Examining Indie Game Pricing 188
As the second Humble Indie Bundle flourishes, having taken in over $1.5 million in pay-what-you-want sales, the Opposable Thumbs blog has taken a look at indie game pricing in general, trying to determine how low price points and frequent sales affect their popularity in an ocean of $60 blockbusters. Quoting:
"... in the short term these sales are a good thing. They bring in more sales, more revenue, and expand the reach of games that frequently have very little marketing support behind them, if any. For those games, getting on the front page of Steam is a huge boost, putting it in front of a huge audience of gamers. But what are the long-term effects? If most players are buying these games at a severely reduced price, how does that influence the perception of indie games at large? It's not an easy question to answer, especially considering how relatively new these sales are, making it difficult to judge their long-term effects. But it's clear they're somewhat of a double-edged sword. Exposure is good, but price erosion isn't. 'When it comes to perception, a deep discount gets people playing the game that [they] wouldn't play otherwise, and I think that has both positive and negative effects,' [2D Boy co-founder Ron Carmel] told Ars. 'The negative is that if I'm willing to pay $5 but not $20, I probably don't want to play that game very much, so maybe I'm not as excited about it after I play it and maybe I drive down the average appreciation of the game.'"
Well, from personal experience... (Score:5, Interesting)
I've bought quite a few indie games off of steam and a couple of older titles off of GOG, all of them for less than twenty bucks a pop, and in most cases I feel I got my money's worth. I don't think I'd have bought most of them at triple-A retail prices, not because I'm a cheapskate, but because the games in question aren't valuable enough to me to justify the higher price tag.
I should also point out that most high profile games don't meet my criteria for the higher price tag either. Of the games I've bought this year, I can only think of two that were worth paying sixty at launch. For everything else, I've waited until the price dropped, or it went on sale. I don't think that the average gamer decides what a fair price ought to be based on what the average price is; we balance how many hours of entertainment we're going to get out of a game, and then decide what we think of as a good price for those hours. I've certainly felt ripped off in the past, buying a game at launch only to find it's only good for a few hours of play, hence my current purchasing habits.
Worrying about price erosion seems like looking at the problem backwards. Make a game worth charging sixty bucks for, and you'll sell it for sixty. Make it worth forty, and you might sell copies at sixty, but many gamers will wait for the price to come down before they buy. And the days of a game only being on the store shelves for a month before being taken down are rapidly vanishing, along with the shelves and the brick-and-mortar stores that house them.
Intangible product (Score:4, Interesting)
We need to keep in mind that online game sales are intangible products. Sure, as a publisher you're paying a few pennies for the download, but the difference is quite negligible, whether you sell 10 copies at $50, or 100 copies at $5. People are already used to "community support", i.e. forums, so if a lower price results in a greater net profit, there's no reason not to aim for such.
Indie games have such small user bases that the growth potential is tremendous. By selling the game at a very low price, you're effectively buying customers. If you do a good job of entertaining them, they will buy your next game. It's nearly-free publicity, which is good because at that level, the game house probably can't justify the expense of a real marketing campaign. Realistically, if you're bringing in less than six figures with your product, be it a game or app, you're better off lowering the price and considering that discount your "marketing cost", rather than paying up-front for promotion which may or may not recoup the investment. Why gamble the company when you can get rich slowly ?
Re:Blah blah blah (Score:3, Interesting)
Guess the message to devs is "cut the slack, keep the dough".
Now only musicians have to catch on.
Average appreciation? (Score:4, Interesting)
"When it comes to perception, a deep discount gets people playing the game that [they] wouldn't play otherwise, and I think that has both positive and negative effects," Carmel told Ars. "The negative is that if I'm willing to pay $5 but not $20, I probably don't want to play that game very much, so maybe I'm not as excited about it after I play it and maybe I drive down the average appreciation of the game.
I very much disagree with this sentiment. Maybe he's referring to reviewer scores, but appreciation itself is not a zero sum game. If person A loves a game, and person B only enjoys it slightly - there was still more enjoyment derived than if only person A had played it...
I love buying games at $5-10 - not only do I get ~7 for the price of a new retail game, but there isn't any urge to "get my moneys worth". If I enjoy it great - and if not I don't feel bad because it was only a couple bucks - on to the next one. That's how it should be - getting something you enjoy, not feeling pressured to play something you really don't because you paid a lot for it.
Also from a marketing perspective I would expect to see more glowing reviews this way - people who don't care probably won't talk about your game - but there will be a few that picked it up on a whim and loved it. Those are the people who will tell their friends about the great deal/gem they found.
Low prices + steam helps (Score:4, Interesting)
I just bought "Defence Grid" for $2 on steam. It's not much money, but I wouldn't have paid any more, and wouldn't have even bothered to pirate it. I probably won't even play, but my brother uses my steam account and he might check it out.
My point is that $2 is a good impulse-buy price. I won't even bother to check a demo or reviews at that price. So that's $2 more than they would have gotten.
I'd be interested in seeing their total profit binned by price.