PopCap have developed and published some of the most compelling video games this decade. Two in particular stand out for me, Bejeweled 2 (read our full review here) and Peggle but there are many others and everyone might have different favourites. They are experts at perfecting the balance between casual simplicity and the sort of gripping longevity which often make you forget to take dinner out of the oven. This mix has made them one of the most profitable developers in recent years and given them a credibility which makes their recent pricing experiment very interesting.

For those of you that don’t already know, PopCap reduced the price of Peggle on the iPhone/iPod Touch App Store for a limited time. They cut it from £2.99 to £0.59 for one week. The result of this cut was that in three days they sold more than they had in the preceding three weeks. They also jumped from around sixtieth on the App Store chart to first.

Some commentators have suggested that this was an attempt to “work the system” because titles on the App Store sell more the higher in the chart they are. That makes sense, people only buy what other people think is worth buying. So PopCap drop the price (a move which was publicised on a number of iPhone and gaming blogs) and get their product to the number one spot. They then raise the price again and enjoy a week of increased sales at the increased price. Peggle currently sits at number 29 on the App Store chart, a week after the sale ended. At number one is Let’s Golf! by Gameloft, a game which has recently dropped its price to £0.59 (all of the current top 5 are £0.59) and rocketed up the chart. So it seems that PopCap’s experiment was watched with interest by other developers and is now being used as a sales model.

This might be simply a consequence of the volume of titles on the App Store and the way their charting system works to influence future sales. I think that there might be other consequences of the success that this experiment had. Firstly, as we are already seeing with Let’s Golf!, there will be imitation. Other publishers will try the same model of a brief price reduction to drive sales and attain top spot in the chart and then back up to full price to take advantage of that high chart position.  This means that over the next few weeks we might get some bargains in the App Store.

What happens when two or three different publishers try the same trick in the same week though? They can’t all hit the top spot. Will there also be a resistance to this new technique when publishers realise that within a week of their price returning to normal they plummet back down the charts and out of the all-important top 25 (the first page of chart results on an iPhone)?

Another possible consequence of PopCap’s experiment is that publishers will finally realise that cheaper titles can make as much money as those with higher prices simply by selling more. Would another week at number one with a £0.59 price tag have made more money for PopCap than the week they spent, at £2.99, dropping out of the top 25? We might never know, sales figures aren’t readily available but I believe it might be a comparable figure. The “pile it high and sell it cheap” business model has been extremely successful for many years. Maybe our friends in digital distribution have realised they can make money by selling it cheap? They don’t even have the inconvenience and expense of the big pile.

We are at the birth of a distribution model just now and publishers are obviously experimenting with ways of maximising revenue. The App Store is an easy place to experiment but I would be surprised if we didn’t see the results filter into other digital distribution outlets. This recent success PopCap have had with the App Store (and the success Gameloft seem to be having with Let’s Golf!) might just result in cheaper games on the PlayStation Store and Xbox Live Arcade.