Pricing Discrepency is Costing Firecore Sales

General
1

I am not here to complain about the price of Infuse. Rather, I want to point out a discrepancy that breaks the pricing model and makes the purchase of Lifetime licenses illogical in many countries.

Using the USA pricing as a baseline, an annual license costs $16.99 and a lifetime license costs $99. That is a 5.89x multiple, so if the user keeps using Infuse for six years he is, in purely mathematical terms, ahead. It is a quite high multiple for a software purchase but, presumably, Firecore thought long and hard before deciding that 5.89x was the optimal multiple.

In Japan, however, the multiple is 7.50x. That means the Japanese user would need to keep using Infuse for eight years before he is ahead.

In India the multiple is even higher. 7.62x. Again, eight years before you get ahead.

In Brazil the multiple is 8.58x. Nine years before you get ahead. Wow. For whatever reason, Firecore really doesn’t want to sell lifetime licenses in Brazil.

According to many of the staff responses to pricing queries in this forum, prices vary between countries because of taxes, but the tiers are essentially based on the US prices. So, regardless of the price of the annual license in a particular country, the multiple between the annual and the lifetime license should be approximately the same as the US multiple, which is 5.89x.

Taxes and the relative values of currencies have nothing to do with the multiple. In the case of Brazil, with the highest multiple I have found so far, there is no VAT on app sales and, in fact, due to a Brazilian court ruling against Apple, Firecore now pays lower app store commissions in Brazil. Firecore gets to keep more of every dollar in sales from Brazil but, instead of trying to increase those sales, the ridiculously high multiple on lifetime licenses is crippling their sales there.

By the way, for what it’s worth, a really smart company might consider the difference in purchasing power between the US and poor countries. Does it really makes sense for Infuse to cost more in Brazil, where there average wage is 10x lower that the US, or India where the average way is 17X lower? Wouldn’t Firecore make more money overall if the local price felt reasonable in each country.

2

From what I gather, infuse just sets the US price and Apple handles all the conversions for every country. Otherwise it would be a headache for developers to constantly adjust prices as the markets change. I don’t have an answer for why an annual vs lifetime is relatively different but maybe, if it is Apple, they treat these differently and charge different amounts. Also, I don’t think Infuse is too concerned if people just stay on the annual plan vs getting a lifetime.

3

That is the default option but that is not what Firecore does. You can actually view the tiers and resulting prices for each country in App Store Connect. Although there will always be variance between different currencies, there is no way that you would end up with the same tier costing $99 in the US and $120 in Brazil, a country that does not add tax and has lower app store commissons.

It is clear that Firecore applies specific pricing in different zones. Perhaps the best example is the Eurozone which Firecore clearly considers to be an important market. There, despite including VAT as high as 25%, lifetime Infuse is priced at €99 ($116). They have effectively reduced the price because they want to be under the psychological barrier of the €100 mark. They know that they will sell far fewer lifetime licenses if they are priced even a Euro higher.

What I don’t understand is why they don’t apply the same sales psychology to other countries. Again, just to be clear, I am not complaining about the price of Infuse. I understand that it costs a lot to run a software business. I am merely pointing out a missed opportunity to spread and make more money in certain large markets simply by thinking about the nature of those markets.

In the case of poorer countries, Firecore sets the monthly and annual prices at roughly around the US price (more in countries with added taxes), but then set the lifetime price crazy high; as I noted above, as high as a 8.58x multiple in the case of Brazil. If attached to tiers, the multiple would remain around the same as the US, 5.89x, in every country. A 5.89x multiple in Brazil would make the lifetime license R$ 413. Instead, it is R$ 599,90. My guess is that almost no Brazilian buys that.

With respect, that makes no sense. In the case of the US, they have decided that receiving $99 upfront is a better deal for them than possibly receiving $16.99 for an unknown number of years going forward. Like all sellers of subscriptions, they know that a certain percentage of subscribers churn out each year, so getting a large upfront payment is better. Churn is actually higher in poorer countries. Also, a locked-in, committed, lifetime user is more likely to introduce others to Infuse. If Firecore did not feel that the lifetime option was good for them, they would withdraw it.

What I am saying is that the same logic should apply to other regions, not just the US and EU. I know that the rest of the world is not as developed and countries such as Brazil may not seem to be promising markets for Apple devices, but you would be surprised at how fast all these countries are catching up. In particular, sales of the MacBook Neo and the iPhone 17e are on fire, and I expect the rumored cheaper Apple TV to be a big hit in global markets too.

Firecore should be thinking about how to lead in these markets, to lock in tomorrow’s profit, rather than focusing only on the regions that deliver today’s profit. Everyone in developing countries knows that, despite having so much less money, they are expected to pay more. They generally accept that but, by really screwing them over, Firecore is both losing out on sales and providing oxygen to future competitors. It makes no strategic sense.

If it was me, I would use PPP (Purchasing power parity) to pitch my price in each country at a level that is relative to local prices. For example, in Denver a good haircut might cost $40. The same haircut in Rio de Janeiro would cost $10. In those terms, a lifetime license for Infuse costs 2.5 haircuts in Denver but 12 haircuts in Rio de Janeiro.

Now, I’m not saying that Infuse should be a quarter the price in Brazil but, if you want to grow in that or similar markets (most of the world), imagine yourself into the perspective of those potential customers. If you had 90% less money in your pocket, which purchases would you cut?

That is why Adobe charge ~$40 for Creative Cloud Pro in Brazil as opposed to the $69 they charge in the US. At the very least, you need to make sure that you are not charging customers in poor countries significantly more than your customers in rich countries. That’s just insulting.

4

IMO the math presented by OP is overly simplistic. Like any rate you lock in over time, the purpose is to de-risk. Sometimes you get ahead, sometimes they get ahead. It typically balances out, though. Given the pricing environment of the last few years, overall cost of living, inflation, the cost of development hardware and maintenance overhead… the sheer volume of pressure being applied from all directions is uniquely discouraging for anyone who participates in an economy, be it consumer or entrepreneur. Unfortunately for most, there’s no rule that states we all get to participate in an economy equally. Common sense just tells me Infuse and any company that offers lifetime is always getting the shorter end of the stick.

5

Sadly, the math I presented was not simple enough for everyone.

As I am talking about the multiple between the annual and lifetime price, the currency exchange rates are irrelevant. The multiple was 8.58x whenever the current rates were set last year, and it remains 8.58x today. That is the whole point.

Just to be clear, even if Firecore charged customers in poor countries $100 per year, the lifetime license should still be the same 5.89x multiple as customers in rich countries, because the same consumer logic should apply. If it takes 6 years to get back the cost of the lifetime license in the US, it should not take 9 years in Brazil, especially when the app store commission is lower there. This is, absolutely, a discrepancy and one that is costing Firecore sales.

How is any of that relevant to a pricing disparity? The cost of providing their app to customers in Brazil is exactly the same as providing it to customers in the US.

No. Common sense should tell you that any company who were disadvantaged by offering a lifetime license would simply stop offering it or would make it more expensive. Firecore have clearly decided that getting 5.89x the annual price up front is a good deal for them. It is certainly the most expensive ratio I have ever seen for a lifetime software license. For comparison, a lifetime plex pass is a 3.5x multiple of the annual price.

The only way in which Firecore are getting the short end of the stick here is that they are accidentally crippling their sales in some countries. I am sure it is not deliberate. The markets in the US, UK, and Europe are far more important. It is easy to understand that a US company would be too busy to stop and check their prices make sense in 174 other countries. They are, of course, completely unaware of the sales they are not getting.

So, I am alerting them to the potential. Without increasing the cost of running their company and maintaining their products by a single dollar, Firecore could be locking in more up-front revenue. They could also be increasing the number of committed users evangelizing Infuse in markets that are growing faster than the current primary markets. They could be entrenching themselves as the default choice and preventing the growth of future competitors in those regions.

6

I’m not really committed to this debate, and I’m sure Firecore can appreciate the point being made, but if you’re going to make a point about how long it might take someone to get their money’s worth, then the pricing environment at the time a price is decided upon is very relevant: a lifetime price decided upon in 2017 would factor in the pricing environment of that time, and one decided upon in 2026 would do the same, and if the lifetime price stays the same between those years, or if someone bought in 2017 and then the cost shot up in 2026, then these are factors you’re overlooking in your math, hence the simplistic comment.

For example, I bought Infuse Pro Lifetime for $62.99CAD and it’s currently $129.99CAD. It’s clear as day that the pricing environment at the time played huge relevance to the decided upon price. Would you say that “the cost of providing [the] app to customers” changed at all between those two price points? Did Infuse’s team double? Did the code they wrote get twice as hard to write or maintain? Did the team’s salaries need to keep up with the cost of living? Maybe the effort stayed the same in order to provide the exact same app… but the pricing environment certainly didn’t. You don’t know, but those are real good assumptions to make.

It also bears stating that FIrecore choosing to only develop for the Apple ecosystem is a choice. Reading between the lines, one might even suggest it’s a statement of sorts. Anyone who operates an online business will tell you without hesitation that Apple users spend money, and then there’s everyone else. I’ve found in my experience that company’s that are focused on delivering a solid product to just Apple users are definitely not (hence the choice) optimizing for their bottom line… and hear me out here… maybe that’s okay.

Company’s that optimize for their bottom line at the cost of everything else are usually ones that have been taken hostage over by private equity, where bean counters reign and then ultimately enshittify the product beyond recognition, collect a bonus, and move on to their next target.

I won’t make any assumptions about Firecore’s team dynamic or how they focus on product management, but the company strikes me as product-first rather than accounting-first. And that’s not a knock in my book; that’s a compliment.

Anyway, the point in all this is that if someone in Brazil or Japan bought the membership today, and it doubles next month, they won and Firecore lost. Or maybe they both won? Hard to say when the math is overly simplistic.

9

Good point about the annual price rising over time. That is certainly a factor worth considering. It is not, however, directly relevant to my point that the cost of the lifetime license, relative to the cost of the annual license in that country, should be roughly consistent in all countries.

In any case, hopefully the management of Firecore will see this thread and consider whether this discrepancy makes sense for their business. More customers, regardless of where they live, make Infuse a more successful product, and that is good for all users.