This Is What Happens When an App Doubls Its Price
This is a single insight from This Week in Apps - It Finally Happened!. Check out the full article for more insights.
Robokiller is the highest earning app of its kind. Our estimates show users spent $3.8M in-app in October - the most revenue the app has ever seen in a single month.
Back in January, Robokiller was acquired as part of a portfolio purchase by Bending Spoons, an Italian company that's been acquiring distressed app companies in an effort to revive the apps and increase their performance as part of a mega portfolio. The same company that acquired OG notes app Evernote.
A few months after the transaction, bending Spoons doubled its subscription price.
Over the summer, users of Robokiller awoke to a notification that their $39.99/yr subscription would be going up to $89.99/yr. More than twice as much.
You could argue that the new price is still a bargain for the service it offers. Not being a user, I don't know if that's true, but that's less relevant. What is relevant is whether its current users thought it was a bargain.
If they did, revenue would simply double starting in April, giving us an interesting glimpse into the price elasticity of an app that saw downloads get cut by more than half since its acquisition.
Well...
According to our estimates, revenue did increase following the increase but it didn't double.
October, which was Robokiller's biggest month in terms of revenue, saw a year over year increase of 28% - the biggest increase this year. Sounds like a lot, but considering the price doubled, that means quite a bit of churn.
A quick back of the napkin calculation suggests Robokiller may have lost more than half of its paying users since the price increased! We expect to see the drop continue into next year.
Fewer users and more revenue has its advantages, but it also makes you think - was this a good mid/long term strategy?
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All figures included in this report are estimated. Unless specified otherwise, estimated revenue is always net, meaning it's the amount the developer earned after Apple and Google took their fee.
