Size Does Matter
January 28th, 2011
If you’ve been reading my blog for a long time (and if you have, I thank you), then you may recall I post I wrote about a year and a half ago called “My iPhone’s Not Cheap, but my Apps Are“. At the time, I was trying to find reasons why we were seeing a race to $0.99 on the App Store with the iPhone. One of the reasons I considered at the time was this:
3) Size Does Matter
As humans, we have a built-in instinct that bigger is better. Most people want a bigger house, more land, louder stereo, bigger lawn mowers, faster, larger cars, bigger TVs. For some reason it seems to be ingrained in our brains bigger things are more valuable.
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I believe that because the games are played on the tiny iPhone, it reduces the perceived value to the customer. Why else am I willing to spend $15 on a game that I play on my TV that I wouldn’t pay $5 for on the iPhone?
But I didn’t really have any proof to back it up; it was just a suspicion I had. However, lately I’ve been reading a lot of books on behavioural psychology, and behavioural economics. It’s a subject that I’ve discovered I’m absolutely fascinated by, and makes me wish I’d done a psych minor in school. But I digress…
The book I’m currently reading is called “Influence: The Psychology of Persuasion” by Robert B. Cialdini. The current chapter is about how the appearance of authority causes us to react to things differently. However, he mentioned, almost in passing, a study done in 1952 by Dukes and Bevan about the way in which the perceived importance of something affects people’s perception of its physical size [1]. Objects that were thought to be more important were perceived as physically larger than objects that were attached less importance, even though they were exactly the same size!
However, what I found fascinating is that the same thing holds in reverse. The brain works the other way too: objects that are physically larger are perceived as having a higher status than small ones.
I believe that this is part of what drives the price of iPhone apps down. A game played on a small screen is perceived to be less important than the same game played on a large screen. I further believe that this is why we see the same game on the iPad listed at a higher price, yet people are willing to pay it. For example, Angry Birds is $0.99 on the iPhone, but $4.99 on the iPad. It’s the same game, but on a bigger screen. Back in the depths of our brains, something is clicking, saying “well Angry Birds is bigger on the iPad, so it must be more important.”
Now, I’m am sure that there are many other factors, psychological and otherwise, that play into the price points of apps on the store, but I believe this is a big part of it. And it’s nice to have a study to back it up. 
Owen
[1] Robert Cialdini, “Influence: The Psychology of Persuasion” (New York: HarperCollins) 223.
Check out the book ‘Predictably Irrational’ by Dan Ariely (also in audiobook). It’s very enlightening and covers a lot of psychology surrounding perception of value and pricing.
Hi Owen,
yes when it comes to games, people spend $110+ to get the latest games for their consoles but when it comes to iOS, they will not want to even spend a dollar.
But then the fact that there are some really professional games or entertaining games released for free or offered at $.99, why would someone buy a game for $15??
The bar and the market rates have been set for the iTunes store (Market Equilibrium) now to increase that to a higher rate is next to impossible, in fact this is also affecting the Mac App store, people are expecting the Mac App store to be in a similar range.
The difference between the iPad and the iPhone is simply explained by the fact that the people that have purchased iPads are the ones that can afford, so the market kind of set the equilibrium again. I do not think that it is the matter of size. Those with the iPads had to download something to show people on their all important devices. Running an iPhone app that runs at 2x or 1x is not exactly impressive.
I have tried Angry Birds on the 27″ and the 21.5″ iMacs and I guess I am more impressed with the iPhone version coz I can play it whereever and whenever.
well, that is my take on the matter…\\cheers,
Jayant C Varma
@Shane – “Predictably Irrational” was the book I read right before this one.
Some other ones I’ve read recently that are excellent: “How We Decide” by Jonah Lehrer, and “What the Dog Saw” by Malcom Gladwell.
@Jayant – Like I said, I think size is only one of the factors at work here. What you’re describing is another part of it, which is related to the principle of “anchoring” in behavioural economics (see “Predictably Irrational” for more information).
That is, once we consider buying something at a given price, we make all future related purchasing decisions relative to that first one. So if we look at the App Store and see $0.99 game and buy it, then the next time we buy a game on the App Store, we’re comparing the price mentally to that first purchase at $0.99.
I have a different take. In my opinion, the barrier to produce a game is lower than ever before. More people have access to computers. The internet makes finding partners, resources, and education easier than ever before. The tools now cost hundrends of dollars or are free. The process to create a game is better understood. Access to customers and means to process payment are solved problems.
If you accept all of the above it follows that there will be a great many more games on the market than in the past, and supply & demand tells us that more competition will drive down prices.
Now take a look at, say, the XBLA marketplace. While many of the developments I touched on above still apply there are a few key differences. Most important among them is that it’s a managed portfolio that only a handful of games can enter each year. So my theory is, the harder it is to enter a market the higher the average price will be for your game.
Thought provoking post! I’m not a psychologist but I did study sociology, however this is not an educated opinion or study, just my thoughts while I read your blog.
While I read it the words “mass psychology” inevitably flew around my mind. While a certain individual cannot be predicted how he will act, when in masses there are safe predictions you can make. iPhone is a trend. It’s a status “relic” both social and economic. just like most gadgets and cars. You couldn’t possibly persuade an individual paying such an amount (unless he was rich) for a device that doesn’t really offer that much. Unless it was a trend.
I think that the reason we hesitate to pay 3$ for an iPhone game is because the first apps were sold at .99 If at the launch of Appstore the price for an app was 1.99 things would have been different for the devs (and for Apple as well because it would go over the 1$ psychological barrier). I think when you price a game at 5$ the consumer is confused. He is used to seeing iOS games as “apps” not actual games. The .99 set price (in line with the trend) justifies impulse buys. It’s an 1$ “app”. The 5$ makes it more of a “game” (moving further away from the established trend). The critic thinking goes from “it looks cute” to “What about the support/levels/time I’ll have to invest in it?”
Sheesh what a long reply. Anyway I do have to cook as well so in a nutshell:
Don’t compare to AAA xbox titles at 60$ because it’s a wrong unfair price, maybe not from a devs point of view but certaintly from a gamers point of view. That’s one of the reasons I think the indie community grew the last years. Artistic freedom leading to innovative ideas but also the cheaper price which seems “just” in the eyes of a gamer.
*off to make some pasta and will read the rest of your blog while eating*
Cheers and good luck!
Hi Owen. I too find myself considering more expensive apps as “premium” although this has often not been the reality. I purchase mostly “Business” apps and find myself thinking that a higher price means better software and support. This was the case with Omnigraffle for the iPad for sure! But more important are other customer ratings. If it’s received great ratings and comments, and it’s more expensive than other, less well reviewed apps, it’s more appealing. Funny thing is, even if an app is less expensive and equally well reviewed as a more expensive app that does the same thing, I’m inclined to buy the more expensive one.
Norm
I believe you may be partly right. But really I think there are more important factors at play.
One key difference between platforms to consider is time. A game has more perceived value the longer we spend with it. The nature of the gaming on the phone is, on the whole, limited. Generally the phone is not used as a gaming platform but more a way to kill some time while waiting to do something else. Now when we transport those same games to a device that’s more conducive to longer play a greater value is assigned as you feel you will play them more often and at greater length.
Another aspect of added value the iPad version of mobile games garner is that of sociability. Yes, playing on a tablet still a personal experience but it’s much easier, and more likely, that someone will be shoulder surfing your game on an iPad versus as it’s diminutive counterpart. So while this aspect is indeed related to size, the key takeaway is that it may not be due to some ingrained “bigger is better” mentality but may actually be based on really added value.
Dan