Not only this, developers shouldn't shy away from charging what they think the game is worth, $5, $29, $59, $99, whatever. If the game is good, people will pay it.
I would bet the higher that price the less likely the sale and also the more likely the piracy. Charging even $5 for a game will likely drive your actual installs and sales through the floor. If you make a good product but most people can't justify paying for it, they'll just find an alternative means of playing it. Also the pump and dump industry in the app stores especially in gaming is another thing you have to worry about. You make a good game at a $10 price tag within a couple weeks you'll find your exact game with slightly altered graphics and a similar name that will be under cutting your price point. This used to be much worse, but unless you're a big studio like EA, Rovio, or King it's still a problem for you as a little guy.
I remember paying ~ £5 in the 80s for 8bit games on cassette tape and considering it a bargain. I remember when Street Fighter II came out on the SNES ~ 20 years ago. It was priced at ~ £65-70 and people snapped it up (I DO remember considering it expensive, in relation to the normal price for SNES games which must've been about £30-40).
If prices had kept up with inflation, 'budget' games would be about £12; blockbusters, over £100. Games are well undervalued on app stores, and exploitative rubbish is the result. I've personally paid reasonable small amounts for some of the classic games (e.g. Monkey Island) and am on the lookout for good modern games at about the same price point.
Price elasticity is strong, but the original comment is presumably assuming you can make a decent revenue with a non-minimum price tag.
For instance, imagine a game listed as free:
- a freemium model let you play 15 levels and asks for 4.99 to unleash 500 more levels, maybe let a 1.99 option for 100 levels; this should convert 3-5% with a million testing players; v.s.
- free-to-play with locking levels every 10 levels that are so hard you have to use bonus, that would convert 1% to pay for either a Golden Orb for 1.99, or a Golden Blast for 5.99, etc. each who may or may not make a difference, and appease your frustration, and work only once. You get a couple of whales (desperate, clueless players) who pay 50$ a month, but even with a larger distribution (two to three millions players) you don't break even.
The idea in the original comment is not that a price twice higher will double sales, but more that having a price tag (which free-to-play games deny having) makes sense for good games.