Pricing Games

A little debate on App Store game pricing started today in the comments for a TouchArcade post on Solipskier.

One user stated his opinion:

“I’m not saying it’s a bad game, quite the contrary, I have only positive things to say. Just remember, it is not by any means worth $3. $1 would be the most appropriate.”

The classic response to this complaint is that “it costs you less than a good cup of coffee”. Let’s clear something up: comparing the price of physical goods to digital goods is pretty silly. Physical goods have reproduction costs, while digital goods don’t. What this means is that it’s ok to sell your game to lots of people for cheap if your total profit is still high. There seems to be a feeling that pricing games at $0.99 somehow cheapens the entire industry. I firmly believe that a $0.99 game is not a “worthless” game, it’s just a game with mass market appeal. This is the basis of Marco Arment’s “Two App Stores” theory.

I’ve heard it said that the App Store’s “race to the bottom” will ruin users’ perceptions of game prices. I really don’t think that’s true at all. For a long time there’s been a place with way lower prices on games: the web. The Flash version of Canabalt is completely free, and it’s identical to its iOS counterpart, yet that didn’t stop people from buying Canabalt on their iOS devices. The context of where you’re buying games matters. I wouldn’t think twice about buying a game for $15 on Steam, but I would never spend $15 on a game on the App Store. And don’t worry, indie games are still thriving elsewhere, despite low prices on iTunes, just take a look at the example of the Humble Indie Bundle.

$2.99 is not a ridiculous price for a game like Solipskier. I’m having a lot of fun with it, and I’m sure the developers put a lot of work and effort into the game. That being said, compared to other games at the $2.99 price point, like Plants vs Zombies, Chopper 2 and Osmos, the price starts to seem a tad high.  You could argue that Plants vs Zombies, Chopper 2 and Osmos are underpriced, but there are dozens more games out there just as good as them at that price. That’s my point: we’re dealing with a strange market where everything is underpriced. And if everything is underpriced, well, maybe we need to change our definition of what underpriced is.

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4 Responses to Pricing Games

  1. I somewhat agree with you. People should definitely pick quality over price, but a good amount of iOS users are young and they just won’t shell out the money to buy a game, even if it looks good. I understand that many apps are underpriced, but the App Store is a complicated market with many useless apps. It’s just like television, you have to go through all the trash to find the great Gems.

  2. Dad says:

    Often when a market is full of underpriced products this is because producers are running at a loss to gain market share. At some point prices go up as the number of players goes down via attrition due to unsustainable economics.

    The force currently working against this in the app store is the lottery effect of a few developers making lottery winning levels of revenue. This entices people to play without sustainable business models (i.e., very low prices).

    Someone with an economics education/background could probably say this better, but hopefully the rough idea is clear.

  3. Matt says:

    I think you’ve made some interesting observations. You’re probably right about developers abandoning the store, but I feel like there will always be more to take their places, at least for the next couple years. I think you’re spot on with the lottery idea, it really does give devs some motivation to keep trying, even if they’re losing money. Also this market has gotta be pretty unique in that the most underpriced products actually make more money, it’s not like Rovio is operating at a loss.

  4. Pingback: How To Price Your Game |

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