iCombat

As I think about a price for my new app the question I keep struggling with is just how exactly does pricing affect user buying patterns.  Apple’s frictionless purchasing process, where the vast majority of app store users already have a credit card on file, allows for painless one quick purchasing and has quickly made $1 dollar the new free.  The question becomes though, where is it that the user begins to think twice?  $2, $3 or maybe $5?  From my point of view there seem to be 5 major types of application in the App store right now that make embody the current pricing trends:

1. “Crapware” – cheap to make in terms of time and resources.  Targeted by both experienced and inexperienced developers.  Business model is either ad supported or sell for $0.99.
2. Full fledged apps by amateur developers – more elaborate design and execution by part time developers.  Attempting to create a full game experience with iShoot and Trism being good examples.  Business model is pay model with prices between the $1 and $5 range.
3. Full apps by funded start-ups – professional developers focused on higher quality games.  Here we have iBowl by the Social Gaming Network for example.  Quality of applications is high, business model is anything under the sun (to see one of the more creative examples check out Toy Bot’s $10k giveaway marketing strategy)
4. Professionally produced games – major studios like Sega or EA using teams of developers to leverage the iPhone platform.  Business model is selling games for $5+, probably closer to $10.  A good example is Spore. Read more…

I started thinking today about where to price my app and I was reminded of a great article I came across in Apple Insider several weeks ago.  The article is an interview with the developer behind Sound Grenade and it describes the rise of what he calls “crapware” in the app store.  Developed in 20 minutes and containing “maybe 10 lines of code,” Sound Grenade has been in the top 100 free apps for weeks generating over $200/hour in ad revenue.  Applications like iFart or Mood Phone fit in to this category as well, simple apps that leverage the platform to spread virally amongst what is probably mostly high school and college kids.  And these gimmicky apps have done so well that it is hard not to take notice and tempt all of us to consider banging some out as well.

The question “crapware” apps raise for the app store are obvious, why would developers and businesses spend weeks and months and maybe tens of thousands of dollars to build an application that is competing with one trick apps that sell for free?  Surely pricing pressure and excess supply will send the entire app store to the ad supported or near free pricing points.  Well I disagree and am not too concerned that this will happen.  There may be 75 versions of flatulence apps and I already found about 10 copying Sound Grenade but I don’t think that this will last for very long. Read more…