We're Not Paying Enough for Apps
I definitely agree with the sentiment of this article, but the author is still an idiot. He still never bought the app, even after being convinced that the cheaper, free apps were lower quality.
Finding the sweet spot of app pricing is an art. Price too low, and you’re undervaluing your product. While a low price may move more units, your profit is roughly the same (as evidenced by Steam’s data in the article, and my personal experience). And, with a lower price, you now have more users. As a solo or indie dev, this means your quality of support and frequency of updates suffers, which means your customers get an inferior product.
Pricing your app higher, though, does make life easier. You’ll sell fewer copies of the app and likely drive up the amount of piracy (though, in my experience, people pirate my $1.43 app as often as my $3.99 apps, which is to say a lot). However, having fewer users means that the personal level of support my customers are used to can continue. And, if I’m supporting fewer users, I can have more time to improve the app and push out updates.
If I have 100 users that bought my app at $3.99, I can support the 10 or 20 of them that will ever contact me for support and still have free time to live my life, time to improve the app, and time to make more apps. However, if I drop the price to $0.99, I’ll now have around 400 users. I have now made the exact same amount of money, but now I have more users to support and more users expecting updates. As a solo developer, this means my ability to support users dwindles and my time to improve the app dwindles. This sucks for everyone.
In fact, if you look at the gross sales of a $3.99 app to 100 users (100 is a quick, round number to do some math on), it’s around $400 (before app stores take their cut). So, you make $400, your users love the app, they get personalized support direct from me via Twitter or email, they get frequent updates, and I have time to hang out with my wife. Everyone’s happy!
Now, let’s say I drop the price of my app to $0.99. The lower price point means more users are likely to download the app and give it a try as there’s less to lose if they don’t like it. In my experience, this is exactly what happens — lower price equals more downloads. However, the amount of extra downloads rarely (if ever) exceeds enough to increase my profit. At $0.99, I garner about 4x’s as many downloads, yielding 400 users. 400 users at $0.99 means my gross sales is still $400.
By lowering the cost of my app, I have higher download counts and more users, but still have been compensated the same amount as if only 100 users downloaded my app at full price. The only difference is now I have four times as many users to support, which means four times as many users with problems and issues. The 10 or 20 users that might contact me for support before has now increased to 40 or 80 users contacting me. My response time on support requests increases, which makes for angrier customers. This also means that I’m now spending time fielding support requests instead of developing and improving the app. This also means that my free time dwindles. This also means that my happiness drops, destroying the very reason I develop in the first place.
And what do I have to show for all that added effort and stress? The ability to say 400 people downloaded my app rather than 100. No additional revenue. No new features. No extra praise. Now, consider this while using real download numbers. 1000 vs 4000, 10000 vs 40000. The problems increase exponentially (400 to 800 requests, 4000 to 8000 requests).
Not only that, but more users means more hits to my web server for data retrievals and log ins, image uploads, etc. More hits to my server means more bandwidth usage, which equates to more money. I am now receiving a net profit that is less than the higher price point with fewer users, in addition to the headaches outlined above.
Obviously, money isn’t the main reason I develop. I love doing it. I like creating things. But, I have bills to pay and my stomach’s growling is pretty loud, so I tend to enjoy putting food into it.
Additionally, I enjoy making something that other people enjoy and can use every day. I can’t do this when I’m spending all my development time answering emails or engaging in a Twitter conversation.
I’m seeing this in just 4 days of lowering Wooden Rows to $1.99 for a 1 week promotion with HP. I’ll probably never do a sale like this again as a result, but we’ll see how it turns out by Thursday when the sale ends.
So, for me, as an indie developer, I’d prefer to have fewer users at a higher price point than more users at a lower price point.
Update: @tross1312 on Twitter raises an interesting question:
Do you think people who buy at $1 but not $4 bring different expectations? Perhaps a difference in type, not just numbers.
I definitely think this is the case. If an app is priced at $3.99 and a user decides the app isn’t important enough to them to spend that amount on it and doesn’t purchase the app, but will buy it if the price is dropped likely doesn’t see the value in the application as a whole. The odds that users that only buy at a sale or lower price will contact you for support are higher. I’ve had more support requests and more negative reviews of the app since lowering the price. Users willing to pay the original asking price (be it $4 or $1) are more likely to understand the value of the app are less likely to require support (except for legitimate bugs in the the development of the app).














