Top Grossing App chart - be careful what you wish for

This article is a guest contribution from Markus Nigrin of Windmill Apps (pictured).

There's been a lot of debate this week about the ranking system used for the App Store chart.

Currently, the chart position of an app is mostly influenced by the number of copies sold every day, no matter what the price of a copy is.

This seems unfair to many developers. Of course a $0.99 app sells more units than a more expensive one, so those developers who think they can charge more than $0.99 aren't doing it, because they think they won't be able to get into the charts.

Big publishers have also started to join the low-price ranks by peggling(TM) the prices of their apps down to $0.99 when they start to drop out of the charts, thus preventing new apps rising to the top.

While I agree the current system is not perfect, I really think people, especially independent developers, underestimate the dangers of changing it.

Big brand publishers like EA have a natural advantage when it comes to charging a higher price: customers trust the high quality games they get from them. That is the key reason to invest millions of dollars to build a brand to begin with. And it certainly works with the average customer, so these companies will get more customers paying a certain price than the average independent.

Indeed, it's mainly these publishers who are in the Top 100 with higher priced games now.

In the revenue-chart rank scenario, I see nothing less than the first top 50 of the chart ranks being dominated by those very publishers the small independent developers would like to see harnessed.

On top of that, we're forgetting that a low price is THE key element of getting visibility in a crowded market. I can't see why altering the chart system should change that.

With 70,000 apps and counting released, there will always be independents waiting for you to raise your price. You can encourage developers to charge more, but in a very competitive space, the Walmart approach typically wins.

In my humble opinion, the scenario I foresee if Apple alters the chart ranking system is that independent developers going for the broad audience will still mostly compete with low prices but with a much lower chance of making it into the charts.

Landing a top ten hit might get much harder.

I clearly prefer a scenario where an independent developer with a unique idea and two months development time has a shot at the top ten.

Lastly, I want to state something we all tend to forget.

The success of the App Store is not yet understood in detail. Personally I believe it was the flood of high-quality low cost games that put Apple, and us, into this amazing position.

I think Apple should ride that wave. It's constantly broadening the user base and I would prefer to build a sustainable business on the unexpected mass purchase behaviour we see on the App Store now than artificial regulation.

And, yes, I've heard the "You can not build a sustainable business with $0.99 apps" argument many times and I would like to state that is not necessarily true in a fast growing mass market.

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In 1998, Markus started his first company, Silverwire, which provided in-store and online photo service solutions to retailers. He grew Silverwire into a profitable business with 76 employees before selling it to HP nine years later. After moving to San Diego and working as director at HP for three years, he left and started Windmill Apps in February 2009. It creates mobile applications for iPhone, Android and Blackberry. You can follow Marcus on his blog and via twitter: @markusn