Valve's Newell: One-Price-For-Everyone Business Model 'Broken' 374
Fysx writes with recent comments from Valve co-founder Gabe Newell about how he thinks the traditional video game business model is flawed:
"The industry has this broken model, which is one price for everyone. That’s actually a bug, and it’s something that we want to solve through our philosophy of how we create entertainment products. What you really want to do is create the optimal pricing service for each customer and see what’s best for them. We need to give customers, all of them, a robust set of options regarding how they pay for their content. An example is – and this is something as an industry we should be doing better – is charging customers based on how much fun they are to play with. Some people, when they join a server, a ton of people will run with them. Other people, when they join a server, will cause others to leave. We should have a way of capturing that. We should have a way of rewarding the people who are good for our community."
Re:| Dream (Score:4, Interesting)
I wonder how this will affect all my single player games. Treat the NPCs well, and I get a discoount?
Valve would do well to remember that while the online games can be cash cows, they are also more risky and carry a much larger operating expense. It's the single player games that provide the slow secure income that allows you to do the social gaming. Reward those users, because they won't require additional expenses on your part after buying their games, and won't fill up your tech support with questions on port forwardings and complaints about latency.
Curses be the socially inept! (Score:5, Interesting)
So lemme get this straight, Mister Newell: you wanna charge socially awkward and inept people, like loners and people with Asperger's Syndrome, a premium simply because they don't benefit your Bottom Line above and beyond what they pay for the game? You want to penalize them for being "unpopular"?
Wow, as if they didn't get enough of that mistreatment in high school, now they have to endure it in the marketplace.
Also (Score:5, Interesting)
You find that people in online games quit for all sorts of bad reasons, including "That guy is better than me." I've seen that kind of thing in Bad Company 2, servers that get cleared out because people are good and nobody likes losing all the time.
I play BC2 with a small group of friends, all who are pretty good at it. We are all above average. Get a couple of us together on a server, and we tend to slant things to the side we are on. This often leads to lots of people leaving on the other side. Sometimes it leads to a server dying because people leave, the server switches people from our team, they don't wan to be on the other side so they leave and so on.
Even happens when we are facing another group who is playing together. That is most often the sort of game we get in, since that is where there are a lot of spots on one side. We'll get in and a group of people in the same clan are on the other side. We'll turn the tide of the battle and start winning, and they'll all leave because they want to beat up on people.
So should we get ranked down and charged more because we are good at the game? Now I should add we don't talk shit, we don't harass people, we just play the game to win. People leave because they like to win and aren't having fun losing. Should we get penalized for playing the game, as intended, and being good just because others are not as good and do not care to play against us?
Re:Hrmmmm, interesting (Score:5, Interesting)
Sorry. I made the fatal mistake of RTFA, and just Re-RTFA just in case I missed it, and I still don't see it. Nowhere is he talking about micro-payments for extra content or eye candy. Also, this isn't "a lot of payment strategies" your examples are "different products". There is a HUGE difference.
I have no problem with these different products, such as paying for eye candy (like more hats in TF2!), or paying for DLC. No problem there, and this isn't what he's talking about. Also, this isn't price discrimination. You could loosely apply third degree price discrimination [wikipedia.org], but this would be more like "You bought a more expensive variant of the game and it comes with a golden hat, which can't be purchased later".
What he's talking about, is proper price discrimination, and he offers these two examples:
While the latter is a possibility and they're already doing this (such as "free to play this weekend", "DLC", "WoW pricing model", etc), the former, is what everyone is discussing.
Okay, so your per game rating means they can't apply discounts beforehand, additionally it's open to the biggest weakness of "how do we rate 'fun'". Do you know an easy way to calculate this? A way which isn't open to gaming? A way where you don't give the trolls a very nice weapon? A way where the administration overhead doesn't increase disproportionately? A way which allows you to trust servers that you don't run?
Quite frankly, you're saying I have an "inability to see it implemented", where as you've got what I like to call entrepreneurs myopia, it's like marketing myopia [wikipedia.org] but it's where you don't think through the entire solution, systematically, and instead jump to simplistic solutions which don't necessarily reflect reality. We all get it, especially entrepreneurial types (Read: ADD/Bipolar types).
Also, this sort of analysis is what I do. Implementing different revenue models, is extremely difficult, and requires looking at each stakeholder (particularly the ones which are customers or associated in that way), then considering how they make their buying decision, considering what all the incentives produced are, what sort of proportions these would be produced in, and what the sum of these two would be. You're bound to get a lot of this wrong, because incentives aren't obvious, until a lot later. The dotcom boom was a perfect example of this, many different revenue models which on the surface seemed good, but underneath was a house of cards. Though hopefully we likely wouldn't make the valuation feedback mistake again (Well, at least as obviously).
"Brainstorming" I've found to be useless, you just get a pile of ideas (which are never in shortage), instead of rigorous analysis. Which is what's actually required!
Anyway, I sort of went off on a few tangents here, it's hard to stay on track when discussing such complicated ideas, in essentially an open forum (and they are complicated ideas, when you look at them in full).
Re:No (Score:5, Interesting)
But despite all Valve's ideas, they still take about 5 times as long to release a game as their competitors, and whilst they're games are good, they're not so good that the increase in release time can be justified.
The thing is that Valve games have polish. Its not just about how much content is in there, but how smoothly everything fits together. Portal 2, at least in single player, is an exceptionally well done game: zero-glitch high-immersion with voice acting and model animations that are top-notch.
The games are not only 'good', but are 'high quality' too. What other game house can say that?