Mar 2011

Our Thoughts on the Mac App Store

With the January opening of the Mac App Store, discussion has ensued regarding the effect it would have on small developers. Many argued that the store would be a way for small vendors to gain visibility. This would, in turn, increase their business. In fact, the Mac App Store has proven quite the opposite for GamesForOne.

Several issues have combined to decrease our business. The first is that free apps enjoy increased visibility in the App Store as they have their own category. The rankings receive equal billing with paid apps, and therefore customers gravitate to the free apps first just as you would expect. Many customers seem to feel the free offering is “good enough” and therefore do not search further for a solitaire game. Potential sales are lost. How is this different from the previous Apple Downloads pages? Before, free apps moved down the list as new releases of other games were posted. The effect was that a new release, paid or free, enjoyed the spotlight at the top of the listings for a time. In the App Store, the free apps enjoy a never ending spotlight.

There has already been a race to the bottom in the Mac App Store. Prices are too low overall. For example, one competing solitaire game vendor that charges $30 for their product in direct web sales, released it for $5 in the Mac App Store. Some would argue that was a bold move to garner share. However, combined with the first issue I just presented regarding free products, there is simply not that much money flowing for paid apps in the Card Games section of the Mac App Store regardless of price. Another well known vendor released a 99 cent game from the opening. Surely they are suffering a fall in overall income because we have not observed enough paid app volume to make up for lost sales at previous price points.

How can we make such a judgment about the sales volume? Solitaire Plus enjoyed the #1 position in the Top Grossing lists for the Card Games section for several days back in January. We must have enjoyed a windfall, right? Not so. Our profit on those days at #1 was less than $150 per day. And the drop-off once you fall out of the top spot is severe. The normal average per day is far less. Our game can still crack the top 5 in the Top Grossing list with only five sales in a day!

The App Store does indeed provide a way for small vendors to gain visibility. One person in the Far East can produce an app, post it for a ridiculously low price in the App Store, and take business share. $50 per day profit for such a person is probably a windfall. This means that App Store customers enjoy lower prices. It also means that it is harder for US vendors to compete as we have a far higher cost of living and operating expenses (can you say TAXES and state/local FEES).

The result? Cheap imports are taking over the Mac software business just as they dominate the shelves of your local discount store and US jobs are lost. Does that worry you? Perhaps not, but the day will come when your job will be at risk from the same economic forces. No industry is safe.

Have some thoughts about the Mac App Store? Drop us a note and let us know your thoughts. Feel like we are bad sports? Let us know that too and what we can do to gain your business. If you think our price is too high, tell us at what price you would buy.