Is AppStore bad for gaming business?

Today I was in the iPhone AppStore browsing the noise in hope of finding some signal, I found a game that caught my interest and then immediately went to the reviews to see if the author of the game can back up what they are selling.

I read the reviews and a few of them were pushing the notion that “save your 0.99c” agenda, and I for one was relieved – thankfully I did not waste that 99c I was saving.

That sobered me up, I thought to myself “I’m about to spend 99c on some bad coffee that I’ll unlikely finish while I wait for a meeting that I’ll no doubt move to a different spot for and buy yet another coffee”

The question I have is whether or not the concept of an AppStore is doing the market a positive or a negative in terms of how its conditioning us In making the purchase decisions.

How far have we come where went from spending $20-100 on games to now agonising over a $0.99c purchase and it appears the trending is pushing closer and closer to the $0.00 value.

Is this why we now are seeing games which are free-ware, you know the ones that haunt AppStore and Facebook. These are the games that get you addicted to their crack and slowly encourage you to spend $50 on diamonds to help increase your gameplay? ..give a little but not the entire farm and let the desperate/gullible micro pay their way to the abyss of content gratification.

Millions are being made on this, in fact the assumption we are often making now due to the various amounts of rumours around overnight millionaires occurring due to $2 micro purchases worldwide occurring. Its fair to say that when you do justify the $2 purchase you are silently telling yourself “Well, I’m only paying $2 but these guys are going to get millions because everyone else is paying and it all adds up”

We’ve switched from being a consumer and now have become their collective profit controller making assumptions and assertions round how much they should be allowed to make in total vs. letting the previous way of life which consisted of “Oh, they made money? Good for them” thinking.

I can’t but help wanting to ask more questions around this space, for instance – is this slowly killing the industry, or is it making it better? If word gets out that the gold rush in game development for devices is probably a false economy given its saturation levels are now encouraging mediocrity to dominate the way in which we gain enjoyment from games?

Is it me or is anyone else bored of Angry birds? Yet each season they continue to be the most prominent “this is how you’re supposed to make money and games” posturing.

I look at Minecraft itself and seeing how it was such a low price point to now being one of the biggest earners in the game industry and continue to grow, is that a good thing or a bad thing? Notch made a game that is now worth hundreds of millions of dollars and he didn’t have to pay Apple a cent or abide by the rinse/repeat formula of game development on devices.

Is there stillroom for another Minecraft? Fortresscraft on XBOX pretty much cut & pasted Minecrafts engine but whacked in a XBOX Avatar, charged a small amount and is now making millions.

Nothing creative happened, just lots of rinse and repeat formulas but the upside is these games are no longer expensive wastes of money; they are instead small micro payments – less of a sting in your buyer’s remorse.

Downside, as more and more of these games abuse the new market channels they in turn drive prices further and further down. Low prices mean that in order for truly exceptional games to stand out they first must meet the $2 or above threshold of quality bands. If they then succeed in that, they are then given a huge assumption of “well they earn $2 from millions of us so I’m not willing to pay $5 for it” thinking.

In 5 years, do you think a guy like Notch can get away with charging $15 for a game like Minecraft? Alternatively, do you think indie game developers are about to get a cold reality shock given the bubble may pop?

Will game studios like Valve have to keep lowering prices to the point where they just can’t justify the expensive pushing gaming envelopes further given the yield doesn’t’ add up to the costs it takes to create. If that were the case then they’d need to create 3-5 games that are money makers in order to build a war chest that funds the next killer gaming engine of choice.

Are game engine developers retreating to charging hefty prices for leasing their codebase thus reducing the mod / expansion on innovation from occurring? Why fight the war when you can build the bullets J

Now comes the next question, is Application development about to get worse or better given these market conditions today?

How I feel about buying apps

How I feel about buying apps

Related Posts:

  • John

    < $5 and I don't flinch. Anything higher than that and I am doing a fair amount of research before pulling the trigger. 

    To be fair, most mobile apps are charging the right amount. They are worth all $.99 they charge. Sometimes you might even feel like you are getting your dollars worth!

    There are stand outs to be sure, and they earn their $5 easily. As soon as you get into $20 – $50 range you are almost always talking about games that, today at least, require hardware that mobile devices simply cannot provide. That is part of the experience. Part of the value.

    When a Skyrim-like title finally hits the tablets as a release platform, let's see how much it costs. We might be waiting a few more years to find out though.

    I think the Western/Asian revenue model is another (interesting) issue entirely. Spoiler: Asian model is the growth model.