Held in Austria, it's basically a bunch of boozehounds that show off their cocktail-mixing robots. The best of the creations appear in the two in the videos below, which force you to play Mario or Tetris, with the sort of cocktail the robot mixes you dependent on how you play the games. Slow and steady wins the race, in my books, but what would that earn me? [Roboexotica via Kotaku]

Image Credit: MattDork

The Tetris chair comes in the more traditional multi-colored design as well as a mono-chrome version, but both look absolutely fantastic in a kitschy way. I just worry about the thing going poof when you sit in it and complete the gap. [Corofloat via Gearfuse via Neatorama]

The App Store is a strange new place for developers. Veterans and newcomers engage in bareknuckle combat, driving prices down to levels people wouldn't have imagined charging just a few years ago. Margins drop to razor-thin levels while customers expect apps to get cheaper and cheaper, but with ever increasing quality and depth.

For developers, for other software platforms and potentially for the increasingly fickle customers themselves, it's uncharted, and treacherous, territory. But the most bizarre thing of all is—in an effort to keep people in the App Store, and to prevent competitors from getting a toehold in the mobile app business—Apple's charting a course straight into it.

"The App Store is a very competitive environment," says Caroline Hu Flexer, co-founder of Duck Duck Moose, an indie developer of children's edutainment apps like Itsy Bitsy Spider. "As an independent developer without a large PR budget or well-known brands, it can be very challenging, and you're pretty much at the mercy of Apple."

The Problem

Most iPhone apps had no life before the App Store, and currently have no life outside it. But with those that did, you start to see a pattern. App prices could reasonably be expected to fall over time—an older game is worth less to customers than a newer game, and with other types of software, a late-stage price drop is a great way to scoop up late adopters. What's strange, though, is how prices dramatically collapse after hitting Apple's store.

Two weeks ago we flagged some bizarre differences in pricing between equivalent PSP and iPhone games. Big titles, like Tetris and Fieldrunners, were inexplicably cheaper on the iPhone, even in cases where it was executed better. This didn't make a whole lot of sense. As it turns out, it had nothing to do with Sony and the PSP, and everything to do with the App Store.

As you can see in the chart above, many apps and services take a price dip in the App Store. Zagat's premium To Go guides cost a healthy $4/month for Windows Mobile phones, but sell for just $10/year on the iPhone. CoPilot 7, a navigation app, used to set you back a full $200 on a Microsoft-badged device (later lowered to $100); the much-improved version 8 sells in the App Store for a measly $35 today. The premium version of WeatherBug runs $5 for people who happened to buy BlackBerry's touchscreen phone, but just $1 for anyone who bought Apple's. VR+ voice recorder, a full-featured dictaphone app, runs $30 on BlackBerry, and an incredible $2 in the App Store. So how can this little App Store, itself a subsection of the iTunes store, squeeze so many developers to the point of near-suffocation?

Update: The BlackBerry Weatherbug app boasts a few extra features over the iPhone app, including push notifications. This accounts for some of the price difference

The Economy

Some of this is pure Econ 101: The store serves a massive, captive audience that's pre-trained to spend money in iTunes. The promise of higher volume makes it easier for developers to lower prices, which they use, along with interesting features and clever marketing, to set themselves apart from the competition.

If things work out just right, the App Store can move a lot of software for you. Spread your lower margins over tens of thousands of sales, and your $2 app could make just as much, if not more, than your old, slower-selling $30 app did. The App Store recently passed the 2-billion-download mark, and there are likely well over 50 million App-Store-ready devices in peoples' hands right now. A vast majority of these downloads—averaging an insane 35 per device—will likely have been free. Only Apple knows just how many. But even if just 5% of the 2 billion downloads were paid for, that's one hell of a market.

It's true that prices are falling as more and more iPhone and iPod Touch owners enter the market. But prices won't stop falling. And more and more developers from all over the world are submitting apps, too, so fewer devs are guaranteed visibility. Not all of the people investing time and money in their products are reaping the return they (reasonably!) expected.

Newsweek's exposé on the end of easy money at the App Store goes a long way toward making the case against going all-in as an iPhone dev. Not only are development costs high, while success appears to be basically randomized. But the story doesn't explain exactly what happened to make the situation so grim.

The Culture

Giz stories rage about app prices all the time, and in your own private way, so do most of you. Buying $1 songs and $2 TV shows has given us an expectation that apps should be cheap, no matter what their use. The glut of free apps you see filling out the app charts every day doesn't help either. Software is worth less to us now, even though we use it more.

I spoke with Steve Andler of Networks In Motion, the company that makes Gokivo. It's an app that we savaged for its introductory price of $10 a month, which then dropped to $5 a month a few weeks ago.

Andler explained reaching the unrealistically low costs with one thing: diminished features. Their app pulls up-to-date map, traffic and POI data from NIM's servers in real time, meaning that—beyond developer costs—they have to constantly pay for new, fresh data to pass on to their customers. But even at $5 a month, it's just about impossible for Gokivo to compete with an app like MotionX GPS Drive, which is $3 a month, or $25 per year.

Andler says there are subtle differences in services offered, which is true—MotionX, for example, doesn't yet read street names aloud when it gives you directions—but your average user probably doesn't know this, and there's a good chance MotionX might add it in an update later on, as their market share and revenues grow. But the damage is done. The app-buying customer is spoiled: As far as we are concerned, turn-by-turn GPS apps should now cost no more than $3 a month, period. This is the new retail, and it's weird.

Loren Brichter, father of Tweetie, is used to getting yelled at by jaded app shoppers. He's charging $3 for Tweetie 2, an update—but a whole new version, really—of his well-established Twitter app. Offering the software as a free upgrade isn't realistic for him:

I priced Tweetie at $2.99 not based on how much work I put into it (it would have been more), or to try and undercut other apps (it would have been less), but simply because I felt like $2.99 was a reasonable price to pay for a Twitter client. Impulse purchase, but not bargain-basement. I never liked playing pricing games either—a popular pastime of other App Store devs. It's always been $2.99, and will probably always be $2.99.

His decision wasn't easy. And even though his app is the darling of the tech press, and has hundreds of great user reviews, he's being lambasted for charging three measly dollars for a high-quality app that people will use again and again and again. Before the App Store, a complaint this petty wouldn't have even made sense.

Apple

From the outside, it appears that Apple is encouraging a race to the bottom. The top 10 lists in each App Store category—one of the only ways for an app to get any meaningful amount of iTunes visibility—are almost exclusively the territory of low-priced impulse buys, and are hard to cling onto for more than a few weeks at time. Flexer, of Duck Duck Moose, says she's experienced it firsthand:

The ranking by volume (as opposed to revenue) on the App Store seems to drive the prices of apps down. Aside from being featured by Apple, exposure of an app is dependent on its ranking in the top lists, so developers lower prices to obtain a higher ranking.

This is echoed and amplified by the makers of Twitterific, an app that, in a bid to stay competitive, saw its price fall from $10 to $4, despite active development and a growing featureset:

While these changes represent perks for users, it also means that sustaining profitability for a given piece of software in the App Store is nearly impossible unless you have a break-away hit.

And if things don't change?

Myself and others like me will have no choice but to focus our development efforts elsewhere.

With yesterday's announcement that Apple is allowing free apps to include in-app purchases, things just got even more tumultuous. Depending on how this is handled, the top "free" apps could all be paid apps in disguise. Either that or the paid app rankings will be dominated by free-on-a-trial-basis teasers. In either case, the rankings open themselves up for opportunistic abuse, and the highest goal for any honest, talented app developer—to just crack that list—just became more uncertain.

This is disastrous for developers, even if it's mostly incidental, and a function of Apple trying to sell apps like they've been selling music for years, despite a totally different set of product types and customer needs. But Apple's effect on pricing goes well beyond incidental. At least in some cases, Apple calls the shots.

A high-profile dev team that has sold a number of apps in the store since the earliest of days, and who accordingly wishes to stay anonymous, told us as much. When they approached Apple with their first app, they had a price in mind. Apple told them it was too high, and that they'd need to cut it to succeed. They chopped it in half. Even then, Apple told them to "be careful."

This company made out fine, since they were in a position to adapt. However, to play the volume game, they had to restructure their entire philosophy around a pricing structure that, just months before, would've seemed ridiculous.

With over 2 billion data points to graph and filter to their heart's content, Apple understands the App Store climate better than anyone else possibly can. As such, their advice is probably golden. Which is okay if you're a relatively nimble, single-purpose company, and you can afford to risk restructuring everything you do around their store, and your costs can be covered at whatever price you evidently need to set to sell at a certain volume. But you'll just want to keep in mind that their advice is self-interested. Apple wants cheap apps, to keep people buying them, and to keep other stores firmly in the second tier—and they're not afraid to say it. From Apple's last quarterly report to investors, a line they've been echoing since the store opened:

[Apple] also expects competition to intensify as competitors attempt to imitate the Company's approach to providing [digital app distribution] seamlessly within their individual offerings or work collaboratively to offer integrated solutions...While the Company is widely recognized as a leading innovator in the personal computer and consumer electronics markets as well as a leader in the emerging market for distribution of third-party digital content and applications, these markets are highly competitive and subject to aggressive pricing.

You don't need to look back any further than the launch of the iTunes music store to see an Apple that will do everything it can to push other peoples' prices down for their benefit. Of course, they can't really fix prices for apps—they're not songs or movies, and each one does something different—but they can nudge like hell.

What Happens Now

So what does the App Store Effect mean, right now? In the short term, we'll get lower prices. This is great. But in the long term, it might not be sustainable.

The promise that sales volume will make up for the rock-bottom prices you need to charge just to be seen in your app category seems increasingly hollow, and to put it bluntly, if developers don't have a chance in hell of recouping their fees, they'll stop trying. And I'm not talking about 99-cent iFart app spammers here—I'm talking about big players who already make money selling software. If the navigation companies, the big game studios and the premium content providers can't thrive in the App Store, they'll have to leave; even playing in Apple's sandbox threatens and undercut their (sometimes much more crucial) product lines elsewhere.

And don't forget, Palm and Android fans, this App Store Effect sends ripples well beyond the App Store. Customers expect to see functionally identical apps priced the same way across platforms, because to us, that's what makes sense. Can devs really afford to port an app to the webOS to sell to the tens of thousands of Pre owners, when they're expected to tag it with iPhone prices, calculated for a base of millions? Whether by Apple's design or totally by accident, everyone who doesn't own an iPhone will suffer for it.

The App Store Effect illustrates a new kind of economy, and it's not going to go away. In fact, it's going to get worse. Developers will either adapt, die or leave. But where will they go? Until there are 50 million Android handsets and 50 million Pre offspring out there, the rest of the mobile software world is pretty much screwed.

The skaters spin through nearly pitch black streets, donning glowing wireframe Tetris blocks for a hats. And then, at the last moment, they need to negotiate just how they'll fit with all those other Tetris block heads on wheels.

But...as long as no one was hurt...we wouldn't mind seeing the effect recreated in an empty swimming pool. [TechEBlog via technabob]

Some of us managed to survive boring high school math lessons by playing Tetris on TI-89 calculators, yet we can't get more than 30 seconds on a Pre for another month? I understand that it's a demo, and that by now everyone and their dog knows how to play Tetris, but this doesn't even qualify as a teaser.

30 seconds is pointless for a demo of any kind, on any platform. What are you supposed to do? Get acquainted with the splash screen? Such a short period of app usage or game play isn't going to going to get anyone who wasn't already interested in the full version any more excited about it.

Dear EA, please give us a demo that actually demonstrates something other than the fact that brevity isn't always wit. Actually, screw the demo. Just give us the game already. [iSmashPhone]

This is the second part of the research. The previous one—from 1992—showed how some brain parts used less glucose as the subjects get more experienced with the game. This new study—which has been paid by the marketing company for Tetris, but peer-reviewed. and published by the journal BMC Research Notes—uses new, more precise imaging techniques to check for brain changes. The target population was adolescent girls, during a three month period. According to Haier, adolescent girls' brains are still developing. Obviously, boys' brains stop functioning properly around age ten.

The study found that the parts in blue where more efficient, while the ones in red got thicker, and stronger, resulting in a more agile, powerful game. [Discover via Neatorama]

In honor of the only game to be branded with "FROM RUSSIA WITH FUN!", let's all take a minute to let the Tetris theme song burrow its way into our brains one more time.

The image associated with this post is best viewed using a browser.

Regardless of what countless lost games of Tetris may have taught you, these iconic shapes actually fit together very well. Their intrinsically flexible, modular design makes all sorts of sense to squeeze in an extra few cubbyholes or even, as Silvério and Filipov explore in the gallery below, the occasional drawer.

It's too bad these designs are just concepts, but you know the drill. Cry enough in the comments and maybe Target will realize that they can make a few bucks by licensing or just ripping off the design. [coroflot via walyou]

Oh, who are we kidding? You have a crappy office job (whether you make a lot of money or not) that doesn't allow you to sit around and play video games in your underwear all day. And nothing about these $25 polyester gaming ties can change that.

But you know what works? Sneak a DS into your desk drawer and take really long bathroom breaks. [Amazon via OhGizmo!]

Some updates we'd like to see in a 1.1 version include line completion animation and the ability to rotate pieces before they are wholly on screen (whether or not this is an official break of Tetris rules, tapping just doesn't do the job when you are stacked high on the board). Still, very, very solid showing. Here's a clip of the game in motion that, as the pre-pubescent voice will reveal, we did not record:Quick! Everyone download it before EA and Russia team up to sue the developer! [Tris]

The Price: $9.99

The Verdict: Tetris isn't exactly the most ambitious project for a company like EA Games. That's probably why the company's iPhone port is just, well, overdone. A good Tetris implementation - one that would have been wildly successful on its own - wasn't enough for EA, who've loaded this port up with so much crap that it sometimes doesn't even run. EA obviously wanted to use a bit of the iPhone's rendering capabilities, but the graphics are gaudy to the point of distraction. Starting or resuming a basic game takes quite a while because of the layers of menus and loading screens, and the secondary gameplay modes and Magic Mode tools will be ignored by most. On our 3G iPhone, the app would often freeze at startup, a problem that has been reported elsewhere among iPhone and iPod owners. An update is forthcoming that should address stability issues as well as introduce a feature that allows you to draw your upcoming shape directly.

These inspired features, though, are sullied by the showy, buggy execution. Anyone looking for a simple, clean port like Tris (from the jailbreak days. See you soon, Tris...) should probably pass on this $9.99 monster as you can expect a decent competitor to pop up at a lower price point, if not for free. Also, there are already web apps that offer a traditional (though gestureless) Tetris experience in your browser that don't have a 40 second startup time. One more sticky point: if you exit out of the game to check email or take a call and return, it will save your game state. But to start playing again you have to sit through 10 seconds of the intro movie. Freaking annoying and a waste of battery.

[iPhone App Marathon Review]