The iPhone Game Economy

November 16th, 2009 Leave a Comment

Apps for iPhoneI mentioned a while back that I’m using my iPhone more frequently as a game console, and I know I’m not the only one.

The iPhone makes a perfect gaming device for me because it’s portable, to entertain me wherever I go, and it’s already another device, meaning I don’t have to lug extra gear.

I’ve never been much of a gamer, so I don’t care about the small screen size, lack of standard controls or any of the annoying things that would bother a real, hardcore gamer.

Over the weekend, I treated myself to Rock Band for the iPhone, which just so happened to be on sale (might still be) for $6.99. I’ve been excited for Rock Band since it came out about a month ago, but the original price ($9.99) seemed a bit high.

Think about that for a second. Rock Band 2 for a gaming console costs about $20, not including the fancy controllers. I’m sure you get more tracks, whereas on the iPhone you pay $0.99 for extra song packs, but still, I’m betting the iPhone version provides about as much utility as the console version, for less than half the price.

In that light, $10 for Rock Band feels like a bargain, and $7 is an absolute steal.

So, knowing how many hours go into building software and based on what games sell for on regular game consoles, I wonder if the iPhone has totally up-ended the economy for games, at least on its platform.

Further, I wonder how long large gaming companies like EA will pour resources into iPhone/iPod Touch game development.

Granted, I have to make some assumptions, like:

  1. Units sold for the iPhone/iPod Touch are a fraction of what are sold for the major gaming console platforms.
  2. Even if development is cheaper for the iPhone platform, it’s still not cheap in terms of cost.
  3. The iPhone platform isn’t a skillset  possessed by the average game developer, which means training, outsourcing or hiring, maybe all of them.
  4. All things considered, the cost-per-unit-sold is higher than other gaming platforms.

I’m a n00b here, so these assumptions could be totally wrong. They’re based on what I’ve read and heard from various iPhone and mobile developers I know.

Maybe it makes more sense to focus on the platform. When Apple launched the App Store, the goal was adoption. So, most apps were free or a nominal $0.99. I suppose the rationale was that since the phone cost $500 plus a service agreement with a two-year contract that the apps should be cheap to drive adoption.

Makes a lot of sense, but even after two billion downloads and 85,000 plus apps, the App Store is still full of free and cheap apps, and there’s no indication that iPhone users want to pay on par with apps for other platforms.

Case in point: the Tweetie 2 upgrade launched recently, and despite being heralded by many as the best Twitter app for the iPhone, many users, including one famous one, were up in arms about paying $2.99 for the upgrade.

Nevermind the fact that the developer refactored the entire app and built-in support for new Twitter features like lists and geo-tagged tweets, making it truly a 1.0 release despite the name.

Over the last year, it’s become clear that many large game shops feel they must have offerings on the iPhone/iPod Touch, regardless of the cost. Not coincidentally, Apple has shifted focus a bit to emphasize how awesome their platform is for gaming.

Is this good for gamers, since they’ll have access to cheap titles on their iPhones? Or will it hurt those who prefer traditional consoles as publishers try to increase margins for games on other platforms?

Or maybe I’m way off in my assumptions about costs?

This is an interesting topic to me, and I’m hoping to get some discussion going.

Please use the comments to enlighten me and share your thoughts.


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