I release my Scrabble word checker CheckWord about a month ago, for free, on the iTune App Store. I later released a significant update, which added a lot of new features – specifically word generation and annagrams. I kept this free, even though I’d put a lot of work into it, and several people told me they would pay for it – one guy even set me $10.
A week ago, I started to get daily “sales” figures, and saw that I was selling (at $0.00) around 2,000 copies a day. Meaning 2000 people EVERY DAY were finding my app interesting enough to download. I wondered how many of those would actually pay 99 cents for it.   Given the vast numbers of people who seemingly would pay 99 cents for a units converter, I figured maybe quite a few.  So I decided to experiment and see what would happen if I increased the price to 99 cents. I could always put it back later.
So I made the change in the evening of August 4th, and I’m not sure how long it too to filter through to the app store. But in the morning the change was made. I’d also got my first feedback in the form of a new review that said:
was free, now costs $$, super dumb
by k)smith
I hate devs that relase an app for free, then once it becomes slightly popular they start charging for it. If you wanted to make money off it, charge for it in the first place idiots
Hmm, not quite what I was hoping for. Still, interesting reaction. It annoyed me at first, but then I though that hey – that’s just one out of a few people who would have downloaded it for free. So k)smith is annoyed it’s not free any more – but what proportion of my my audience does he represent.
I then noticed something else interesting.  I was at position #30 in the “Top Paid Apps”, right up there with Scrabble at #27. Now I’m assuming this is because it ranks you based on your number of “sales”, regardless of if they were at $0.99 or $0.00. When I changed the price, I got my previous 30,000 (estimated) free “sales” as part of my ranking for paid sales. This is a bit misleading, and quite possibly something Apple will change. But it means I’ll be in the top 100 paid apps for several weeks if I keep the price there.
So now I wait, and see how much money I make in a day. If it drops down to ten copies or so, then I’ll probably make it free again. If it’s $100 a day, then I’ll probably keep charging for it, at least until demand dries up. Economics. Maybe I’ll make enough to cover the cost of my Mac Mini and spare iPhone, and enough to justify keep making improvements to CheckWord, and to release other utilities.
This actually does not seem like a terrible marketing strategy. You release an app for free, so thousands of people download it. They give it good reviews, and you get lots of word-of-mouth.  When you’ve got sufficient momentum, you up the price as much as the market will bear.  This is rather a novel scheme as it relies on having zero distribution costs, something that really only came about with the advent of the Apple App Store.
I suspect this “Introductory free pricing” scheme is show up more and more.
But now I’ve got to wait and see what “the market” for Scrabble word checkers thinks about my $0.99.
Day 1 (8/5/2008):
Sold 98 copies. That’s $68.60, probably in a bit less than 24 hours, as a few sales were reported at $0.00. If that keeps up, it’s $25,000 a year. Okay, seems like it’s worth letting this experiment continue! The first day might be an anomaly, so let’s see how it pans out over the course of the week.
The breakdown was:
US – 65
UK – 18
Canada – 9
Australia – 3
Korea – 2
New Zealand – 1
Another change was I dropped from #30 to #39 on the “Top Paid Apps” list. Perhaps that’s a rolling average of the last seven days or so. Scrabble is now at #30. I’ve also got a few more reviews, so criticizing my move to $0.99, and some defending it. Luckily these reviews don’t actually show up at the top of the list, as it defaults to “most helpful”.
Day 2 (8/6)
Sold 75 copies, down quite a bit, but still worth keeping up there.  Let’s give this a week, and see what the actual trend it. First two days may have unusual variance.
Day 3 (8/7)
58 – Down more, not looking too good.
Day 4 (8/8) Friday
61 – Up a bit, maybe it’s stabilized. Heck if I sell 60 a day,then that’s still, erm, 60*.70*365 = $15,330 a year. See how it does over the weekend – maybe all those weekend Scrabble players will give it a boost. I’ve now dropped off the top 100 paid apps, which is as it should be.
Day 5 (8/9) Saturday
56
Day 6 (8/10) Sunday
67
Week 1 (8/4 to 8/10)
US 286, UK 64, Canada 29, Australia 18, Rest of World: 31
Total for week = 428, average of 61 per day. And that’s with about a day as a free app.
So, what I decided to do was put out a free version of CheckWord that just has the Scrabble word checking function in there.  The full version will remain at $0.99, and hopefully enough people will continue to download the free version, and a portion of them will upgrade to the full version with word generation, anagrams and pattern matching.
The free version is now in the app store, so we’ll see how that works out.
Wow, great post. Really useful.
It’s interesting that free apps can get you into the top paid downloads lists once you give them a price.
Good luck :)
Comment by newretro — August 17, 2008 @ 3:06 am
Very interesting stuff. Good luck and keep these post coming!
Comment by Miguel — August 17, 2008 @ 6:11 am
I’d be very interested to know what happens if you up the cost to $4.97 (or similar) maybe try $1.99 to start with :)
Lovely article
Yes, please do keep the posts coming
Comment by Bob — August 27, 2008 @ 3:51 am
Very interesting article. Free is very nice, but free for some is not free for others, such as yourself. 99 cents is pretty good.
Comment by Joao Coelho — August 29, 2008 @ 7:29 am
nice one mick :D.
i’d say that “loss leaders” or ‘free for a limited time’ are pretty much standard marketing ploys though in other markets..
i guess you could even get some ‘nice artwork’ in and do the ‘pretty version’ for a higher price… like a car company might do :)
so the big question.. whats the follow up going to be ;)
Comment by davefb — September 4, 2008 @ 2:20 am
Hi Dave, yup, the “free for a limited time” is a nice simple ploy for effortless marketing.
Follow up requires me to stop being so lazy, so might take a while :)
Comment by Mick West — September 4, 2008 @ 6:44 am
So now you’re doing 61 sales @ $.99 on average, but perhaps you could sell 7 a day @ $9.99 and make more money. Heck, if you even find one who’ll buy it @ $99.99 each day you’ll make an even sweeter profit. It’s a kick in the nuts to those 1999-a-day who thought it was great when it was free, but who cares about them when you can make real money?
Comment by Johan — September 8, 2008 @ 5:14 am
any update mick ?
Comment by davefb — September 15, 2008 @ 1:08 am
Sales seem to have leveled off at around 100 per week. So it looks like I’ll have to look elsewhere to make my fortune :) Still, maybe the “long tail” will continue to trickle in. I just need lots of long tails.
You working on the iPhone Dave?
Comment by Mick West — September 15, 2008 @ 8:07 am
after i finish the ngage thing i’m working on, i’m porting it to iphone….
which i’m looking forward to…… or maybe not ( since the codebase is already port from brew to ds to ngage :-/ ).
was just wondering if there was a model for .99$ product with relatively low production values…
i guess it would start to be interesting if you could get 10 of these 100 sales a week products .
Comment by davefb — September 16, 2008 @ 12:03 am
Yeah, if you could do a new product every month, then after five years, you’d have sold 780,000 copies of 60 different games.
Of course, real life does not always quite work like that.
I’d also like to think that some of the products/games might be quite popular, making it a hit driven long tailed many headed monster.
Comment by Mick West — September 16, 2008 @ 6:32 am
My friends and I have been planning an app for app store, this post puts it in perspective. 100 sales a week as a “long tail” sounds pretty good to me!
Comment by Game Design Student — November 17, 2008 @ 8:26 am
Good grief, Mac users have too much money… why do they pay for something you can get for free online…
Comment by Brandon Thomson — February 1, 2009 @ 3:34 pm
erm, so they can have it in their pocket, quickly, and without an internet connection?
Comment by Mick West — February 1, 2009 @ 8:16 pm