I don't know - the underlying argument here, that developers need to avoid a race to the bottom isn't particularly new, new to Microsoft [0], or in my opinion convincing. This article seems like a strange mix of a Microsoft marketing piece, and a call for app developer collusion. In other industries it seems almost by definition that the worth of the product is what it's selling for -- .99 cents for most apps. Arguments along the lines of "surely apps are worth more because, c'mon look at the price of coffee," use only emotion based on how much work we see go into those as developers not the value provided to users. It's very easy to blame poor revenue as a marketplace problem rather than a product problem and it's this type of thinking that drives this conclusion rather than proper analysis.
A hit driven industry can be brutal but I'm not convinced that the app store is more of one than traditional software, social websites, marketplaces, and games all spring to mind as places where success is very hit driven. Even outside our industry: books, television, movies, music, fashion - these all all hit driven because that is what fits best with where the demand is.
* In the television industry most shows have both higher production costs and lower prices than software, does this mean this industry is broken?
* Increasingly for app store purchases with higher prices I hear about the apps from avenues other than the Apple featured list (ex drawing apps, higher priced games.) It seems that the marketing channel that is being provided for free is being mistaken for the only way to market.
Fundamentally as a developer if I want my app to sell for more money, I should make it bring more value to the customer, not hope for minimum pricing constraints on all apps. It's a great thing as a consumer that distribution and marketing channels like the app store have made it possible for me to use more software, and spend more money on software than I ever did on a pc.
[0] See minimum pricing of Xbox live games on both Xbox and Windows Phone
> Fundamentally as a developer if I want my app to sell for more money, I should make it bring more value to the customer, not hope for minimum pricing constraints on all apps.
Fundamentally, you are making a major category error. iPhones and iPhone apps are complementary products. You can't use an iPhone app without an iPhone and an iPhone is useless without apps (clue: Apple advertise the apps available for an iPhone - not the iPhone itself). Apple's marketing approach is to 'commoditise the complements' ie charge high prices for their side of the pairing whilst driving down prices on the app side. Market Theory (see Michael Porter's book Competitive Strategy - Techniques For Analyizing Industries And Competitors) indicates that pricing pressure between a company (Apple) and its suppliers (app developers) lies with the party that can most easily expand its operations into the others market. It is easy for Apple to write an app that duplicates your app - it is hard for you, as an app developer, to launch your own global smart phone. Therefore Apple has prices pressure against you (make you apps cheap, give me 30% of in-app purchases). The Windows team have less competitive price pressure to apply - therefore the price per app sold is higher than the Mac (but your volume is likely to be less).
Apple have (consciously) structured the market to capture the value for themselves - don't kid yourself otherwise. Anti-competitive legislation is designed to mop up this sort of behaviour - when it becomes extreme - I don't think Apple is in the monopoly position yet, personally, YMMV.
"This article seems like a strange mix of a Microsoft marketing piece, and a call for app developer collusion."
Author here; definitely not asking for collusion. More specifically, here is what I said:
"Look, you’re a developer – not a rodent in a maze. You should be able to recognize the pattern and the habit-forming behavior from a distance: if you bring iOS’s terrible economics to Windows 8, then Win8 will have similarly terrible economics.
Microsoft set the minimum price of an app in the Windows Store to $1.49 for a reason: to give developers a clean slate on app economics. You want a better opportunity than iOS? Then don’t ship iOS-utility (low-utility) apps with iOS prices on a platform that is purposefully engineered to do better!"
What I'm asking developers to do is: don't ship fart apps and other toys that pollute the iOS app store. Do what Router .CoCPit did and take advantage of WinRT's rich feature set (UPnP support in that particular instance) to deliver apps that are higher utility and thus worth more.
WinRT's native capabilities give developers access to a lot of things that could only be done through traditional desktop apps previously, and combines it with an App Store distribution model that has some new twists on pricing and monetization (expiring in-app purchases, for instance.)
I'm telling developers to take advantage of that and not blindly replicate what they did on iOS or Android.
WinRT will create opportunities for developers to build sustainable businesses off of higher utility, higher price,d and highly targeted applications - apps that are used by 10s of thousands, not millions.
The hit-driven mentality that pervades iOS need not apply here if we realize what we have in front of us.
I think you don't understand individuals. We just want to eat - Individual developers really only care about making money.
If a fart app is going to make an individual developer good money, nothing you can say will stop them from being made.
If developers can seemingly make more money by charging less, nothing you can say will make them stop charging less.
Microsoft set a price floor to attract developers who aren't thinking about 1 year in the future, when Microsoft will either remove that floor because their platform is successful enough (they don't have to court developers), or they will kill the platform itself (and your app).
> Individual developers really only care about making money.
I think it is worse than this, (some) individual developers care about getting rich with one lucky, undeserved hit app. If they cared about a good average income, they would get a proper job as an iOS developer instead.
The bad news for Windows 8 is that this behavior will be at its peak right after opening the store. On the rather mature market of iOS, I haven't heard of overnight fart-app millionaires in a while.
I'm sorry, I certainly didn't mean to say you were actively asking for app developers to collude on price. Rather, that is the conclusion I drew following your arguments about app store issues. To be specific: (note some quotes are abbreviated, but I certainly do not intent to alter their meaning)
Your points about the app store being a race to the bottom
"There’s a tremendously negative pressure on prices … self-inflicted by developers..."
* "Microsoft set the minimum price… to give developers a clean slate on app economics"
I understand you when you say that higher quality apps are needed to get higher prices. What I am missing how higher quality apps in proportion to lower quality apps will happen. The proportion to lower value apps is that part that made me think price control (or curation, but to my knowledge the MS store won't be substantially different than Apple there.) I get the proportion part from your arguments that the app store is a race to the bottom, and has too many apps to make an impact.
I guess I disagree with your premise that the app store is broken, a race to the bottom, or that developers are having trouble making money there. All of the (anecdotal) evidence I've seen points to the opposite of that. I also don't see why the Win8 store would be any less hit driven than iOS, as I argued in the parent post.
I do agree with your articles position that higher quality apps are the key to higher prices, and I think your points about some of the scenarios win8 supports are very interesting. I'd love to read more about what I can do in Win8 versus iOS; that's just not the main point I got from your article (but may have been your intent :)
Fair enough - you're not the first person to draw that conclusion, so perhaps I should have been more explicit.
"I'd love to read more about what I can do in Win8 versus iOS; that's just not the main point I got from your article (but may have been your intent :)"
The developers have nothing to do with it. The types of apps and pricing structure that will appear in the store depends entirely on how the store owner curates and presents the apps. Developers will obviously just price to maximize/revenue or exposure depending on their goals.
Steam for example has none of the same problems as the app store because they very actively curate, and they don't let the riff raff in, which erodes consumer confidence in shopping in the store.
Apple on the other hand, actively structures their store to drive down prices. The busiest, most profitable placement in the store is the top volume charts. Which naturally means that developers will lower their prices to climb the charts and get better placement. Additionally they don't curate much, or allow demos, so consumer confidence that they will like the app they buy is low.
> "Steam for example has none of the same problems as the app store because they very actively curate, and they don't let the riff raff in, which erodes consumer confidence in shopping in the store."
I love Steam, but they don't police it as much as you think.
First off, pre-orders are always problematic as Steam doesn't know if a new game is going to be good or an unfinished tech demo that was released one year too early, which was the case for a game I pre-ordered last year. If it's bad enough they'll do refunds, but you need to push them and they won't always grant them if you don't ask in a timely manner.
More troubling, they sell games that they know are broken. Full Spectrum Warrior is one example that I can think of. The game tries to resolve a no-longer existing address hundreds of times a second and lags horribly. It's easily fixed but Steam support doesn't care because it's not Valve's game.
Steam does a lot of things right, but it's very much a buyer beware situation, and for higher stakes than a $0.99 app.
Yeah, the games will have problems, but you don't need to sift through hundreds of lame cash-in microapps that make early-2000 era "punch the monkey" Flash adds look gameplay rich to deal with.
I was assuming the meaning for that statement was on that point, not on a developer supporting an 8 year old game.
Do you have numbers to back this up? Because I thought that front-page placement on the App Store is much more desirable than to be in any of the charts. (Of course, being #1 in top-grossing is good - but not only because it increases visibility :)). Even in iTunes, where the charts are visible on the landing page, only #1 even shows an icon, compared to about 50 curated apps.
I think the big difference is that people buy a game on Steam to be immersed for a few days, yet people buy smartphone apps to bridge the gap between two Twitter mentions or subway stops.
I've thought for a while that the Apple app store has become very problematic for independent software developers. Somehow the consumer expectation for the reasonable price of an app has been driven below $2 no matter how much utility it provides. I hear people regularly complaining when apps they will use for hundreds of hours cost more than $3. Or bitching because the developer of such an app did not reply to their email (when the time spent answering such an email might be $5 - $10 based on a reasonable wage for the developer). We have major hit games that would have cost $50 on a console or PC coming out for $3 - $5 on phones and tablets. The prices to me are just not sustainable. At the moment, the excitement and opportunity of working in the mobile software industry is still driving developers to be willing to ship things way under cost just to develop their skills, gain a foothold and to participate in something they enjoy. But this can't last forever, and I'm not sure how it is going to correct itself.
App store pricing is a function of intrinsic value to the customer and competition in the market. No matter what you propose, the race to the bottom (optimal) can only be avoided if similarly skilled developers in cheaper countries can be kept out of the store. Good luck with that...
Initial market leaders have limited choices: out-market, out-innovate, out-price or out-service the competition. Deliver value or perish. It's a 'win' for the consumer, who can vote with their wallets (now transparent) and their reviews (also transparent). In general, it's a win in terms of quality and experience for the consumer, and for the small developer as well.
I am very happy about this. Big name companies can no longer get away with crappy software and crappy support. Little guys can shine. For most developers amongst us, this is an opportunity, not a threat.
PS Though I like the feature of 15min review on Android, I think this breaks the feedback and quality cycle (who bothers to complain if you got your money back?!?). They should abandon this mechanism.
Smart developers will charge money one way or another, but there will be a race to the bottom for most verticals. Now that a single individual for $100 can get a distribution license and ship an app that does something, the barrier is too low to force higher prices or higher quality. As long as that individual is willing to sell their product for cheaper than the next product, eventually there is a race to the bottom.
Software's incremental cost is $0 on the app store, so you can sell it for $0 and throw a few ads on it, and if the dev makes > $0 they might be happy with that, and if they aren't they'll adjust prices upward until they get what they want.
Also, this doesn't happen with physical distribution usually because things can't sell for less than the cost to manufacture, distribute, and sell. At least, the price for physical goods doesn't hit $0.
Slightly rough characterization of iOS apps, but I must agree that apps on Windows 8 desktop can essentially be viewed as full software products. Plus, it will frequently be backed by businesses so money may not be as sensitive.
Personally, I hope that tradition PC game makers take advantage of the MS Shop and continue to charge the same as they currently do. This could translate very well for other software products/apps as the games largely drove the $.99 revolution.
Exactly - developers doing Windows 8 need to take advantage of the fact that they get inexpensive distribution directly onto desktops and laptops, where their apps can be treated like "full software" products, as you put it, and not mobile apps.
Really? Even now in its juvenile stage the Windows 8 store suffers from most of the problems of the that plague the AppStore - the microsoft imposed censorship, guarantees that some interesting apps will never be made. And never be payed for. So you are left with yet another bland clone.
The other thing that the store gives you is low visibility. Because there is one and one only channel of distribution for these apps - currently if I take only the most popular games - it is a list of 60 or 90 titles. I cannot read the titles of the games, let alone try some non-free. There are no humble bundles, gogs, desuras, gamersgate or key-sites from which to obtain or which can increase the visibility and renown. And no - review sites are not good enough because the seller loyalty lays with the customer. The professional reviewer usually with the company that pays the bills.
The problem with apps is there are too many of them. You get overloaded. Where as with an open platform you can tune to the distribution channel that serves your needs best in the app store world this is impossible.
I've said in other places and I'll say it again. One of the problems is that Microsoft also takes a lot of money for their dev tools. The express editions are limited with the things that can help your apps shine. AFAIK profiling is only available in VS 2012 Professional and up. $500 can be hard to justify for a moonlighting app dev. Heck I've even worked at companies where $500 for a dev tool was too much.
This is actually contrary to Apple where they give you every opportunity with their tools to make shiny apps and make their platform a joy to use.
And also I'm not saying that Microsoft should give away their tools for free. I just think that the cost is too prohibitive to individual developers who would like to make their apps "great" instead of "good enough". This could mean that the store would be full of "good enough" apps. And if it is only "good enough" why charge more?
Assuming I have a monitor, keyboard, etc. the cheapest I can get into developing for iOS is $699- the cost of buying a MacMini and paying for an Apple Developer license. Since the baseline MacMini probably isn't enough machine for most developers push that to $899 or $1099.
On the other side of that coin users are buying iOS devices which net Apple huge profits. Sure the high end Microsoft dev tools are spendy, but don't act like Apple is helping developers out.
It is not that Apple go out of their way to help their devs out. But buying a computer and buying a dev tool license are two different things requiring two different mindsets(think utilisation). And $500 for VS is the lowest end of the paid visual studio. Like I stated in my first post I'm not saying that they should give it away everything for free I just think that lowest end should be cheaper to give the opportunity to individual devs to make better apps.
Somewhere in Microsoft's history there lives the bean counter that took down the company. He's the guy who insisted on protecting the tiny stream of income Microsoft earns from their development tools. He's the guy who turned off a generation of programmers, and pushed them to Java and open source.
I hope this works out for the Windows developers, but I have a suspicion that it wasn't the developers alone who ruined the iOS App Store.
And, unfortunately, it really is "ruined"[1]. I started my current project as an iPhone app, then decided to move to an iPad, but, six months ago, after really evaluating the market, I realized I needed to make my product a web-based subscription with mobile features (probably embodied as apps). There was no way I could charge enough for my app to make a business, since I'm not creating a product that caters to the tens of millions.
1. It is ruined in the context of being able to make a living on an app without getting insanely lucky. There is little a company can do to market around the luck factor, and prices are so low that there is no middle ground.
"It is ruined in the context of being able to make a living on an app without getting insanely lucky."
That was a moment in time, really. It wasn't long enough to get nostalgic about it. The market was just developing. In any case, you had to be insanely lucky to create the right app at the right time then as well.
Agreed. I don't even remember the last time I bought an app in the iOS store. Who has time to wade through all that shit, trying to find the one in a thousand that's worth looking at?
Amazon stocks vastly greater numbers of products, yet I always seem to be _able_ to find something interesting to buy there.
It is very easy to build something the 2nd time especially when your competitor has invested heavily into working out the kinks. For many software-chop-shops it makes sense to find something with high downloads and without much competition, rip it off, and sell it at 1/2 the price. Repeat ad nauseum.
I think the only way to curb this race to the bottom is to re-introduce brand recognition to the consumer base. If software company X is known for producing well-tested-reliable software then I wouldn't hesitate to pay 20-50% more for their version of the software. Unless Windows Software does this I think it'll just be another lowest-bidder-wins marketplace.
Some software companies do this on the App Store, e.g. Toca Boca. They name all their apps "Toca <something>", and they're all in the same genre (kids' games with emphasis on free play - no goals or missions etc).
Their games cost $2; while it isn't a lot of money it's still above the minimum. And they seem to be doing pretty well too, several titles in the top 50 here long after release.
The Mac App Store is a much better comparison than iOS, and it's far from a race to the bottom there. If you look at the Top 100 Grossing apps, only 10 or so are priced at $4.99 or less.
Most of the apps are closer to the traditional desktop software pricing range of $19.99 - $99.99.
This article is a useful combination of "here are some very real reasons the Windows app store is different" and "waaaaah i don't like competition don't make things cheap and impair my ability to make a living off of users; you'd better collude to make things more expensive or you're bad people." To the first part, I say, bravo. To the second, I say, call me a waa-mbulance. :P
Author here; I don't feel that way about #2 at all.
You know what I don't want? To read bunch of stories about how the Windows Store is a "terrible opportunity for developers" and "no one is making money" because developers recreated the same economic problems that plague the iOS app store in the Windows Store.
Developers learn from their mistakes when they screw up their code; they should similarly learn from their mistakes when they screw up their marketing and pricing. So far, haven't seen much of the latter looking at what's currently available in the Windows Store.
The bottom line is: as an app publisher, how you set price / payment expectations with your user is almost more important than what your app actually does if your goal is to build a sustainable business for yourself. Taking the time to survey the ecosystem and realize that the market forces of Windows 8 are different and potentially much more lucrative is well worth the investment.
Well yes, and bravo to those sentiments, which are insightful and worthy of praise... but then you say a bunch of things like: "If developers like you don’t screw it up, that is." "Your goal is to not do what your careless friends in iOS-land did and create a hopeless ghetto of a marketplace." "You as a developer have a responsibility when it comes to the economics of the Windows Store."
I'm not the only one here who felt your "call to action" felt like a call to collusion or bitterness at not being able to squeeze more money off the Apple app store. If I make apps for the Windows store, I'll charge what I feel like charging, thank you very much, and I'll have no one's moralizing lectures. Thanks. :)
"I'm not the only one here who felt your "call to action" felt like a call to collusion or bitterness at not being able to squeeze more money off the Apple app store."
Sorry you felt that way, but that's not what I said :)
You can charge what you want; just don't be surprised by the results if you don't attempt to learn the market and realize your own value.
There are so many apps I might buy if I could try them, but I will never buy apps that I can't try. The ad model sucks and the lite model (2 different apps) sucks.
You should be able to install, use for 3 days, then it would get deleted from your device if you don't buy it.
> Author here; I love the Mac App Store and want to eventually use MonoMac to port some of my Windows stuff over to it :)
I personally don't recommend this. I've been a big, big Mono booster over the years, but I have a hard time trusting the developers behind it. (For an illustrative example as to why, take a look at MonoTouch's problems with iOS 6. That bit my employer in the ass. It hasn't happened with MonoMac, but to me there's a "yet" involved.)
As un-sexy as it is, C or C++ seem to be the way to go. It's what I'm doing now, with a platform-appropriate hat on top that uses as little Objective-C (on OS X) as possible.
Good points in the article, although I didn't like the condescending tone of "step into my office for a talk".
Reminds me of the Sparrow mail client[1], which shut down in spite of having a great product. Also, allowing a trial period and own in-app purchases is a good move by Microsoft.
Also, how are the Mac OS X App Store developers and prices faring? I think that's an important point of comparison that the author failed to make.
Author here; sorry that you didn't like the tone - was trying to do something different stylistically and I can see how it comes across as condescending. That was not my intention :(
I don't have as much data on the OS X app store - but prices do trend towards traditional desktop economics moreso than native app economics.
Windows 8 will be interesting, because it's not just the desktop ecosystem - it's also tablet and phone too. However, as I pointed out - I think the dominant devices in market will be X86 and X64 for some time to come.
A hit driven industry can be brutal but I'm not convinced that the app store is more of one than traditional software, social websites, marketplaces, and games all spring to mind as places where success is very hit driven. Even outside our industry: books, television, movies, music, fashion - these all all hit driven because that is what fits best with where the demand is.
* In the television industry most shows have both higher production costs and lower prices than software, does this mean this industry is broken?
* Increasingly for app store purchases with higher prices I hear about the apps from avenues other than the Apple featured list (ex drawing apps, higher priced games.) It seems that the marketing channel that is being provided for free is being mistaken for the only way to market.
Fundamentally as a developer if I want my app to sell for more money, I should make it bring more value to the customer, not hope for minimum pricing constraints on all apps. It's a great thing as a consumer that distribution and marketing channels like the app store have made it possible for me to use more software, and spend more money on software than I ever did on a pc.
[0] See minimum pricing of Xbox live games on both Xbox and Windows Phone