Counter Arts wrote:
While I somewhat understand "race to the bottom", what about the factor of "If you make it too cheap then people would believe that it's the quality of the price given."
Market impressions and expectations depend on multiple factors, though, and one of those factors is the price of the rest of the market. New products are constantly compared to a baseline of other, existing products when their 'value' is ascertained, rather than considering the materials and effort and so on that goes into them.
So nobody stops to think "Hey, £10,000 is an awful lot of money for a car - it's essentially a collection of metal and plastic that happens to go forwards or backwards when you use the controls, and they buy in bulk and mass-produce them on an assembly line anyway, the materials and labour cost is probably measured in the hundreds..." - new cars in the same style from every other manufacturer are £12,000, so the £10,000 model is considered cheap. A fast-food cheeseburger costs £1: not because the man on the street has performed a careful analysis of the costs involved in cattle farming and cheese production, the logistics involved with distributing the meat and cheese around the country and the watts of power used to make and cook the burger... but because that's what McDonalds charges, so if your burger costs £2 it had better be a damn sight better than a McDonalds burger. Which admittedly isn't difficult.
So when an iPhone application comes along it isn't considered in terms of how many man-hours of R&D went into it or how good it is at its function until it's first been considered compared to all the other millions of iPhone apps... since
everything else on the planet (statistically speaking) costs $1, something that costs more than that stands out as 'expensive'. Since it's expensive, it has to justify being expensive, because there's probably a hundred other OK-ish apps which do more or less the same thing as yours which
do sell for $1 - especially when your app is a game.
It's true that if you price your thing too low in any market then people will be suspicious of the quality - if you sell a car for £100 or a burger for 10p people will wonder what's wrong with them. But it's not because a good burger can't physically be made for 10p, it's because that's so much cheaper than the other burgers that are on sale.
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