A couple of months ago, I wrote about how the state of iPhone gaming was changing with an influx in bigger studios with smaller and smaller pricing margins.
Things have gotten even more competitive since with Gameloft and other studios drastically cutting their prices on older games down to $0.99. While this is good for consumers in the short term, the long term effects are potentially more troubling. There is a constant debate on TouchArcade as to these long term effects. One camp says that the App Store must sustain higher priced games in order to promote more quality titles. The other camp disputes this. I’m with the former camp, as is id Software’s John Carmack. In an interview, he said:
If [iPhone] games could have a reasonable shelf life at $9.99, you will start seeing multi-million dollar development budgets as the market continues to grow. But if it turns out the only way you end up being successful on the iPhone is games that cost a couple dollars, you’re never going to achieve that parity with the other handhelds.
One major effect of this $0.99 economy has been seen by EA’s announcement that they have created a micro-studio within the company to produce casual $0.99 iPhone titles. These titles are going to be in development just a short time (a month or so), presumably to recreate the success of some of the most popular games in the App Store, which also happen to be $0.99.
Let’s think about that for a second… EA is putting resources into low-risk casual $0.99 games. But imagine the flip side to this: What if EA had announced they were creating an division just to produce high quality iPhone original titles? Imagine big-budget original iPhone games with the resources of a major studio behind them.
Could it happen? If there was enough money in it, I’m sure it could happen… but it’s not going to happen at a $0.99 price point.
Now, I don’t blame consumers for buying $0.99 games, nor do I blame studios for following the money. But I do think the long term effects are going to result in a market of two types of games. 1) inexpensive casual titles and 2) inexpensive ports from other devices. Meanwhile, deep, high quality, iPhone original titles will become more and more scarce. Of course, the market will balance itself out over time, and opportunities will appear for developers to fill the gaps. I do expect downloadable content will result in more episodic apps with level packs and add-ons.
Indie developers are also going to be squeezed out further. There are only 100 spots in the top 100. Flight Control, Pocket God, Fieldrunners and Koi Pod pretty much have permanent spots. There are a few Chillingo titles that are on $0.99 sale that take up another 3 spots or so. A few major titles, a few novelty apps, and now EA’s $0.99 game of the month, and you’re down to fewer and fewer spots that you are really competing with.
Meanwhile, Apple is the only one with the power to really change the dynamics of the market through changes in the App Store rankings… but I’m not sure if they will. It’ll be interesting to see where things go from here.