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You sell your app for 1.99 and get a bunch of customers, who speak to other people and in time sales in this particular market start to slow down considerably. At this point you increase the price to make up for lost revenue on new sales. Then after sales start going under a threshold of popularity, you come out with a free version to appease markets that have been untouched by your project yet, but it also happens to have the massive effect of a new type of consumer that's more concerned with the expected vale vs real money value is now interested in your app. Some of them will buy the 2.99 version, but most will probably not. Then you come out with a sale, and boom it's now in reach for all those people that though 3 dollars was too much. Now you have massive sales and publicity, and when it starts to slow down you're back to increasing the price.

Then comes a time where there are no new markets to exploit, so you build a a new app or a continuation of the old one, a sequel. At this time you also lower the price to 0.99 just to make sure you have the most exposure possible. Only now you have the advantage of past and present publicity and if rightly timed, momentum... And then off course you repeat the formula depending on your market and the viability of your app.

Yep that's a great summary.

"Then comes a time where there are no new markets to exploit"

The crazy thing with iOS development is that there are 250k new users every day who are always looking for a few apps to put on their new phone, which is how a game like Angry Birds can stay high in the charts for months.

Oh yeah totally right, but there comes a time where no matter what you do, you're going to keep making less and less money out of the game because even though there are 250k new users ever day, the people that where interested in buying your app have already done so, and now only the passerby's and window-shoppers of the iOS world are looking at your app.

The cool thing is that now that you've been the developer of Trainyard, when you do reach a point where you should be releasing a new game, you have gotten so much credibility it isn't even funny. And off course that translate to more immediate sales at the beginning and a big chunk of extra steady clash flow at the end.

Yep, and I now have 2 million (!) downloads of the free version, Trainyard Express. That's a huge base of users I can reach when I eventually release a new game or a new feature in Trainyard. I go into a little more detail about the stuff that happened this week here: http://struct.ca/2010/the-week-that-was

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