85% piracy rates. Ouch. It hurts me to even read that, although part of me has to point out that when you're developing for an audience which considers $2 expensive and $5 highway robbery, going in with the expectation that people will happily pay you money is a little optimistic.
On the plus side, you can't possibly have a worse piracy problem with your application than China does with everything, and you'll probably eventually do what Chinese software companies do: put the real meat on the server, let everyone have your client for free, and let the users who prefer to Own Their Games Instead Of Renting Them cry to themselves in the corner.
It seems to me that people are associating the platform with the price its software should cost, rather than on the quality, playability or usability of said software.
Sure, some of the App Store games you could easily picture winding up on one of those "5,000 Games!" CDs if they were developed on the PC. Those Apps probably should be free or 99 cents at the most. Some of the games and apps could easily be considered full featured desktop products that might sell for $10-$20 on a PC/Mac. It's my assumption that one of the reasons these are NOT desktop apps already is because it's notoriously hard to market and publish desktop software and because the iPhone/iPod Touch has the "IT" factor right now. But just because it's an iPhone app and not a Mac app, why should it cost any less?
Unless of course you consider the extra marketing and publishing costs of putting out games for a PC or Mac into the cost of the product. But does that really make a $20 app a $1 app if you remove those costs?
I've read a few articles/posts about piracy rates, and it seems that a piracy rate of 90% is "normal", at least for PC titles. So to me it seems like piracy on the iPhone is lower than it could have been, and a lot lower if it drops to 50%. Still a problem, of course, but if Apple keep making it more complicated to jailbreak the hardware it might actually be moving towards 0%.
On the plus side, you can't possibly have a worse piracy problem with your application than China does with everything, and you'll probably eventually do what Chinese software companies do: put the real meat on the server, let everyone have your client for free, and let the users who prefer to Own Their Games Instead Of Renting Them cry to themselves in the corner.