Feature
Making billions of dollars is bad
by RevStu (June 9th, 2010 at 9:34 am)
“Just as gold prospectors scorched the earth behind them, so have developers on the App Store critically damaged the ecosystem in which they operate”
I don’t know about you, viewers, but I’m getting really, really tired of listening to complete arsewits in the idiot games industry bitch about how low prices in the App Store are damaging to game developers.
The latest outpouring of drivel, from the famously stupid and clueless Rob Fahey of gamesindustry.biz, notes that the App Store has been an “immense success” with regard to gaming – and quite rightly so, given the staggering size of the market it’s created out of thin air in little over a year.
Yet just a few paragraphs later, the piece calls the Store’s business model a “destructive cycle”, refers to the impulse-buy pricing that has made it such a success as a “problem” and speaks of the “destructive downward pressure” brought about by cheap games, predicting all manner of doom and catastrophe if people keep happily spending billions of dollars on them.
Just for fun, then, here are the actual FACTS behind the claims that you can’t do well on the App Store unless “destructive downward pressure” forces you to sell your product for 59p.
PRICES OF TOP 100 PAID APPS, 24 April 2010
59p: 59
£1.19-£2.39: 19
£2.99+: 22 (of which £3.49+: 11)
Highest price in top 10: Football Manager 2010 (£6.99, no.10)
Highest-priced game in top 100: Chaos Rings (£7.49, no.65)
Highest-priced app in top 100: NDrive (£9.99, no.61)
In other words, a little over half of the top 100 is made up of apps selling at the lowest permitted price. 41% of the Top 100 apps made it into the chart despite being more expensive than the minimum.
Perhaps more interesting, though, is the top-grossing chart, showing what actually made the most money.
PRICES OF TOP-GROSSING TOP 100 APPS, 24 April 2010
Free: 3 (these are so-called “freemium” games costing nothing to download but with in-app purchases for extra features)
59p: 21
£1.19-£2.39: 17
£2.99-£7.49: 39
£7.99+: 20
Highest price in the top 10: £59.99 (TomTom Western Europe, no.4)
Highest price in top 100: £99.99 (TomTom Europe, no.38)
Highest priced game: £7.49 (Chaos Rings, no.14)
So what does all this tell us? It tells us that:
1. More expensive games (the £1.19 to £2.39 bracket, where most games over 59p are found) do almost exactly as well in the top-grossing chart as they do in the top-selling chart, despite having to compete with the high sales of 59p apps and the high margins of the super-pricey apps.
2. You can make loads of money out of 59p apps. 21% of the places in the top 100 grossing chart is an incredible figure when you consider you’re competing with apps that make almost 200 times as much money as you do from a single sale.
3. You can ALSO make lots of money out of selling games at higher prices, like Football Manager (£6.99), Call Of Duty: Zombies (£5.99), Street Fighter IV (£5.99) and Chaos Rings (£7.49).
In other words, pricing is a CHOICE. Developers and publishers can CHOOSE what price to sell at, and the market will decide what a game is worth. If they think your game is worth 59p and you charge 59p for it, you’ll make loads of money. If they decide your game is worth £6 or £7 and you charge that price, you’ll also make loads of money.
The only way you WON’T make money is if your game is shit, or if you’re charging more for it than people think it’s worth.
Low prices in the App Store are NOT “destructive”. The facts couldn’t be any clearer if someone burned them into your retinas with a laser. Good games at low prices make money. Good games at high prices make money. Conclusion: stop fucking whining and make some good games.
Comments
Nobody's yet commented on this article. Why not be the first? (NB: if you say something like, "First!" then a sinister mechanism will spit a numbing dart.)