iTunes App Store Pricing Decisions

[MacRumors]

As we approach WWDC, one big question looming with both developers and customers is how much the apps will cost. Inventive's John Casasanta has said 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 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), Fiery Ferret's Lumen ($5), and Demiforce's Trism ($4.99).

Meanwhile, in an interview with PocketGamer.biz 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.

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[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. 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]

why the limitations?

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]

Pricing

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

 

[Shagrat]

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

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?