Price is also an issue in the success of an app. Most iPhone users are just not prepared to shell out for an app, no matter how good it is. "App Store consumers are price sensitive, and indie developers, made up of small teams with practically no overhead, are better positioned to thrive in this space," explained Pusenjak.
A quick perusal of the App Store's Top Paid Apps chart shows that nine of the top 10 -- as well as 65 out of the top 100 -- apps all cost $1. Most of the more expensive apps belong to storied game franchises with a built-in fan base, like Street Fighter, Tetris, and Monopoly, or are companion apps to television shows, sports events, and other pop culture phenomena. One good way to circumvent hesitation on the part of gamers is to offer a lite version as an initial teaser, then ramp things up with a tricked-out paid version and maybe a few in-app purchasing options.
Despite the proven success of $1 apps, at a GDC postmortem for the game Canabalt, co-founder of Semi Secret Software Eric Johnson expressed doubts about whether cheap apps can translate to a decent bottom line. He found that although, in general, apps must cost $1 to reach the top 10, they have to cost more in order to sustain a company. It may be a case of short-term versus long-term success, but others see the future leaning toward even less expensive apps.
"The power of free is catching on, "said Backflip's Farrior, though he added that in his experience, "reducing price did nothing to increase sales" of his five paid apps, two of which cost more than $1. If the game is one of quality, players are willing to shell out a bit more for it. Or, if the game is already priced higher, Farrior believes, reducing its price won't increase sales as much as some developers would hope. Farrior's business strategies resulted in five games hitting the top 5 in the App Store, with $2.5 million in net revenue from downloads and ad sales. In the future, Backflip plans to increase revenue by expanding in-app purchases, as well as releasing advertising-supported free games with an option to pay $1 for ad removal.
ngmoco, Inc., a prolific app developer, has taken this idea and built a business strategy around it. Though many of their apps are free initially, they are also loaded with in-app purchases and paid companion apps. That is to say, you can spend $1 or $2 to separately download from the App Store 12 powercells to use with Eliminate, or 20 food points to enhance Touch Pets.