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The Slippery Slope Of Game Pricing
Posted January 9th, 2011 at 06:07 PM by S.R. Krol
A recent trend in computer gaming has been the extreme slashing of price points for a limited time. Steam particularly has led the way, with some limited time price reductions being as much as 90% off their normal cost. Here at Shrapnel we've even experimented by offering a bundle of four games for the price of one.
While a goldmine for consumers it is a potentially troublesome issue for developers. Imagine being an indie developer, sinking thousands of your own dollars into project along with hundreds of hours squeezed out between work and family, only to be forced to sell your game at rock bottom prices because that has become the new norm. After all, as a consumer if I've become accustomed to games being discounted 50%, 75%, or 90% off why wouldn't I have the attitude of simply waiting until that game gets cheap?
Several weeks back Ars Technica had a nice article about the phenomenon that is worth reading. More recently, Jay Barnson comments on the issue. Another good read, especially the comments which contain some pretty thoughtful remarks on the situation.
Emphasis mine. Interesting observation. Back in the day the idea was that you didn't need to sell 100,000 copies of an indie game to "make it". That was AAA talk (and now of course it's more like 1,000,000 copies to a retail game to just break even). So in effect there is a potential for the indie movement to turn into the very industry it sought to break away from!
While he mentions the app market only in this passing sentence I can't help but feel that this is the root of the problem. When you have software selling for .99 a pop trying to get people to spend twenty, thirty, forty times more than that on a single program becomes challenging. Nevermind that a full featured game is vastly superior in every way to a typical one-trick app, the psychological effect is already rooted in the consumer's mind.
The thing that I really question though is why do most gamers view computer games as entertainment that should be practically free, yet this is never a question in the analog world? In fact, with board games, miniatures, and card games the prices have only been rising, not going down. Someone will happily pay over $100 for the latest coffin-box game from Fantasy Flight but then balks at paying more than a few dollars for a six month old indie game. Whut?
Is it that with a board game you can physically see what your money went towards? Probably. After all if I gave you a choice of having a million dollars presented to you in currency form, or as a painting worth a million dollars, which would you choose? Both are equal in value but a million dollar painting can look the same as a dollar painting but a million dollars looks like a million dollars.
The value of software has always been one of mystery for the most part. Business software sells for more than commercial software. Games decided on a comfortable price point long ago and have typically stayed there.
Is this, as Jay puts it, "race to the bottom" really the way we should be going now? Wouldn't it make more sense to try showing that indie games are just as valuable as those boring, cookie-cutter AAA titles, and thus maybe look towards increasing the prices?
I know, heresy from a consumer's standpoint. But if we reach the point where the only games left are Angry Birds and match-three games was this economic suicide worth it?
While a goldmine for consumers it is a potentially troublesome issue for developers. Imagine being an indie developer, sinking thousands of your own dollars into project along with hundreds of hours squeezed out between work and family, only to be forced to sell your game at rock bottom prices because that has become the new norm. After all, as a consumer if I've become accustomed to games being discounted 50%, 75%, or 90% off why wouldn't I have the attitude of simply waiting until that game gets cheap?
Several weeks back Ars Technica had a nice article about the phenomenon that is worth reading. More recently, Jay Barnson comments on the issue. Another good read, especially the comments which contain some pretty thoughtful remarks on the situation.
Quote:
"But I do worry about this. Is this kind of thing driving a consumer expectation that indie games should only sell for $5 or less? Are we racing to the bottom of indie game pricing where only those games that can sell a hundred thousand copies are more are profitable?"
Quote:
Nowadays, an iPhone game costing more than a couple of dollars, total, will be met with loud complaints.
The thing that I really question though is why do most gamers view computer games as entertainment that should be practically free, yet this is never a question in the analog world? In fact, with board games, miniatures, and card games the prices have only been rising, not going down. Someone will happily pay over $100 for the latest coffin-box game from Fantasy Flight but then balks at paying more than a few dollars for a six month old indie game. Whut?
Is it that with a board game you can physically see what your money went towards? Probably. After all if I gave you a choice of having a million dollars presented to you in currency form, or as a painting worth a million dollars, which would you choose? Both are equal in value but a million dollar painting can look the same as a dollar painting but a million dollars looks like a million dollars.
The value of software has always been one of mystery for the most part. Business software sells for more than commercial software. Games decided on a comfortable price point long ago and have typically stayed there.
Is this, as Jay puts it, "race to the bottom" really the way we should be going now? Wouldn't it make more sense to try showing that indie games are just as valuable as those boring, cookie-cutter AAA titles, and thus maybe look towards increasing the prices?
I know, heresy from a consumer's standpoint. But if we reach the point where the only games left are Angry Birds and match-three games was this economic suicide worth it?
Total Comments 7
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I used to run a brick-and-mortar pen-and-paper RPG-and-board-game store. So, I can tell you that these same concerns happen in that industry as well.
I doubt that the folks buying those $100 board games are also balking at the price of a $5 indy computer game, as you suggest. Both games are selling to gamers, but not necessarily the same gamers. For every person willing to spend $100 on a board game, there's half a dozen playing their freind's copy, and one or two exchanging illegal PDF scans of the latest RPG rulebook. CCGs are offered cheap online, the d20 glut dropped book prices at various points during 3.x editions, etc, etc. This is not a new or isolated phenomenon specific to computer games. A large portion of the audience is motivated by price, saying things like "WOTC bends us over and sticks it to us" when charged more than they'd like for the empty space inside their Gamma World box, for instance.  But what companies like FFG and WOTC have shown is that if you produce a high quality product you can charge a high price for it. If instead you just look for ways to cut costs and compete on price, you'll have a proportionally difficult growing your fan-and-customer-base. At least, that's what it looked like during my years in the industry. Largely, my advice is to stand your ground. Your pricing strikes me as reasonable and I've been very pleased with the products I've bought from Shrapnel games. |
Posted January 11th, 2011 at 01:44 PM by sgqwonkian
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These are good points sgqwonkian. We are always conflicted with price when we issue a new release. And it never matters what the price is, there are always plenty of comments that the price should be less. Even in the face of a best seller such as Dominions 3 and the recently released Bronze and World Supremacy. Even Weird Worlds, the lowest price game in our arsenal at release got many comments that the price was too high.
Standing your ground is getting harder to do. But realistically, we feel the need to run a few experiments from time to time. We learned alot from the 7 day bundle we ran on selected ProSim titles and was probably worth that experiment. We have always offered monthly specials and they have never made a huge impact on sales. They do however seem to bring in a gamer or two to try something from time-to-time that they might not otherwise buy. This whole pricing issue just won't go away and we continually monitor what is happening. I am quite interested to see what happens with the talked about "put it on steam and we don't want it in our stores" movement with the big retailers... |
Posted January 25th, 2011 at 05:32 PM by Tim Brooks
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For me it is quite clear. It's up to you to sell your game for as much or as little you want. No matter if the game is great or garbage, sell it for any price you want.
I refuse to buy any game that is higher than an amount which lowers itself the further away from the release date we go. Paying full or close to full price for a game which is out for a matter of many months or even years...no. Unless the game puts food on my table at the same time, no way. I am not talking just about Dominions 3. For example I bought Call of Duty 4 Modern Warfare just last month when the price was low enough for me. Does this mean that I never buy newly released games? No. But they are very few are rare. One of the things that I do ask for in addition to things like gameplay etc, is graphics. Having been raised (as a gamer) from the days of text adventure, I simply have no patience for graphics that are not top notch or at least relevant enough to the year we live any more. There are a few games that I would buy, Dominions 3 is one of them, but not for the current price or the $5 "sale" or close to that. Sell the game for around $20 and work on a sequel. Trying to milk a game for years without a sequel is just one way of doing this. I am not sure it is the best. |
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Posted February 1st, 2011 at 04:15 PM by Wdll
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Here is my two cents on the matter... Written from consumers point of wiew with my bad english
 I am student and so my budget for entertainment is not so big. Everytime i spend money on something im not spending it on something else. Usually games are quite good for their time/price ratio. But that is true only for games that are good/decent. Bying game is always risky. You will never know what you get... Ok there is rewiews and other stuff like that but my taste for games seems to be quite diffrent from them. From the last 10 games that i have bought maybe 1-2 were good 4-5 were ok with no replay value 1-2 were bad and 2-3 were total waste of money. With total waste of money i mean games that i try for some hours and then left them somewhere to collect dust. By making fast count i found 15 games from my place that are total crap that i will never play again  To put that on perspective i have maybe 40 games... So on avarage 1 in 3 games just sucks. And i am selecting my games with care. What is the point of playing game for two hours if you can find the optimal strategy in one hour? That is one of the reasons i love dominions so much... Good luck finding anything from it in the first hour of playing I feel that buying indy game has bigger risk than buying mainstream game. In my expirience about half of them are bad. They are also more expencive than mainstream games are if you dont buy them too soon after release. Because of that high risk factor im not buying indy games with high price tag. If the price would be lower i would buy more of them. With lower price the risk would be more acceptable. I also like those packet deals where you get more games with lower price because it greatly reduces the chance of being badly dissapointed. If i somehow knew the good games before i buy them then i would be ready to pay more for them. For example if i knew how good game dominions 3 is but had never played it i would be ready to pay $200 for it. If that sentence makes any sense =P I have found the best game to play anyway. It has very complex strategy and its played against human opponents. Its also very exciting and i get money from playing it... Poker  |
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Posted March 16th, 2011 at 11:07 AM by ExHeretic
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I'm surprised that the "Humble indie bundle" isn't mentioned, as is one of the latest, largest and most successful experiments in pricing of indie titles to date.
I like this approach very much, the concept made me feeling good about spending more money on it than I have ever done on computer games before, despite I could have got it for 1 dollar. There are some very interesting articles about this on the wolfire blog, which is also an interesting developer team to say the least. With innovative and positive approaches to complex questions like pricing, source releases and piracy. With the one on piracy being especially interesting I think, since it is a developers viewpoint but neither pro or con, yet very insightful. Sure it is a "slippery slope" when special offers become the norm, but this is also the symptoms of being in the middle of rapidly changing markets, with the digital market evolving quicker than any other. You can compare it to the music industry complaining that people don't want to buy records anymore, and won't pay retail for downloads. But since this complaint is rooted in ethical reasoning, it fails to communicate to a market that is in it's essence amoral, ruled by competition, self interest and technological development. The winners are obviously those who, instead of complaining, exploit new business models, like spotify or online games. I sure hope that the traditional pay-per-copy market for indie games will survive, but it's not a god given right. If that type of business model becomes obselete no ethical standpoints can save it, it'll be adapt or die. I'm a professional filmmaker btw, so I face partly the same dilemmas. I have been forced to develop a hybrid business model, with the single copy sales part steadily shrinking in favor of streaming services, festivals, associated merchandise etc. I find it quite exciting. |
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Posted March 26th, 2011 at 06:56 PM by Fantomen
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lol. Says the guy who works for a company that charges 55 dollars for a game released in 2006.
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Posted December 5th, 2011 at 09:26 PM by Scarmiglione
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I was happy to pay $80 when WitE first came out. I spent the first two months just modding it. So quality games that are constantly improved with patches will sell. On the other end of the spectrum, Warfare Reloaded at GG for $6, is a very realistic modern RTS. WS I spent $30 on for a clueless AI. I mean bad - just play the game and see. I don't think I got an ounce of enjoyment out of it. So, it's basically all over the board right now, but Steam is a definite threat when they start selling the entire TOW series for like $15.
I paid full price for every TOW and HOI game, but still feel I got my money's worth. When WitW comes out, no way I can wait a year to buy it! |
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Posted January 11th, 2012 at 03:22 AM by Rosseau
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Recent Blog Entries by S.R. Krol
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- The Slippery Slope Of Game Pricing (January 9th, 2011)
