, because higher priced games+apps are often more professional and offer more value. Not always, but usually.

      • I do agree with what you’re saying, but do you think not having a game at $0.99 will hurt your chances at being a top game? (i.e. Angry Birds, Flight Control, Doodle Jump, Cut the Rope…TrainYard :) )

        Great post btw, keep it going! (i’m lazy at blogging, so viewing your posts encourages me to post a blog post on my site :) )

        • Matt Rix says:

          Yep, it’ll hurt your chances if you’re in the top charts… but if someone has stumbled upon your game randomly, they may actually be more tempted to buy it *because* of the high price, due to the fact that it’s less likely to be a dud.

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  13. Hi, Matt. I liked your post a lot. Thank you for sharing your experience.

    I have question is: the price you’ve set to your game (be it $0,99, $2,99, what ever) won’t come in full to you. There are some discounts (Not only Apple gets 30% but there are credit card / billing operator taxes, maybe other discounts).

    At the very end, how many does a developer receive from the price paid by the users? 20%? 50%? 60%?

    Regards.

  14. That’s nice. I thougth that they first took out all expenses and later they got there 30%.

    Thanks.

  15. Ayyya says:

    Hi Matt, thanks for the great post. At the top of the post you recommended not going with a publisher. I was actually thinking of doing that because it would help in getting good exposure the way that Chillingo helped get exposure for Angry Birds. Why do you think that going with a publisher is a bad idea?

    • Matt says:

      Keep in mind that even Peter Vesterbacka of Rovio (creators of Angry Birds) said that you don’t need a publisher on the App Store: http://techcrunch.com/2010/10/20/angry-birds-chillingo/

      Angry Birds did well because it’s a fantastic game, not because of Chillingo. You could argue that Chillingo *accelerated* their success, but that’s about it. If you look at all the games that Chillingo publishes, most of them don’t do nearly as well, in fact, lots of them are flops… And keep in mind that they’re selective about the games they publish in the first place.

      The reason is that by far the best marketing for the App Store is stuff App Store itself, like ranks and featuring, not external factors like marketing/advertising, and certainly not things like press releases. The stuff publishers do is way less important because they have way less influence, and Apple has way more influence.

      Also, if you want to get into the game development business for the long term, you’re going to want to build a brand for your company, but if Chillingo publishes your game, most of the players are going to think Chillingo developed it as well.

  16. cbt says:

    Hi Matt,

    Your weekly posts was so inspiring and so much educational. Why did you stop posting them? Is something wrong? :)

    • Matt says:

      I’ve been busy finishing up work at my old job and starting up all this new company stuff. I’m planning to start writing posts again this Tuesday, so keep your eyes peeled :)

  17. Demian says:

    A bit late to this post but, anyway…
    I was thinking what would be the best price scheme for a game like Trainyard.
    My impression is that the game should be free (with no “free” version) with x levels and then in game purchases for level packs. I think in-game purchases are a big thing for developers (see the success of the Smurfs’ game, for example).
    There are games that don’t lend themselves for in-game purchases, but Trainyard is ideal. It also let you keep “expanding” it with new level packs, getting something in return.
    But I strongly believe in-app purchases should be cheap and really deliver in terms of quality and “yield” for your buck. A bad example of in-game purchases is Godfinger or the mentioned Smurfs’s games: purchases are pricey and what you get in return is not much.
    A wise developer that gives the app for free (with some content included) and offers cheap but loaded in-game purchases, could have, in my opinion, the best price scheme.

    • Matt says:

      Interesting thoughts, but a couple issues.

      First, by not having a paid app, you miss out on a whole bunch of users who only check paid charts. You also lose the chance to be in two charts at once (paid and free).

      The next problem is that most people just don’t pay for IAP content. The usual percentage is around 2% of users that actually buy stuff. The only way most freemium games do well is by milking those 2% (“whales”) for ridiculous amounts of money. That’s fine if you have a game like Smurf Village where you can have a “wheelbarrow of smurfberries” that costs $60 or whatever, but for Trainyard, the level packs would be $2 at most.

      I’d definitely love to start from scratch to see how many sales I could get, just to compare it, but there are a lot of issues with both approaches.

      • Demian says:

        Very interesting thoughts, specially the doble listing. Are IAPs really that low? I’ve only seen high priced ones, and thought that paying that much for “resources” was a pretty lame idea.
        As a customer I expect for IAPs to be on the affordable side always, and I’m pretty sure i’d spent more on IAPs if they were cheaper.
        Anyway, you’re one of the most generous developers I know with his free app. Even keeping the paid app, it would be great to have more levels available on the free app by paying a dollar more. Even if to get all the levels (free+paid levels) ends up being more expensive than paying for the full app (it would be like a payment plan, ha!) :)

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