I've become a big fan of game developer Capy (formerly Capybara) in the past few months -- their releases of Critter Crunch on iPhone [iTunes link] and Might and Magic: Clash of Heroes on the DS have won me over quickly. But I'm not sure I agree completely with their co-founder, Nathan Vella, about what he says in this Gamasutra interview. His opinion is that the push towards the 99 cent price on the App Store is "the single most frustrating and terrible thing about App Store pricing." He says the dollar price point is stifling, and he praises developers like Canabalt's Adam Saltsman for sticking with a higher price point even when their games are simple.
I do agree with Vella on one thing: no developer should sell an app for less than it is worth, and dropping to 99 cents to increase sales doesn't work anyway. But certainly there's a place for 99 cent apps on the store, and I know personally that a 99 cent price point will open me up to try apps I'm not sure about, especially apps that I might be interested in but that don't offer a free trial. Clive Downie of ngmoco says as much later in the article: it's about the balance between providing choice for your customer and supporting yourself as a developer.
In the end, Vella knows what he's doing: he doesn't say that 99 cents is always the wrong price, but that you should always stick to your guns and ask your customers to pay the right price. If a game is worth $4.99, or $6.99, or even $9.99, developers will find that customers who care about the quality are willing to pay for it.