Top Grossing Chart shows 99¢ Apps Don’t Make the Most Money Anymore

Sunday, September 13, 2009

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Last week, Apple has quietly added a new section on the Top 25 charts in the App Store. Aside from the top 25 free and paid apps, a new “Top Grossing” chart has been added. The top grossing chart on September 13 shows developers that you don’t have to price the app at 99 cents to make the most money, at least not anymore.

A goal for many developers is to rank in the top 25 free or paid app charts. Most iPhone users go directly to the Top 25 chart to check for the most popular apps. Being listed in the top 25 charts gives those apps exposure and prestige. This is one of the reasons you see so much price fluctuation in some of the iPhone and iPod apps. For example, according to WSJ blog, PopCap Games Inc, maker of the popular Bejeweled puzzle game, cut the price on its Peggle game from $4.99 to 99 cents back in June. Within 24 hours, its rank in top paid apps shot from 60th to second place. Their total sales increased 20 to 50 times.

Now, with a new top grossing section among the top 25 charts, app developers no longer have to drop their price to 99 cents to gain exposure and prestige. They just need to figure out a way to make the most money in the App Store and they will be rewarded with a rank in the top 25 charts. And isn’t maximizing profits what everyone, except the consumers, want in the beginning?

We can see the result from the September 13th Top Grossing List that the top 3 apps on the chart are actually quite pricey. EA’s madden is priced at $9.99, the usual premium price for EA iPhone games. At the second place is Navigon’s MobileNavigator app at $89.99. Navigon is doing well even after it raised its price from the initial launch. Modern Combat is ranked third on the list with Gameloft’s usual price of $6.99. Other than fetching premium prices, the top 3 on the top grossing list has something else in common. They are highly rated quality apps published by renowned publishers such as EA and Gameloft. This suggests that quality apps will should appear on the top grossing charts, and users can decide if they are worth the premium price listed.

The Top Grossing chart in the App Store may have a negative effect on app shoppers. Since lowering prices to 99 cents is no longer the only effective way to be included in the Top 25, some developers will try to maximize their profits in other ways such as advertising instead of lowering the app price. Overtime the price of apps may gradually rise and the days of 99 cent apps dominating the charts may be a thing of the past. However, this effect is yet to be seen.

Although the consumer may end up paying more in the App Store, the effect of allowing developers to charge more for their apps and still get decent sales is important for the release of quality apps in the Apps Store. After all, quality apps may take a large investment to develop. Less people will be willing to spent more money to develop quality apps if the App Store only foster an environment for cheap 99 cents apps. The current 3 charts in the Top 25 allows the users to find both popular free, cheap, and premium apps in the App Store. It should give users more complete view on what’s good and popular in the App Store.

Along with the Genius reccomendation addition to the App Store, Apple is hoping to broaden its users’ view on app selection and buying. It also addresses many developers’ concerns on app visibility and pricing. We should expect that Apple continue to make the App Store more diverse and useful. They may even be loosening their grip on apps that may compete with themselves with the approval of Spotify and Rhapsody. Only with diverse and quality apps to choose from in the App Store will the iPhone evolve to be the ultimate app machine for everything imaginable.

Via the App Machine