I...don't really follow.
Do you mean, from the above statements, Mr. Watanabe sounds afraid of the price situation?
I didn't get that impression in particular after reading his statements. Rather, I assumed these were the lessons his team absorbed based on sales results from the multiple products Cave has released on the App Store.
Or perhaps you meant that you attended the talk where this statement was made and, shall say we say, there was some funk...

i'm reading between the lines. when people talk about how OTHER PEOPLE price or SHOULD price, they're talking from fear - for themselves.

you can also tell this from some comments in this thread as well as people like nintendo head honcho.

I'd be scared too if I faced to risk of no longer being able to create anything but mass market products with game design mostly being dictated by the marketing department.

Wouldn't be way better if accessible core gaming continues to go mainstream, and is able to reach such bulk by digital distribution that we get no strings attached games for incredibly cheap?

@Michael "Eventually the Bubble will burst"

Expensive game development = The Slowly Bursting Bubble

Just look at all the larger studios shutting down, and new smaller tight knit studios springing up. Doesn't take a financial analyst to see the trends.

In My opinion
Those studios will bring forth the new wave of $10-15 games, crushing the $60 game release to only the elite studios.

As far as 99c games go
As long as colleges keep pumping out game dev/art students, then there will be a steady stream of 99c/freemium games Till eventually they start sending the message to the next generation that game dev is a very high risk field to be in despite the increasing number of sales every year.

"games become worth their weight in data "

Question: How does one weigh bits and bytes? You can't use a physical media as a 8Gig sd card weighs less than a DVD. A 64Gig SD card weighs less than a 64Gig Hard Drive.

"If your App is of quality and marketed well, price accordingly and you'll find paying rent much easier"

Except, of course, that EVERY SINGLE piece of research on the subject proves the exact opposite. App Store games generate FAR more money at lower prices, in pretty much every combination of circumstances - unknown game reduced in price to give it a visibility boost, well-known title discounted in the short-term, already-successful hit cut over the long term to build userbase once it's already in profit, you name it. The result is always the same - sales up 10x - 100x, revenues up 5x - 20x.

I hear you. This is the true potential of indie games and digital distribution, not the loads of casual time killer apps out there. I'd love to buy DeathSmiles for $15 if I had an iPhone. I already have the 360 port, but the iPhone version has a new mode.

I'm trying to follow the logic of that article but I don't get it. The game sold 30,000 units in 3 days, during an announced sale, and an additional 10,000 units in the next 3 months. According to the graph shown, it seems like the sales had sort of fallen off at a steady rate regardless of the change in price. Which seems pretty natural, games tend to sell less as time goes by.

I think Cave's success may be telling of how they know who their audience is (many customers willing to import their games) and how they do solid ports (according to what they say). Many other companies like Square Enix do half-assed ports with choppy frame-rates and still charge these sorts of premium prices, which comes off as a slap in the face to their real fans.

And looking at Cave's site, they seem to plan sales often to generate interest in both new and older releases. Which is probably a good idea to do if you plan on offering higher prices.

Given the nature of the game and the fact that it's a port, having exhausted most of its potential audience at that point in time with 30,000 sales doesn't seem too unbelievable. And while being a port lowers the potential audience size, at the same time it also increases the sales rate in the first few days after release, as there's less of a need to wait for public opinion to form. The lower price point would only accelerate this. So until there are actual numbers of how much of the potential audience has been reached (which I figure aren't actually possible to collect), there's no way of telling whether they would've made more revenue in total had they kept the lower price point.

There's also the matter of the perception of value of appstore users, which has been skewed to the low end due to the large amount of $.99 apps available. The lower the perception of value by the potential audience, the lower the amount of sales get as prices get higher compared to an audience with a higher perception of value. Given that, a prolific developer (within its niche, at least) like Cave selling their products at a higher price and advising others to not be afraid to do the same might be the economically more responsible action, even if it means less revenue in the short term.

The strategy is this: price higher to let the people who will pay more actually pay more. Then decrease prices during sales to pick up impulse buyers. They can do better with dynamic pricing strategies than a single static lower price.