The iPhone App Store just turned one, and developers are getting the hang of the device. Game companies like EA and Namco are starting specialized divisions just to target the iPhone. Apps are about to get good, right? Not exactly.
Here's the major reason: the price of apps. AppCubby maker of apps like GasCubby, just put up an analysis of the app store that says the new price ceiling is $5. It used to be $10. But according to him and other developers, the $10 price point is no longer sustainable, seeing as many previously $10-priced apps are now $3-$5.
There probably are two major co-existing reasons for the drop. One, older apps get price drops to lure in cheapskates. People who wanted them already bought them, and people who are holdouts will only jump on when the price is lowered. Two, older apps just get dropped because older titles (see Best Buy) get price drops.
But back to the main point. If $5 is the new standard price ceiling, developers aren't going to be willing to devote time to their projects. It's as Craig Hockenberry of Twitterific argued: bigger projects need a bigger payoff, but if those developers price their apps too high, there won't be enough income to make those projects worthwhile.
There's no easy solution to this, which means that iPhone users shouldn't expect much more complicated games than what's already on there now. All the talk of the iPhone competing with the DS or the PSP in terms of quality may be moot if there's nobody there to spend the effort developing that level of games. [AppCubby]