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.
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.
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.
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.
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 twitter, send 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.