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How the Grinch stole Windows 8: Missing discount points to larger challenge for Microsoft

Parents who want the Dr. Seuss classic “How the Grinch Stole Christmas” in app form for their kids this holiday season can find it right now for 99 cents — an 80 percent discount from the normal price — for the iPad, iPhone, Android, Kindle Fire, and Barnes & Noble Nook.

The interactive storybook app is also available for Windows 8 — for the full price of $4.99, without extra features available in the iOS version.

That $4 spread speaks to a larger challenge that Microsoft is facing as it tries to catch up in the new world of tablets and apps. It’s not unheard of for high-profile apps to cost more on Windows 8 PCs and tablets. We’ve seen this before, with the basic version of Angry Birds Star Wars going for 99 cents for iPad, and $4.99 for Windows 8.

A representative of Oceanhouse Media, which makes the official “Grinch” apps, says via email that it was “simply a matter of us not being able to coordinate the sale with Microsoft in time. We hope to do a promotion with them in the new year.” A Microsoft representative referred questions to the developer, noting that pricing decisions are up to individual app makers.

But in general, the lower number of users on Windows 8, for now, makes it tougher for developers to make up the difference in volume when the price of the app is discounted.

For what it’s worth, the WebOS version of the official “Grinch” app is also still $4.99.

The cost of ramping up development teams to make Windows 8 apps may also be playing a role, says Wes Miller, an analyst at Directions on Microsoft who tracks Windows Store trends on his site WinApp Update. Especially this early in the product life cycle for Windows 8, developers appear to be reluctant to do any heavy discounting on apps.

Another complication is the minimum price of $1.49 that Microsoft has placed on paid apps in the Windows Store. (Apps can be free, but if they’re paid apps, they have to be at least $1.49 for Windows 8 as part of the Windows Store terms for developers.)

There’s also the question of whether Windows 8 apps should be priced for computers or tablets. (Tablet apps are often priced lower.) For example, although Angry Birds Star Wars is great on a touch-screen Windows 8 tablet such as the Microsoft Surface, the price is the same ($4.99) as for the Mac version of the same game.

Microsoft isn’t ignoring the importance of discounts to drive interest in apps and Windows 8. The company is currently advertising discounts for selected Windows 8 apps as part of a promotion, with the ability to save up to $70 on apps, subscriptions and services from ESPN, Expedia and other companies.

The company is hoping to attract a critical mass of apps as Windows 8 continues to roll out on new PCs. The company is also offering flexible terms for developers including a revenue split that goes from 70-30 to 80-20, in favor of the developer, after an app reaches $25,000 in sales.

Although it might frustrate some early Windows 8 users, Miller says he doesn’t think higher prices for some Windows 8 apps will hurt demand for Windows 8 overall. “In the grand scheme of things,” he says, “it probably doesn’t matter as long as the apps are there.”

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