Generally speaking, production value (how polished the game looks), plus niche appeal, dictates the price of your app. The narrower the niche, the prettier the game, the more you can charge.
Here is a list notable games that you should study. Each game comes with a little blurb that will tell you what you should observe closely. You have to play the games to really understand the execution (I didn't want to spend a lot of time writing long paragraphs on something that is better explained through just playing).
Also, I can only vouche for these pricing strategies on iOS. I've gotten ADR on Android now, but it's still too soon to tell what works and what doesn't.
I generally don't like ad supported apps, but the following games do a great job of it.
Crossy Road
Crossy Road does a great job of framing ads as a reward (as opposed to a punishment when you lose). New characters/skins can be unlocked by watching video ads. I also like that the new characters don't give you any kind of advantage in the game (they are purely novelty items).
Quest Keeper
I played this longer than I'd like to admit :-P. It has solid gameplay mechanics which fit well on a mobile medium. The polish is high, the gameplay is accessible to a large audience. The in-game items can all be obtained by in-game currency gained through playing. You can get a reasonable bump of coins by watching a video ad. This is fairly standard for most ad supported games, but I feel that Quest Keeper does an exceptional job of it.
Geometry Dash
Geometry Dash offers both a free and paid version. I generally prefer this approach. The free version of Geometry Dash has ads, the paid version does not. The ad frequency in the free version isn't too intrusive (even though it's shown after you die... which can be percieved as a pushinment).
Aside:
For A Noble Circle, I took more of a "try before you buy" approach. You can play A Noble Circle - Prologue for free, and a link is presented at the end of the game to download the full version.
Aside II:
When A Dark Room went viral, there was no free offering, so cloners took advantage of that. By offering both a free and paid version, you keep cloners from name squatting on your IP in case you suddenly go viral (A Dark Room now is a registered trademark... but that took a year to get into place, so don't rely on that as a means to stop clones from cropping up if your game gets popular).
Threes! Free
I love this game. Well designed, lovable, extremely high production value. For a long time, Threes! was only a premium title (being sold for $2.99). A couple years later, there was a free offering of Threes! called Threes! Free. In the free version, you're given tokens used to play the game. Once you run out of tokens, you can watch a video ad to get more tokens. This approach harkens back to the old arcade machines. The emphasis here is (again) on not treating ads as a punishment, but as a means to continue playing the game. I also like that the user can decide when to watch the ad/refill coins (as opposed to them interrupting a play session).
Bardbarian
Bardbarian is a novel tower defense game (again with good polish). They took the approach of "pay to remove ads". I usually don't recommend doing this (just create a premium offering to compliment the free one). But, if you're going to take the "free, but pay to remove ads", provide something additional to removing ads. In Bardbarian, you get a golden axe that gives you a bonus in coin collection rates. So, while ads are a "punishment" in the game, you can pay to remove them plus get a cool new item. Punch Quest (another game I enjoy playing) does a good job of this too.
The big bucks is in free games with IAP. However, I prefer many niche premium apps that each generate a small amount of income, as opposed to betting on just one IP (so keep that bias in mind when reading the following sections).
If you're going with a premium title, consider the following (in order of most to least important):
- Make sure it has niche/focused appeal (not for you if your game is called Crossy Flappy Candy Clash Saga Royale).
- Make sure it's a game that can be completed (I generally don't recommend endless games as premium). You want the player walking away saying "Hey, that was worth the price of admission, I am happy."
- Zero IAP/ads/data requirements/elevated privileges (promote this in your App's description page).
- If you're going to do IAP, make them DLC's (extra/bonus chapters to the game).
- Consider that building premium games keeps you from having to compete with AAA companies in the free section (premium is a smaller piece of the App Store "pie", but it's also less competitive).
- Make sure it's polished, really polished.
I feel that the $0.99 premium apps are dying off. $0.99 apps, with no IAP aren't sustainable. There are a few games (aside from mine), that do well at the $0.99 mark:
- Desert Golfing
- Tiny Wings
- Papa's Freezeria To Go!
- Backflip Madness
- Sumotori Dreams
Try the games above out. I personally find it hard to pin down a pattern/common thread for these $0.99 games.
With regards to my own $0.99 games, they have very little production value (nice graphics, music, etc). So, I compensate by providing strong game mechanics, narrative, and bargain bin prices. The lack of production value keeps my games from being offered for anything more than $0.99. I don't want to go free, because I don't like ad/IAP supported games (and probably because I'm an idiot and an old fart set in my ways). Hopefully, as fewer and fewer premium apps go for the $0.99 price, I'll be able to raise my prices too.
I feel that $0.99 + IAP premium apps are also dying off. Plague Inc. has this model (and does a tasteful job of it), but the game has been around for a very long time (ie, an old app). There's also Heads Up! that takes this model of $0.99 + IAP (but has also been around for a very long time, ie, an old app). Peggle Classic is another $0.99 + IAP app (they took the DLC approach for Peggle Nights), this as also been aroudn for a very long time (ie, an old app).
Just go with a free app with IAP and a paid app at a higher price point. You'll get visibility in both App Store sections, which will lead to more people downloading your game (and hopefully more money).
This is the new $0.99 app. If you're going to do a premium app, at least start at this price point (and don't budge like I did). You can of course do IAP's also, but I'd still recommend just doing a free (with IAP) and a paid offering (w/o IAP).
I don't have any hard evidence (outside of anecdotal conversations with other indie devs), but most high quality premium apps are moving to this price point. In short, if a person is willing to pay for $1.99, they are about as willing to pay for a $2.99 app (ie, price elasticity is about the same between $1.99 and $2.99 apps). Here are some great indie games at this price point:
- You Must Build a Boat
- Hoplite
- The Five Nights at Freddy's series
Actually there are a lot of them. They are all serious games, with high production quality. This is what you generally want to shoot for if you want to go for a premium title.
Additionally, having a $2.99 price point lets you have some wiggle room for sales (without having to make the game free). So have a great App Store preview video, great screenshots, and conquer the world.
Aside:
I've been studying the App Store game market for three years now. There are simply people who buy games, and people that don't (it takes an immense amount of effort to get free users to "convert over"). The people browsing the premium market are already willing to pay upfront for an app. So don't sell yourself short if your quality is as good as other apps in that price range.
This is really above the peak price for indie games (unfortunately). So frankly, do $2.99 worth of work and then go make your next game. Going above the $2.99 is just a bad idea (unless you have an amazing team of 5+ people and an extremely well known brand).
Here are a few (large) indie shops in this category:
- Surgeon Simulator
- Monument Valley
- Transistor
- Badlands
- The Banner Saga
- Wayward Souls
- Monument Valley
- Prune
- Alto's Adventure
I'm really liking the brand/naming of "Free to Start". It gives you full disclosure at the beginning, so there is no surprise of a pay wall later on.
Kung Fury
If you haven't watched Kung Fury on YouTube, go do that now (better if you are under the influence). After you've watched the movie, go download the free game. After you've beaten chapter one, see how quickly you'll buy the rest of the chapters.
OPUS
This a great game that tugs at your heart strings when trying to get you to unlock the full game (something I do in A Noble Circle too). Try it out and see if it's something that feels genuine to you.
Hoplite (on Android)
This game is the "winner" with regards to doing Free to Start correctly. On iOS, Hoplite is a premium game with no Free + IAP offering. On Android, it's free with a very very well placed pay wall. By the time you hit the pay wall, you already know you'll enjoy the game and have no problem forking over the money to continue. Hoplite should provid a free offering on iOS too (as a companion to the paid version).
Aside from the specific games above, here are some general tips/observations for pricing your apps.
- Do not put your app on sale during holidays. Those are your highest revenue days/people are most willing to spend. You are (probably) too small to get any visibility during that time anyways (since all the AAA companies will be putting their stuff on sale, or release new blockbuster titles).
- Flash sales are good. Don't do it often; don't do it if you plan to release an update to your game within a quarter; avoid doing it if your rank is steady/rising; market the hell out of your flash sale. You're basically sacrificing revenue for rank/visibility and reviews.
- If you're going to play around with price/study your price elasticity, change your price only once per quarter and stick with it. You're not going to get a good picture of your price elasticity if you go with a time frame less than 90 days.
- Special event discounts are nice to do (one year anniversary, promotion for new IP, etc). Really only do this if you already have a good following/fan base.
- Make the IAP's in your game compelling and quantifiable. Removing ads isn't compelling, double generation of coins isn't quantifiable, "bag of coins" isn't quantifiable. Stick to obvious consumables items, DLC, permanent upgrades, or visual/novelty items.
That's my brain dump on pricing. Good luck!