iTunes App Store Pricing Decisions

[MacRumors]

http://www.macrumors.com/images/macrumorsthreadlogo.gif (http://www.macrumors.com)

As we approach WWDC, one big question looming with both developers and customers is how much the apps will cost. Inventive's (http://inventive.us/) John Casasanta has said (http://www.macworld.com/article/133783/2008/06/wwdcdevs.html?lsrc=top_1) that he wants to "get a feel for the market" and "one of the issues I have is pricing because there is no precedent set."

Apple is reportedly assigning development partners (http://www.appleinsider.com/articles/08/06/06/apple_pushing_iphone_developers_to_charge_for_would_be_free_apps.html) to official iPhone developers to guide them in application plans and is gently suggesting that developers consider placing a price tag on their software "at some point". Developers will be able to create multiple versions of their applications for inclusion, such as a Lite and Pro versions.

So far, we are aware of three developers who have announced very reasonable pricing for their iPhone games: Amborsia's Aki Mobile Mahjong ($9.99) (http://toucharcade.com/2008/06/06/ambrosia-softwares-aki-mobile-mahjong-for-iphone/), Fiery Ferret's Lumen ($5) (http://toucharcade.com/2008/06/05/lumen-a-laser-puzzle-game/), and Demiforce's Trism ($4.99) (http://toucharcade.com/2008/06/03/a-second-look-at-demiforces-trism/).

Meanwhile, in an interview with PocketGamer.biz (http://www.pocketgamer.biz/r/PG.Biz/LemonQuest+news/news.asp?c=7138) Spanish developer LemonQuest believes that the iTunes App Store will tolerate higher prices:Cavero accepts that developing games for the iPhone and other new mobile platforms will be more costly and time-consuming, but says that higher prices will balance out these costs.



Article Link (http://www.macrumors.com/iphone/2008/06/06/itunes-app-store-pricing-decisions/)

[Telp]

I don't like the line in there about them pushing people to put a price tag on there products. I really hope theres enough free apps that will be worthy. There is on the computer, and you know you can sell most apps you get for free on the computer, so hopefully it will be the same deal on the iPhone.

[stevehp]

I really hope the prices are controlled somewhat...If 90% of the solid apps are $9.99 plus, there will be significant resistant from non-hardcore end users.

I honestly think $1.99-$4.99 should be the threshold for basic apps...

[bacaramac]

I want to see some hardcore games. I hope there are not a million puzzle games. I want race, football, etc. I hope EA or the bigger companies step up and launch some PSP like quality games.

EDIT: Need for Speed, Madden. It can be done. Think playing football and tilting iPhone to move and touching to throw ball, etc. You get the point.

[rolex54]

i think $2-$5 is a good range for these apps. If every app is $10-$15 than I am not even gonna bother...

[Rocketman]

A developer of a "general interest" app should charge a very low entry price ($9.99 ish) and state in advance that upgrades and feature rich versions will be at a higher price, so customers know in advance what to expect. It will encourage sampling of the basic functional app for low end users. It sounds like the iPhone will be so pervasive there will be a booming market for 3rd party localization of single language app developers!

Rocketman

Your base are belong to us!

[kuebby]

A developer of a "general interest" app should charge a very low entry price ($9.99 ish) and state in advance that upgrades and feature rich versions will be at a higher price, so customers know in advance what to expect. It will encourage sampling of the basic functional app for low end users. It sounds like the iPhone will be so pervasive there will be a booming market for 3rd party localization of single language app developers!

Rocketman

Your base are belong to us!

Still too expensive to begin with. For a basic app that I can only use on my phone, and isn't 'professional' (ie Quicken to-go, Office to-go, etc) I don't think I'll really spend more than $5.

[DiamondMac]

I don't plan on buying any apps right off the bat. I will want to see how people react to certain apps and to see whether people feel they got their money's worth on others

If you all don't want to pay for an app, don't buy it

The strongest way people can get the point across that the price is too high is low sales

Apple will list and adapt to how the sales are in the first few weeks, imo

[samab]

Top end cell phone games cost $12 in the US.

http://www.mobilemag.com/content/100/345/C14122/

So I won't be surprised if they charge $15-18 for top end iphone games.

[aerospace]

I really don't care the cost as some apps will only do 1 thing while others would be whole programs like office.

My biggest concern will be will there be free trail periods so you can see if you like the app and its worth the money. If every app comes with 24 hour free trial period that would be really helpful. I'm certainly not spending even $5 on an app that may blow chunks so to speak but $50 for something really revolutionary would be just fine.

[JMax1]

Cavero accepts that developing games for the iPhone and other new mobile platforms will be more costly and time-consuming, but says that higher prices will balance out these costs.

So if there are maybe 5 million iPhones out there (can someone back me up on that? Not totally sure), how much can a decent developer make? Let's do some math (just estimates, k?). So say:

-Maybe a "good" app means 1 million people buy it at $5 a pop: $5 million easy. Not bad. That could fund a team of developers, do some advertising, blah blah
-Say 5 hundred thousand buy, that's still 2.5 mil.
-Cut that down some more, 100,000 is a cool half million.
-If you're a hobbyist and get a few thousand (5,000), that's still $25,000 for a hobby.

Okay, if you charge $10 for an app, everything above doubles. :eek: And let's not forget all the iTouchers out there.

Not sure what it costs to make a game, but I'd say it would be possible to make some good money.... I think the market is there and they shouldn't need (different from want) to charge too much for a simple app. But then again, I'm a musician and don't really know anything about business or programming. Although I do think it was smart that they told us about an app store a long time ago to get us used to the idea of paying for the apps.

[vandy1997]

$9.99 for Mahjong is too much. It is nothing out of the ordinary. $5.00 is the max for these types of apps. I understand that developers charge more for games for other phones because either the carrier or 3rd party distributors (like Handango) take quite a bit of a cut. In this case, Apple is taking 30%, which seems reasonable. If these developers start getting greedy, they will sell very little, and will not see the profits that they were expecting. They will be blackballed for trying to rip people off. If these developers charge high prices, users will not buy until the product is sold at a discount of 30% to 50% off. You will get the same problems as with Handango - most people will not buy until they see a sale. If developers charge $5.00 to begin with, they will fare much better. I am in business an an MBA, and I know that a high price point will end up hurting you in the end. These developers can get repeat purchases by limiting the app to a specific phone (which I hope that they won't do because people will riot) or limit it to one version with upgrades until another version comes along. As an example, limit the price to version 1.x (with upgrades). When version 2.0 comes along, current users can upgrade for 1/2 price of $2.50. Also, the Mahjong developers can charge for new levels. Be creative, guys. Just don't rip people off! This is a new platform, and you want people to by and use your app so that they will get to enjoy it and buy another app that you create!! If prices are too high, you get people cracking your apps, and you will definitely lose out in the end. $5.00 max - trust me. Users will be happy, and you will be happy in the long run. Ambrosia is greedy. The developers of Lumens and Trism have gotten it right. That is my opinion, and I'm sticking to it.

[JBaker122586]

$10 for Mahjong?
The same Mahjong that anyone can play for free online or download for free?

Surely that developer is kidding themselves...
It won't be long until another dev undercuts them by quite a bit.

[vandy1997]

No - this version "elegantly blends the ancient Chinese game of Mahjong with an enchanting journey across Japan" - whatever that means! Definitely not a $10 game. People will just wait and buy the $5 version from somebody else. You can get it on a jailbroken iPhone for free, and I haven't even downloaded it for free!! Developers - read this, please - no more than $5 for any game app.

[pomus]

honestly, I feel like if they are selling the iPhone capabilities short. In other words, the specs on the iPhone are superior than on the PSP.

What I would love to see is a game like Final Fantasy, or more console-like games instead of el-cheapos crippled mobile games. Here's to hoping. ;)

[JBaker122586]

honestly, I feel like if they are selling the iPhone capabilities short. In other words, the specs on the iPhone are superior than on the PSP.

What I would love to see is a game like Final Fantasy, or more console-like games instead of el-cheapos crippled mobile games. Here's to hoping. ;)

I think we will see that. With the SDK and App Store though, developers are able to make a lot of lower quality or simpler games. Developers that would never have gotten a chance to make a PSP game and have it distributed to millions of people have a cheap, easy way to do it on the iPhone. Therefore, we're going to see a lot of developers pumping out a lot of games in addition to the high quality games you're used to from some top software creators.

[Applepi]

Agreed. If basic apps are between $2-$5, I myself will be snatching up a few for my needs. I refuse to pay over $10 unless it's something I absolutely cannot live without.

[B. Hunter]

They have the current iPod game structure pricing to work from. Heck I would put Monopoly on my Touch.
But the iPhone & Touch are a step up.
My guess is games will be priced from $4.99-$7.99. Some could perhaps be even more.
Applications, not sure. Some could be free. Prices: $4.99-$15.99?

[stagi]

for an average app or game I think 3-5 is resonable (and what I would pay) more than that I have to really think about it.

[batchtaster]

While the development costs of iPhone apps may be higher, this should certainly be offset by the higher number of iPhone users. iPhone has 20% (and growing) of the smart-phone market, at Steve's last presentation, which is a larger market than computers/Macs.

I don't buy (no pun intended) that prices should need to absorb a higher cost of development, considering the potential audience is so much larger than the Mac market. Granted, not everyone who owns an iPhone will be installing apps (there will be a percentage who never install or need anything beyond the built-in apps), but the number of potential users is so much higher, and there's a heap of countries that haven't even picked it up yet.

Particularly in the early days when the number of apps will initially be small, developers who arrive at the party early will have little to no competition, people will clamour to try out apps for the thrill of extending the functionality of their device (no needle-in-a-haystack situation), and savvy developers may be able to establish themselves as the de-facto standard in whatever their app does.

[soLoredd]

At this point, all I'm ready to commit to is a version of Taber's Medical Encyclopedia or a Drug Guide Book. I bought both for $50 each on my Palm and since moving to the iPhone I have been dying for both of these apps.

That's the thing though. I won't spend more than $10 for a game (and it better be something fantastic, not just mahjong or solitaire) but I'm willing to spend upwards of $50 for the medical apps. We'll see what happens but I have a feeling, early on, prices will be higher just because people have been waiting for it.

[Zwhaler]

I dont think i will buy any Apps, Id rather just jailbreak :D

[Shagrat]

I dont think i will buy any Apps, Id rather just jailbreak :D

Wow, times must be hard over there if 5$-10$ is considered too expensive for an app. Obviously it depends on how useful/well coded/much fun etc. the apps that will be released will be, it still seems that a number of people just want everything for next to nothing.

Glad I'm not a developer!

[bc008]

^^ they do have to realize though, about 80% of the ipod touch and iphone community has jailbroken their devices, so they are going to have to compete with a lot of popular games.

that being said, 1.99 - 4.99 should be the max, although i know it wont.

[bigjohn]

i hate to be a bitch on this, but i don't see the point of having to buy a piece of software for my mbp and then turn around and buy it again for the iphone. am i wrong? aren't the two programs virtually the same? developers would make alot more ground in the long run by packaging both versions together or offering iphone versions free to existing users.

also, how long until therei's a macheist for iphone apps?

[Delta608]

I just want good reception, Ill play games on my Xbox and puter....:cool:

[sgibson]

Has there been any indication if you're buying the app for the phone or for the user? If I buy a really outstanding app that costs a serious amount of cash for a mobile app (£10-£15 or $20-$30) and then upgrade to iPhone II, will I need to repurchase that app, or will my iTunes/AppStore account transfer to the new phone and deauthorise my old phone for that app. I know Jobs said that the App Store would be able to push updates to apps you have bought, but is this on the basis of the phone checking for updates, or your account.

This is particuarly relevant when Jobs also said there would be the ability to side load apps from iTunes as well as over the air.

Personally, I would hope it is a user license the way basically all PC apps are, but my previous experience with smartphone applications suggests it will be tied to the hardware. Will Apple get this right from the get go?

[corywoolf]

^^ they do have to realize though, about 80% of the ipod touch and iphone community has jailbroken their devices, so they are going to have to compete with a lot of popular games.

that being said, 1.99 - 4.99 should be the max, although i know it wont.

Where did you get that number? I highly doubt that eight out of every ten iPhone/ iPod Touch users have Jailbroken their device. Probably more like 1/100 (maybe even less) have Jailbroken or unlocked their device. A lot of people buy these devices as a fashion statement and just to have the latest/greatest gadget.

i hate to be a bitch on this, but i don't see the point of having to buy a piece of software for my mbp and then turn around and buy it again for the iphone. am i wrong? aren't the two programs virtually the same? developers would make alot more ground in the long run by packaging both versions together or offering iphone versions free to existing users.

also, how long until therei's a macheist for iphone apps?

It's a nice idea to have an optional combo deal for apps that are on both versions of OS X. Although there is no real motivation for developers to invest thousands in developing a mobile version of the software if it were going to be given away for free. Maybe somewhere down the road things will go that way though. As much as Apple has tried to fool us into thinking they are the same OS, they clearly aren't in terms of usability. The interface needs a complete overhaul in order to make it simple to use on such a small screen as the iPhones. Add to that the different features that are/ aren't supported on both platforms and you can clearly see that a lot of time and money must go into porting most apps to the iPhone. I like your idea, it just doesn't seem realistic to give away most apps for free when there is money to be made. But I am sure there will be a few rebel developers that see the big picture and give away iPhone versions with the purchase of a Mac license.

[Niiro13]

I don't like the line in there about them pushing people to put a price tag on there products. I really hope theres enough free apps that will be worthy. There is on the computer, and you know you can sell most apps you get for free on the computer, so hopefully it will be the same deal on the iPhone.

You're lucky you're getting free applications at all.

Even the simple applications (solitaire, etc.) for phones cost money.

[DoctorLee]

Obviously, for those of us actually developing iPhone applications (we will have at least two health related aps ready day 1) pricing is not just simply a matter of how much we can make. The real issue is "How much do we need to make" and that takes into account not just developmental costs and a desire for reasonable profit, but also setting prices that allow for new development and ongoing support.

It seems that much of the conversation here is gamer in nature, but we believe that the vast majority of iPhone users will be looking for aps that enhance life, business, personal communication and yes entertainment.

Our expectation is that we will be in the 8 - 15 dollar range on aps that relate to such serious health issues as high blood pressure and obesity (all updates free of charge forever).

I would be most interested in hear from this community your thoughts on such a pricing plan.

Cheers

[mavis]

Our expectation is that we will be in the 8 - 15 dollar range on aps that relate to such serious health issues as high blood pressure and obesity (all updates free of charge forever).

I would be most interested in hear from this community your thoughts on such a pricing plan.

Cheers
Sounds reasonable to me - personally though, I won't pay over $15 for ANYTHING that isn't unbelievably cool. In fact, I'd hesitate to pay more than $10 for an app. I think $5 is going to be the magic number for a lot of people, especially younger customers. ;)

[twoodcc]

i'm more interested in the free apps

[Telp]

i'm more interested in the free apps

Me too. In fact, those will be the only ones i'll be looking for. Not that I don't think developers shouldn't be charging, but I don't have the budget to be able to buy apps.

[mavis]

i'm more interested in the free appsHmm ... I would agree with that except that so far, there really are no 'must have' games or apps for the Touch/iPhone, aside from maybe MobileScrobbler and RagingThunder (IMO) ... Both of those apps are cool/useful enough that I'd be more than willing to pay a few bucks for them. But I guess my point is, you get what you pay for. I'm hoping that the possibility of making some coin from their games and apps will encourage developers to really impress us with some cool, 'must have' stuff. Because so far, the free apps are 99% unpolished, unfinished betas (not that I'm complaining - they're free!!) :D

[sgibson]

At the minute there are very few things I miss from the iPhone.

I would want notes/tasks that sync with the Mac, and I expect Apple to provide those for free. If they don't I would pay a nominal charge - maybe $5 max. Really good Twitter and Pownce clients and Twitterific has already said they will have an iPhone app available at the launch of the AppStore.

Not really interested in games, but would download if free.

[bridgeyman]

Hey,

I am the developer of Lumen. It was just a side project I worked on after school. I am charging $5 just to see how it goes. At first, the desktop version of Lumen was a free game, but when I saw how many people downloaded it I added some new features as a paid upgrade, keeping all of the original game features free. I can't say I am going to retire (or even get through school) with the profits off the upgrade, but it has definitely made developing Lumen worthwhile. I am hoping to have the same results with Lumen for the iPhone (not that I would mind becoming filthy rich, I just don't think it will happen). That being said, is $5 a fair price point? I thought it was pretty cheap. How many copies of do you think I can sell? (Your guess is as good as mine!)

One thing that is frustrating for me is the lack of details on the iPhone App store. Will I be able to offer discounts to people who have purchased Lumen for the desktop? Can I shoot my friend a free copy of my own app? What about a free trial? Hopefully more will be revealed tomorrow.


TTFN
Bridger Maxwell

[sgibson]

Well, as someone in the UK, $5 is about £2.50, which really is pocket change, over here you could just about buy a Big Mac for that, so if the game is even slightly addictive enough to want to play it would be a no brainer, especially since you'll have your iTunes account info stored so it wouldn't even take effort to purchase, which is pretty compelling.

[ZiggyPastorius]

Well, as someone in the UK, $5 is about £2.50, which really is pocket change, over here you could just about buy a Big Mac for that, so if the game is even slightly addictive enough to want to play it would be a no brainer, especially since you'll have your iTunes account info stored so it wouldn't even take effort to purchase, which is pretty compelling.

Not to get off topic, but, goddamn! Our dollar must really be hurting if $5 of our money equals one big mac in the UK. ._.;

[Zubin]

Apple is smart. By putting a price on the apps they are sorting out the crappy apps and making sure that the applications on the store will be the developers best efforts.

[B. Hunter]

Obviously, for those of us actually developing iPhone applications (we will have at least two health related aps ready day 1) pricing is not just simply a matter of how much we can make. The real issue is "How much do we need to make" and that takes into account not just developmental costs and a desire for reasonable profit, but also setting prices that allow for new development and ongoing support.

It seems that much of the conversation here is gamer in nature, but we believe that the vast majority of iPhone users will be looking for aps that enhance life, business, personal communication and yes entertainment.

Our expectation is that we will be in the 8 - 15 dollar range on aps that relate to such serious health issues as high blood pressure and obesity (all updates free of charge forever).

I would be most interested in hear from this community your thoughts on such a pricing plan.

Cheers

There is so much potential for medical apps. One day I could see them covered by insurance. I don't think that is out of the question. Imagine hospital groups and medical providers with staff dedicated to patients using Phone/Touch medical apps.

Pricing medical apps at or above games is not out of the question.

[hayesk]

I think the iPhone apps should be priced based on the cost to develop them and the utility they provide. If something saves you several hours of work per month in your business, why should it cost only $10? Why not $100 if you get your money's worth in less than one month?

Now that may be an extreme example, but I don't understand the mentality that just because the physical size and price of the iPhone is small relative to a desktop computer, then the software should also be.

FYI, no, I don't have an app to release and want more money.

[iStefmac]

I will certainly not be buying any apps over $2.

The potential for massive distribution at a low price should be excercised without gouging iPhone users. $0.15 to $0.99 apps have the potential to make millions for developers. No reason to exceed that.

Installer.app has been a good indicator of how what seems like a useful app may not actually be worth downloading even if free. People are going to clash with the app store right off the bat if terrible apps are listed for $x.xx

[Shasterball]

If the program is good/useful, I'll pay a good amount for it. If not, then even $1 won't be worthwhile. I hope Apple doesn't limit the price to be charged -- that would lower incentive. Let the consumer decide how much to pay.

[universalis]

Well, I sell an app that costs $55 for a one-user licence. It's rather like the medical example, an e-book version of a several-thousand-page reference work, so people seem to think it's worth the money.

"One user" means that you can buy once and run anywhere. You can use the same app with the same registration code on your PC, your Mac, your laptop, your Windows Mobile device, and your Palm.

I'd like to be able to expand that last sentence to "and your iPod Touch and your iPhone".

The devil is in the detail. Suppose that the app is purchasable direct through me (for other platforms) and via iTunes (for iPhone/iTouch).


I can make the reg.code portable from iPhone/iTouch to the other platforms. If people buy via Apple, Apple get their 30% and I lose that 30%. For myself, I don't mind, but other application developers might.

I can also make the reg.code portable from the other platforms to iPhone/iTouch, by selling for $0 a "needs reg.code" version via iTunes. That way people will never have to buy twice.

This would be right and just and reasonable.

BUT - there then seems nothing to stop me from selling the registered app for $55 via iTunes and for $45 directly. Everyone will buy directly from me because it's cheaper, and I'll get $45 per sale instead of $38.50 per sale. Apple will get $0 per sale instead of $16.50 per sale.

I wouldn't be interested in trying to be clever like this, but other vendors might, and Apple has to stop it happening.

I can't see any way that Apple can stop this happening without forcing customers to "buy twice", once for iPhone/iTouch and once for everything else (including Mac!).

Does anyone else have any ideas how it might be done?

[teme]

I think 4.99e is a nice price for current iPod games, and I hope that small and simple iPhone games will be priced 4.99e too. However, I'm ready to pay more than that if the game is comparable to DS and PSP games. Super Monkey Ball at 9.99e is very reasonable, because it was full price release for DS and PSP (about 30-40e). The more complicated iPhone games can be compared to DS and PSP games, and I'm ready to accept that the prices are similar too.

The application pricing is more difficult to think. Lower prices (5-10e) may tease me to test and buy more applications. Buying a higher price release (above 10e) needs more thinking before buying. If I really need and want some app, I could pay as much as 40e for it (for example fully featured sport app to track run workouts with GPS & keeping history data and other features).

[syndalis]

Meanwhile, I expect ePocrates to still be at least 99 bucks a year, and totally worth it.

There are mobile apps worth huge money. If someone made an exchange capable tasks viewer, I would pay up to 20 bucks for the functionality. As it is, I am flabbergasted that there isn;t a "tasks" app at launch.

[Small White Car]

Nintendo DS games sell for $25-$35. It seems like every kid I see is playing one of those things.

I'm amused by everyone who thinks anything over $9.99 is going to fail. :p