Apart from our desire to see the iPhone and iPod touch succeed and grow in popularity, we normally don’t care too much about the marketing of these devices, their accessories, or their software, so long as that marketing is honest. But after recent conversations with third-party iPhone OS game developers, it’s obvious to us that the future growth of these devices as gaming platforms is going to depend not just on Apple’s future hardware and software innovations, but on a real change in the way that developers conceive of and market their titles to iPod touch and iPhone gamers. In short, many game makers have become myopically focused on the App Store—specifically its Top 100 lists—as the primary selling tool for their titles, a choice that is seriously undermining the scope of the games for the iPhone OS platform, and whatever business plans major companies might have had to do better on it.

The key problem is this: top 100 sales lists are supposed to reflect reality rather than shaping it, and to the extent that they only reflect a slice of reality at a moment—unit sales for a given hour or less of time—they present a distorted picture that developers shouldn’t be relying upon for anything. Particularly on a nascent platform, a list of what people have actually purchased does not necessarily reflect what they would be willing to purchase going forward, yet many developers now see Apple’s App Store sales charts as both guides to what they should be making, and the key driver of additional sales to their titles. It is accepted wisdom at this point that getting on Apple’s paid top 100 apps list is key to driving incremental sales of titles. Get on there and your game sells itself, developers say; fall off the list and you’re in trouble. Thus, if $1 fart apps and idiot tests are on that list, no matter how stupid they are, you can be certain that there are developers out there—even major ones—who are looking at these as examples of what to do going forward, either generally or specifically.

It would be hard to fully explain the folly of this perspective in a brief article like this one, but we’ll try to provide a short and sweet explanation of why it’s both wrong and dangerous for the long-term, even if it in some way reflects part of reality at the present moment. In the traditional video game world, there’s a company called NPD that puts out a somewhat eye-popping list of actual game sales statistics in the United States. We say “eye-popping” because the games people think are hugely successful are often revealed to have sold way too few units to qualify even as modest hits; in some cases, games with massive budgets sell so few units that they represent massive losses for their developers. NPD’s lists aren’t published for the average person’s consumption, but if you wanted to know why a company like Midway Games could go from a massive success story in the 1980s and 1990s to a bankrupt fire sale acquisition in 2009, the NPD charts would explain a lot: the sales of virtually all of its titles, most of them with tens of millions of dollars in development and marketing costs, sunk to levels that would shock most people.

Now imagine what would happen if NPD’s list was posted on the wall of the world’s only video game retailer, and people began to rely upon the list for advice on what was worth buying. That’s what’s happened at the App Store. Basic economics classes teach us that cheap things outsell expensive ones when quality is held constant, and suggest that cheap, low-quality items will outsell more expensive, higher-quality ones regardless of the inherent value of the better item. We’ve been seeing these trends play out at the App Store for almost as long as it’s been in business, and companies that have chained themselves to following the top 100 lists now spend their days strategizing how to lower their prices at given times to get back on the list or gain positions.

Apple got wise to the concept of race to the bottom pricing a long time ago for its computers, and decided not to compete at the junk end of the market, recognizing that it wanted to make good products and sell them for a reasonable (or sometimes unreasonable) premium; consequently, it contented itself to sell fewer units of a superior product at higher margins. Obviously, this strategy has had benefits and costs, namely strong profits, along with decades of very weak overall penetration of the computer market. It has also given Apple a brand name that is, if not universally synonymous with high quality, more so than any of its computer-making rivals.

Going forward—really, starting today—third-party App Store developers need to start asking themselves whether they want to compete on making great games that are worthy of a premium, or crappy ones that will stand out from the pack merely on branding or pricing. Once they’ve answered that question, they’ll need to start pursuing a smarter strategy for popularizing their games than just sitting around watching App Store charts and tinkering with their prices to boost sales. Regardless of whether they pick quality, branding, or both as their key driver going forward, they’ll also need to find smarter ways (read: marketing) to get the word out to iPod and iPhone users, and start putting out titles that are objectively great on day one, rather than trying to polish a release that ships in tarnished form.

What constitutes smart marketing in the iPod and iPhone space? Advertising is a gimme, and the one that most developers seem to be having problems with; reaching the people who are actually using these products with ads, well-developed mini-sites, and similar content is key. On the game side, making control and UI improvements based on user feedback can help titles that are on the edge of greatness boost their word-of-mouth, at least, if they’re made quickly enough that the users haven’t moved on already. And noteworthy feature additions can generate additional media attention for previously-released apps, and keep users talking about them. Pocket God is a paradigmatic example of a title that started with little inherent value and has remained a top seller through weekly or near-weekly updates, smarter-than-average marketing, and good media communications.

What is dumb marketing? The list is long, but some of the items go without saying: relying on dying printed magazines to advertise products for Internet-dependent devices like the iPhone and iPod touch seems like a complete waste of time. Using astroturfing—fake comments on the App Store and other web sites—as “guerilla marketing” is sleazy, turns smarter users off, and gets companies banned from reputable sites. And trying to schedule old-fashioned “media events” just doesn’t work for iPod and iPhone games, at least, not now. Why should members of the media waste hours of travel and other time on titles that will most likely sell for $5 and be forgotten a week later?

At this point, the iPod touch and iPhone have sold well over 40 million units, and proved their viability as gaming devices; now it’s up to developers to start taking the steps necessary to cement themselves as the Electronic Arts, Activisions, Segas, Namcos, and Konamis of this generation of portable devices. There’s a strong argument to be made that the industry’s biggest historic players are so stuck in an old way of thinking that there’s a massive opportunity here for comparatively new blood—the Ngmocos, Gamelofts, PopCaps, Digital Chocolates and Freeverses, as some examples—to completely dominate this platform merely by releasing compelling games at reasonable prices. That these newer companies consist of so many people from the established ones is not lost on us; clearly, the traditional systems of game development and marketing are either stifling or broken, and the sooner every company acknowledges this and moves forward, the more successful it will be.

Jeremy Horwitz

Jeremy Horwitz was the Editor-in-Chief at iLounge. He has written over 5,000 articles and reviews for the website and is one of the most respected members of the Apple media. Horwitz has been following Apple since the release of the original iPod in 2001. He was one of the first reviewers to receive a pre-release unit of the device, and his review helped put iLounge on the map as a go-to source for Apple news.