Data & Research

App Store Analysis: Black Friday special

The price cuts don't work. They only hurt

App Store Analysis: Black Friday special
So called because it kicks off the Christmas selling season that will get US retailers into profit - or the black - for the year, Black Friday now has another negative meaning for iPhone publishers.

Unlike the malls, where American shoppers fall under the influence of the sales signs and partake in impulse buys they will regret later, the frictionless honesty of the digital goods mall that is the App Store has proved much less encouraging in terms of creating new hits.

Not that it's stopped developers and publishers slashing the prices of their wares.

It seems that almost everyone has cut the price of something: alas to little seeming avail.

Of course, it could be argued that if everyone is doing it, you'll be left as the odd one out if you don't follow suit. Those of a stronger disposition will point out however, that the only real reason for anyone to cut the price of virtual goods (that are not taking up space in a warehouse as with traditional retailers), is that the increased volume of sales overcomes the cut in price i.e. creates increased profits.

And on that basis, the only companies who should be celebrating their Black Friday performance are EA Mobile and Gameloft; the very two companies who week-on-week are tightening their strangehold on the normal-priced App Store.

Of course, please email me details if you have been celebrating. I would love to know. The publicly available data says otherwise though.

Cut price, cut wrists

Looking at the US Top 100 charts for Paid and Top Grossing games, we see that 28 and 26 games respectively in each chart received Black Friday price cuts.

This seems impressive, but there are few examples of games publishers (aside from EA or Gameloft, and certainly not indie developers), who can clearly be said to have become more profitable because of these price cuts.

Konami's Metal Gear Solid Touch (cut from $5.99 to 99c) and Namco's Pac-Man ($4.99 to $2.99) may have qualified, but both cases seem marginal.

In fact, many of the games that have been performing well this week have done so without the benefit of pricing magic.

IUGO's Implode! ($1.99) has been shooting up the charts, thanks to Apple Featured status, while Activision's Call of Duty: World at War: Zombies remains the #1 Top Grossing game thanks to its $9.99 price.

And, Chillingo - a publisher previously best known for its cheap games - has also found success with relatively expensive titles: both Ice Age ($4.99) and Ravensword ($6.99) are in the Top Grossing top 20.

Even Gameloft, which slashed the prices of many of its games, kept new releases, The Settlers and Skate Nation, priced at $6.99, with both in the Top Grossing top 25.

Down, down, deeper and down

When we consider the average price of games this week compared to the previous App Store Analysis (16th November), the effect of the Black Friday pricing is clear to see.

Obviously, the result in terms of the number of games at each price point - shown here in the case of the Paid Top 100 - is a large shift from prices such as $9.99 and $4.99 to $2.99 and 99c.



The average price of the US Top 100 paid chart is down from $2.90 to $2.56, down 13 percent.

The average price of the US Top Grossing Top 100 chart is down from $4.82 to $3.99, down 17 percent.

Of course, we can't tell what the difference in total chart revenue is between the two weeks, and it could have been up over 20 percent, justifying the sales, but this doesn't mean that every sale game will have made money.

As with all charts, there will be a few hits and a lot of misses.

Top Grossing fall

Similarly, looking at the distribution of average prices through the US Top Grossing Top 100, it can be clearly seen that all but three slots have seen a price decrease.

Some of these are very large: notably in the 11-20 slot.



This was due to the re-entry of 99c sale games such as Shrek Kart and Brothers in Arms: Hour of Heroes from Gameloft.

To the rich, more riches

What's most frightening about the Black Friday charts however is the way EA Mobile and Gameloft have used this opportunity to increase their domination of the App Store.

Thanks to their brands, as well their ability to price games at the vital $4.99+ price points (thus providing decent sale opportunities for consumers when prices are cut), both companies have increased the number of games they have in each chart.

So instead of their combined rule-of-thumb ownership of a quarter of the charts, this week they have a combined total of a third; albeit at the price of a much reduced average price for their games.

More significantly though, EA had 9 out of the top 20 Top Grossing games. So much for the power of the indies.



Once again, Glu Mobile has done well with four games in both charts; again something that demonstrates the power of brands.

It's also interesting to see Chillingo's new philosophy of high quality, high priced games is working with original IP Ravensword selling strongely, while movie tie-in Ice Age appears to be doing well too.

Longterm App Store success stories such as PopCap and Tapulous complete the list of publishers who have three or more games in either the Top 100 Paid or Top Grossing charts.

Notably, neither PopCap or Tapulous cut the price of their games this week, and while Chillingo cut the price of Defender Chronicles from $3.99 to 99c, it only scraped into the Paid Top 100 at #97.

Contributing Editor

A Pocket Gamer co-founder, Jon is Contributing Editor at PG.biz which means he acts like a slightly confused uncle who's forgotten where he's left his glasses. As well as letters and cameras, he likes imaginary numbers and legumes.