While I agree completely with the updates comment, I don't think you're in a position to comment on pricing given that your only experience is with testing $1 v

While I agree completely with the updates comment, I don't think you're in a position to comment on pricing given that your only experience is with testing $1 vs. $2. Pricing is a game of reward and risk. If the perceived reward is in line with the risk of getting the reward, you've found a starting line for your price. The thing with the app store is that there seems to be a very steep price/reward curve. At the low-end, the $1/$2 level, iPhone users seem to be okay just throwing their money around. When you start moving from there, the app is going to need something to push it over the edge. While I don't follow the available apps very closely, I'd venture to say the competition in the $5 level is a little steeper. You're probably dealing with large software companies (who's name reduces perceived risk), established brands (again reducing risk), and a decent promotional mix of advertising and PR. A "lite" version should be on the radar of EVERY game developer. I don't see a good way around it unless you can consistently get good online reviews and coverage. You need a way to reduce that risk to the consumer and giving them a demo product is a way to do it. I'd package the lite version with some sort of messaging system too so that if you decide to do another game, you can pump ads into your old lite versions for the new games. With the lite version, you need to convert people to the full version, and drive as many marketing messages to the users as possible without becoming ridiculous.