When you're trying to kick-start your tablet platform, apps are everything, so why has Microsoft decided to opt out of the most common price point in recent years: the $0.99 app? Confirmation this weekend that Windows 8 and Windows RT users would be offered paid apps as well as free (unsurprising) and that developers would be able to price their wares from $1.49 to $999.99 (surprising) is a distinct departure from Apple and Google's strategy. According to the stereotypes, iOS users love paying for apps while Android users only download free ones (or steal them until the apps are made free out of exasperation), but what do Windows tablet owners do?
Microsoft makes no mention of the thinking behind the price tiers, though there are a couple of assumptions we could make. The first is purely motivated by greed: Microsoft gets 30-percent of each paid app sale (dropping to 20-percent should the app make more than $25,000). If a developer wants to make money from their software but opts for the lowest possible price to encourage downloads, Microsoft will take away $0.45 on a $1.49 purchase, versus $0.30 on a $0.99 app.
If that were entirely the case, though, then you might expect Windows Phone to also kick off with the $1.49 tier, and yet on Microsoft's smartphone platform there are $0.99 apps. Perhaps, then, Microsoft simply believes that tablet apps should be more expensive than phone apps, reflecting some greater expectation of functionality in software designed for the bigger screen.
Such an expectation holds true for developers as much as users: Microsoft could be trying to gently persuade Windows 8/RT coders to up their game when they create tablet apps for the platform, and to stretch a little further than they might for a relatively "throwaway" dollar app. Similarly, users could grow to expect more from the software they buy, with the $1.49 price point acting as a mental graduation up from the assumptions made around cheaper software (even if that cheaper price point isn't even available on that particular platform).
[aquote]Could Microsoft be taking a moral stand?[/aquote]
Still, is it too much to hope that Microsoft might be taking a moral stand of sorts, and suggesting that it believes software simply should be more expensive? Plenty of developers have grown disillusioned with the app ecosystem and its race to ninety-nine cents, and while some software is certainly disposable enough to make the price tag fit, other coders find themselves stuck facing either devaluing their hard work with a price that will get attention, and asking a little more and ending up ignored.
The reality is likely a combination of the three: a healthy dose of self interest and, yes, the preoccupation that, as primarily a software company itself, seeing apps undervalued doesn't bode well for the long-term. It's a potentially dangerous strategy given Microsoft's position near the back of the tablet race, but it could be the wildcard that prompts developers to give Windows a second look.