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| April 9, 2009
App Store Insider: Mid-Priced Applications
With all of the fuss about 99 cent applications taking over the App Store, I have decided to take a different route and instead shine the spotlight on mid-priced applications. Yes, there are far fewer successful mid-priced applications, but how do you measure success? It's obvious that higher priced applications have a more difficult time getting into the top 100 paid applications because they cost more. The list is based on the amount of units sold, so it's a no brainer. I will be taking a look at a few choice mid-priced applications to see what has made them successful, and how developers can be sure that their mid-priced applications have a chance to succeed in the App Store. Is it their pricing scheme, user ratings, marketing, or just pure luck? I will also look at how many less units a developer would need to sell in order to equal the success of a less expensive application's success. What constitutes a successful mid-priced application? First off, we have to set the range for what a mid-priced application is. I am going to say everything between $3.99 and $5.99. Like I said earlier, 99 cent applications seem to get all of the attention and sometimes rightfully so. It isn't fair, however, when games like uber successful Rolando, Touchgrind, and even less popular Payback don't get the attention in the media that they deserve. I specifically mentioned games because they make up a hefty portion of the App Store, but there are also very successful non-games like TextFree Unlimited that are doing just as well. sell over 700,000 copies at varying price points, but never lower than $4.99. In comparison, the highly publicized iShoot, priced at $2.99, sold about 200,000 copies during its best month at the top of the paid applications list. But ngmoco is a giant publisher, so it's no wonder Rolando did so well, but don't worry, there's more. Payback was developed by seasoned veterans Apex Designs. The game was originally developed for other platforms, but Apex Designs decided to try their hand at porting it to the iPhone. This is an example of an already installed fanbase waiting to get their hands on a new version of a beloved game. When Payback initially launched, the hype carried it pretty far. The team at Apex Designs didn't know what to expect, having never developed for the iPhone, but from the looks of things, they are beyond pleased with the results.
"in fact, we have only occasionally been in the charts in most countries," said James DanielsMy final example, once again a game, is Touchgrind by Illusion Labs. Illusion Labs is a relatively small and new developer. Their first big success was Touchgrind, a game that utilizes some very unique mult-touch controls to do various tricks on a finger skateboard. The game quietly launched in November 2008. It eventually broke into the top 100 paid applications, making it all the way to the third spot while being featured in one of Apple's iPhone application commercials. The game has been hovering around the top 20 paid applications ever since. The unique thing about Touchgrind, as opposed to both Rolando and Payback, is that Illusion Labs has never dropped the price of their game. It has been priced at $4.99 since its launch. I had a chance to speak with Illusion Labs team member Anders Martensson about how they decided what Touchgrind was worth:
"I usually compare the price of a game to the admission ticket for a movie. Will the game last longer than a movie? Most likely, so $4.99 for a game that lasts for hours or days sounds cheap to me."Illusion Labs took a very different route than most other small developers. Instead of playing it safe with multiple 99 cent applications, they tried to innovate, and that innovation allowed them to create other great games like their other popular $4.99 game, Sway. How can a mid-priced application be successful? Now that I have outlined some of the more successful mid-priced applications, we can now look at what got them there. Innovation is key. If you have an innovative application, something that sticks out, you will have a much better chance of getting recognized for it. Developers have had their hands tied because 99 cent applications have fared so well. They have been forced to keep up with the rest of the pack, churning out as much average content as possible, but that's not always the best route to take. The App Store is constantly changing and the only way to fix the 99 cent crapware issue is to innovate and take a chance. There is no better time like the present. It's obvious that only some developers are afforded the time to put forth the effort to innovate. The more time a developer has to create their application, the more polish it will receive. Most of the mid-priced applications at the App Store have received extremely favorable reviews. When a developer spends time on an application, it shows. When customers spend a lot of their hard earned cash on a product, they want a solid return from their investment. If the product stinks, they will let you know. So it's not surprising that higher priced applications received better reviews, and better reviews can help overall sales. Word of mouth goes a long way for mid-priced applications. Marketing always helps too! Just because an application isn't in the top 100 paid applications doesn't mean it isn't successful, as Payback has proved. If a developer charges more for an application, they need to sell less units to equal the amount of profit that a cheaper priced application needs to. Developers don't need to stick with a single price to be successful either. Applications can launch at a certain price and developers are allowed to change that price very easily at the App Store. A developer can release an application at a price they deem is worthy, and if sales aren't as good as planned, they can easily drop it to test the water. The difficulty here is that a developer doesn't want to leave it too low for too long, the application may never be able to return back to its original price.
The same thing of course would apply if an application is released at an introductory price. If a developer ends up leaving the application at that price for too long, no one is going to purchase it when the price goes up. When asked about the best approach for a developer to take on pricing, Peter Farago of Flurry Analytics put it best:
"However, many opportunistic developers seem to simply include a message in their app description about how the product is on "sale" for $0.99 but don't really intend to increase the price. This is a mistake. It's sort of like passing by that oriental rug store that always has the "going out of business sale" sign in the window. Consumers aren't stupid. They can smell "used car" sales tactics. At the same time, there are several strategies to step your price up effectively. For example, we've seen pricing moves made to maximize profits like when a developer drops the price of an application to increase its ranking. Once the app breaks into the top 50 applications - if it has enough appeal - the price is increased to maximize profits. This can work pretty well, especially when the lower priced application is cross-selling other applications from within the app."A good rule for all developers is to charge what you feel the application is worth to you. The price can be changed to maximize profits if things aren't going as planned. What kind of change is needed? As I said at the beginning of this column, I wanted to shine the spotlight on mid-priced applications, for better or worse. Many of my favorite applications have been priced in this range and I don't feel they get the attention they deserve, but what can be done to fix it? Time and money are key factors to producing high quality applications. If a quality, mid-priced application isn't selling well, the developer is going to become reluctant to take the same approach for the next application. Developers need to break out of the 99 cent funk, but they need help. As the larger developers and publishers start hitting the market, this will slowly change, but we don't want the indie developers going away either. Apple needs to implement a new system where applications are ranked on price, not just total units sold. This would allow customers to search for the best applications in certain price ranges, effectively allowing some of the mid to high priced applications rise to the top. This would also encourage developers to create these higher priced applications because there would be less fear of getting lost in the giant pile of crapware. We as consumers must also be aware of how these applications benefit us and how much they are worth to us. Don't be afraid to give a $4.99 application a second look just because of its price. The App Store pricing scheme and overall application quality can and will change, it just needs a little more time. Hang in there. Submit your own App Store Insider ideas to: tyler[at]appleiphoneapps[dot]com