This is kinda what it seems like to me, which is precisely why I've decided to stop making free games. My next game will sell for $2.99. I have hired a 3d modeler and I will be using Unity to make it really look like a game worth $2.99.
And even if it flops and nobody buys it, it still won't have done much worse than my last two games.
If you look back at the evolution of software on the PC (when software became mainstream) you'll see a pattern:
Once the chips/memory reach a certain point, the languages/APIs can advance to a higher level and the demand for what the software does, advances as well.
The consumer sees this and demands more as well.
Consider: back in the "old days" we bought file managers and screen savers as separate products, now they are built in.
Flashlight and weather apps were separate, now they are built in.
Customers expect (and eventually get) more.
Point: if you move to an advanced game dev platform (Unity) you'll not only need to be nearly as advanced (and polished) as the current market, but you'll need a fresh theme, something clever / different.
As far as prices go, we the developers have created this problem. It was because of at least 2 things: 1. customers steeling the product (still a problem with IAP) 2. too many apps digging for gold during the gold rush days of the app store.
What we have now is at least 2 problems:
1. app discovery
2. app revenue
Apple and Google have contributed to this mess because they were bragging about how many apps they have. Now they realize (or should realize) they need the "killer apps"
Developers will realize that the easy "flashlight gold rush" days are gone, some will look for other work, while some will dump good money trying to make the charts.
The devices will soon became nearly the same, probably in the next few years. At that time, the main players will realize the value of being the last phone people buy vs the next phone people buy. This will be when the killer apps will take center stage.
Apple needs to give the consumer a reason to buy their product. It's never been price, it's usually been features and strong following. Those reasons will fade, once the devices become nearly the same (quality, speed, features, security...)
Apple knows this, that's why they made a deal with IBM. IBM, already has mobile enterprise solutions for iOS. They introduced a new language (Swift) with an advanced visualizer to encourage more game development. They could have went forward with ObjC/C++ or a more universal language. They didn't because they want/need the killer apps to be on iOS.
65% of the customers download zero apps in a month... Apple knows this, there is no need for 1.5 million apps when the average device has some 50 apps on it.
Apps have become the new spam, anything can get old after a while.
Look at the thread about apps being profitable (same forum section), much has been written about this there.