The high cost of software in the 1980s

You have to remeber this was long before the "A computer on every desk" era of mas market asia supply chains. The computer itself was a major investment. An Apple II with a floppy disk set you back over $4K. Add a functional printer for another $1K at least, not including the parralel port addin card needed to communicate with it.

So software was a low volume business. On the upside, in those days often free telephone support was included. And this wasn't some call center person reading from a script either. You actually called the company helpline and some knowledgeable person would help you out whatever the problem.

In today's market, low volume business software is still expensive, I'd even argue much more expensive than it was in those days.

Not to forget that the software (until the mid-late '90's and early 2000):

1) was licensed "for life"

2) did NOT "phone home" your data (actually had no way to phone home at all)

The runtime environments of the time were incredibly flaky and weird, until well after 2000. Most of the cost of making and maintaining software was in working around horrible bugs and misfeatures in the OSes, particularly MS ones. MS set the whole industry back at least 20 years by having such horrible systems, and getting people convinced they were normal and acceptable.

After spending all day discovering a workaround for an OS bug, you might have a few minutes left to work on a feature.

In the earlier '80s, before MS-DOS, it was partly the very small market, and partly the horrible development tools available that kept prices up. We are spoiled today.

> And from the screenshots, it becomes clear that “hi-res” is a term whose definition varies with the state of technology at the time:

"Hi-res" has a specific meaning in the context of an Apple II, referring to its 280x192 pixel mode with artifact color (or in this case 280x160 with 4 rows of text.)

>Penguin Software’s The Complete Graphics System—a set of drawing and shape tools for programmers was $119.95 ($330ish).

A modern state-of-the-art graphics engine like Unity 3D will set you back $1500. Though for 2D games you can get the desktop version of GameMaker Studio for $100.

Besides vastly greater sales volume and higher programmer productivity due to better tools, another reason why software is cheaper now is cheap distribution via the internet and app stores.

Not having to deal with boxes, printed manuals, inventory, warehouses, shipping, and shelf space saves money. And the 10%-30% markup from app stores is probably lower than the 50% markup from brick-and-mortar stores of the 1980s.

I still occasionally miss printed manuals though, especially for games.

Did software engineer salaries reflect the ~3x higher costs? Or was there simply less volume of sales -> lower salary?

That’s not cost, it’s price. Prices had to be high because of the smaller market and the rampant piracy (partly, IMO, caused by the high prices)