Making A Living (Barely) On The iPhone App Store (aka The Numbers Post)
gamesfromwithin.com
gamesfromwithin.com
"It costs 2.99 just for the base app. It costs 99 cents for more pots. 99 cents for fertilizer (to get your flowers to grow faster, since some flowers take as long as a week) and now, for the new seeds of winter, you have to pay another 99 cents."
That seems like a legitimate complaint. But his numbers do suggest the IAP helped a lot. I wonder if he could have found an even better balance and eaked out a bit more money.
It's the developer's responsibility to play around with pricing, etc. to see what maximizes long-term revenue.
(Also, AFAIK, you can't charge less than $0.99 for an in-app purchase, and each IAP has to be identified uniquely.)
If you recruit most of your customers from a population which steals most of their software, then aggressively socialize them to think the software which isn't convenient to steal yet is fairly priced at $1 and expensive at $3, and then ask their opinions about your business model, what were you expecting their opinions to sound like?
In the current iPhone world, 2.99 + a lot of 99 cent charges to essentially just use the app is outrageously expensive. Especially when you consider the app is a rather simple "toy." Just off the top of my head, Train Conductor is a full fledged (and beautiful) game, and it's entirely playable with no additional fees at 1.99. In comparison, Flower Garden really does come out looking ridiculously overpriced. My question is if he had priced his app more in line with what iPhone customers expect, would he have made more money? Or maybe he really did make more money by more "realistically" pricing his app to what he feels it is worth.
The bargain basement iPhone app pricing is a huge problem, for sure, but it's not going away anytime soon. Is it better to just go along with it, or can you make more money by standing firm?
The three top grossing apps in the UK are priced at £49.99, £59.99 and £26.99, and the rest of the top 25 average around £2-3 each. Looks like there is some scope for more expensive applications.
I was planning on leaving a detailed analysis of the effect of IAP for a later post, but you're right that some people didn't like it. Especially in the Facebook group at one point there was almost a small-scale riot from people feeding off each other's negative comments. But as usual, that's just a vocal minority.
I had to intervene by explaining why I was charging for extra content (http://www.facebook.com/topic.php?topic=10677&uid=748971...) and I think that once people realized it was just me and not some faceless corporation, they were much cooler about it.
So my comment about "people loved it" referred to the fact that I got tons of positive feedback and the fact that IAP sold very well.
Frankly, I knew some people wouldn't like me moving in that direction (especially if you're used to the model of free updates for life), but I'm surprised that I didn't ruffle more feathers and most people took it really well.
Also interestingly, I think this has gotten people who had cracked versions of Flower Garden to purchase in-game items, so that probably helped too. But unfortunately I don't have a really accurate way of measuring that (I'll try for my next post).
The difference here is that the fees are small and many, whereas in the old days it was just a one-time drop of $49.99, or whatever.
This model adapts better to an online, social context because it seems less restrictive, allows participation by everyone, and you can choose how much you want to spend on the experience, and how much of the experience is worth unlocking, and what parts to unlock at what times.
I think that it works well for systems like phone apps, where users just want to try something out before dropping much cash on it.
BTW, graphs without labeled axises are a huge pet peeve (you can thank a certain georgia tech professor for dropping me a letter grade for that one).
You're right about the lack of labels (that's how the program does it), but I made sure it was explained in the sentence following the first chart. I wanted to stress that the vertical axis is profit in US$ and not unit of sales (since Flower Garden is $2.99).