Turns out free doesn't work, and neither does dirt cheap. I am amazed that people will go into an area like video games, where you are free to make a truly unique, non commoditized product, and compete on margin.
I think people underestimate what it takes to make a good game that people will be willing to pay for. Take Flight Control. It's a very enjoyable, addictive game. However, if you take this same game and its mechanics, slap a different set of graphics that's not as polished, take away the highlight when you land or link a plane to its landing strip, change the sound effects, use simple randomization for where planes come from and their rate of appearance, and it's not going to be as big a hit.
The iPhone hardware and its built in apps set a certain level of expectation of polish. Graphics that would work on other environments won't cut it on this device, especially when there are a lot more options.
