Slashdot Mirror
Letting Customers Decide Pricing On Game DLC
An anonymous reader writes "How much should game developers be charging for DLC? It seems that one indie dev has decided to carry out a unique experiment. The latest expansion pack for Gratuitous Space Battles is priced at $5.99 — or is it? It turns out there is both a standard ($5.99) version and a discount version ($2.99). And the difference between them is... nothing. The buyers have been left to make their own decisions on whether or not they should pay full price, and send more money to the developer, or treat themselves to a deserved discount. The buy page even lists comparisons of national incomes, average salaries and even the price of sausages to help buyers make up their minds. Will this catch on? Will Microsoft start asking us whether or not we should get a discount and trust us to answer honestly?"
If it's possible, they'll ask YOU for the $5.99 and get your game with it.
It'll catch on just as much as Radiohead's experiment caught on.
There have been multiple cases of "pay what you want" in the last year alone.
Hell, even Slashdot ran an article about this back in march: http://games.slashdot.org/story/10/05/11/1932233/Indie-Pay-What-You-Want-Bundle-Reaches-1-Million
They concluded that after removing those that paid less than five cents, the average price was around $9.20. Hell, they even break it down by OS for you.
moox. for a new generation.
This experiment has been done before in some form, but it generally gives an option of paying nothing, and that's invariably the most popular option. I suspect this may give more interesting results - the main reason I'd often choose to pay nothing when given the option is because I can't be bothered to find my credit card for a tiny purchase. In this particular situation, users are forced to actually figure out a payment method, then make an objective decision about how much to pay. For a small indie developer with a loyal fanbase, I can see a fair proportion choosing the higher figure.
Horse armor, or a quest that's obviously supposed to be in the game because you run into someone trying to give it to you, I will not.
If I then have to pirate the whole game just to get around the DLC DRM, I will.
Will Microsoft start asking us whether or not we should get a discount and trust us to answer honestly?"
Um... no. Not as long they control the distribution platform (i.e. Xbox Live). Also, they've already shown that they believe in the guilty until proven innocent by using product activation features in Windows.
Freedom is drinking a beer in the park when you're supposed to be at work.
Will Microsoft start asking us whether or not we should get a discount and trust us to answer honestly?
It's definitely not say that we shouldn't be paying 1/30th the price of a game just to get a new character skin. Maps packs.. well after being brought up downloading 3rd party maps for free for Quake, Counter-Strike etc, it's pretty grating to have to pay for extra maps on a console. These days consoles are perfectly capable of downloading and storing extra maps, mods etc. Thankfully some games such as LittleBigPlanet and ModNation Racers are starting to let you do this, but I wish it would catch on with console FPSes.
which is totally what she said
It's not a $3 discount on the cheaper one, it's 100% profit on the more expensive.
Preempting the altruistic "I'm funding future development" crowd with "I have bills to pay. I know he does to. Obviously $2.99 covers the cost, so his bills are paid. That $3 goes towards paying mine." More power to you if you have disposable income, you can spend it on his 100% markup if you choose, but you're a mug if you do.
Finally had enough. Come see us over at https://soylentnews.org/
At least for me "DLC" reads as "Stuff we took out from the main release or would give out in a free update but now sell as extra to squeeze more money out of the customers", 'cause that's exactly what has been done by most publishers.
Call it "expansion pack" or "small expansion pack".
Next give some sort of no-monetary-value reward for people who pay the larger amount. Maybe easier access to the developer and the ability to suggest improvements for the next version.
That said, is the "expansion pack" even worth the small amount? For all we know the two amounts listed are "more money than it's worth" and "way much more money than it's worth" and this is all a poor-man's advertising gimmick. Certainly getting the game to Slashdot will bring more sales.
(Disclaimer: I have no idea if it's so or not. Maybe the use of the word "DLC" has put me in a overly-negative mind-set with regards to this and even the large amount is great value. Take my opinion with a pinch of salt).
...but then I decided to buy the discount version, just to stick it to the developer.
:-)
Actually I disagree with his statement "Won't everyone just get the discount version? Possibly. I hope not. If they do, this experiment failed!" If the free publicity doubles the sales of the discount version, the experiment is a success.
Well, maybe not in one country, but M$ prices do differ quite a bit between different countries ... not all of which can be explained by currency fluctuation or tax/customs on the products ...
I'm all for DLC, don't get me wrong; I love the fact that new areas and items can be implemented after a game is released. I understand that releasing new content after a game's initial release isn't free; it costs developers and publishers money, but people really need to look at how much some DLC packs cost. That being said, sometimes publishers and/or developers do some really cool things. DLC that is available for free on launch day? Totally awesome...there was stuff that they really wanted to get into the game, and obviously ran out of time before the discs had to be pressed; I really appreciate it on the rare occasion when it occurs.
But what's with DLC you have to pay for being released not even a week or two after a game is released? Couldn't you have just delayed the freakin' game for two weeks if it was that awesome?!? Seriously, publishers...if there is an amazing dungeon or a few great items that just absolutely HAVE to be in a game, give the developers the extra couple of weeks to implement them into the release version. Don't make us pay extra money because the game had to be released NOW NOW NOW, and there isn't time to include things that you should. Can you imagine if you had to pay for DLC to get the Spear in Secret of Mana, or if you had to pay for DLC to unlock secret ingredients in Secret of Evermore?
Developers/publishers walk a fine line with DLC. They need to be careful.
Living With a Nerd
Sell the game/DLC at the "pay the bills" price. Have a second payment option for "tips". If the customer likes the game/DLC, he/she can go back leave a tip later.
*Don't* expect 15% automatically.
Oh come on. No shit $2.99 covers the cost. It's digital. The incremental cost to the developer to ship another unit for a piece of software is tiny, tiny, tiny. Most of the $2.99 goes to profit, R&D and fixed costs.
Now, he still needs to pay those developers who made the software, buy computers, rent office space, etc. I'm sure he's done the math and knows he can achieve that by selling X at $6 or 2X at $3. Of course, he could go open source, set the price at 0 and make it up on volume [/stupid slashdot joke]. In Econ 101 he would have read about the price curve that suggests that fewer people will buy at $6 but maybe not so much fewer that it isn't the better price for his business. For a businessman, the ideal scenerio is to charge everyone the most their willing to pay - price stratification. This is why you have coupons at the grocery store. People with little money and lots of time can clip coupons and pay less. People who have more money will not and will pay a higher price.
The play here is not that he's trying to sell the 2X number with some paying $3 and some paying $6. He wants to first make sure he is able to break even by selling something like .5 X @ $6 and X @ $3. The $6 price helps him break even the same way the $3 price does. Plus, after Econ 101, you learn the price curve is somewhat BS in the first place. Part of what he's doing is stating "We think the product is worth $6, but are offering a 50% discount to poor people and assholes (distinct groups)." Now, regardless of why I look at the $3 price, I am much less likely to think, "Is $3 too much for this expansion?" because it's already a half off discount and be more likely to purchase. He may actually sell more units at $3 than he would have without the $6 option.
These guys are just remarkably (for better or worse) upfront about the price stratification. He's also a freak'n brilliant marketer. Free publicity on Slashdot is a win.
All software pricing is arbitrary. Always. It's up to a vendor to ask for what they think the product is worth, offer discounts / sales / etc to those who think it's worth less, and for the consumer to either purchase or not. The vendor needs to deliver a product that delivers a fair enough value that consumers will purchase their products again / not leave angry messages on forums or app stores.
lol, the buttons background, maggots for discount, tropical island for normal price.
Wonder if that made a difference on ratios of discounted/normal price clicks.
I sell a bit of stuff online - skyboxes and tools for indie game developers. With one of my tools I made a similar "experiment". I offer the very same product at four different prices, from 10 to 50 bucks. I'm very upfront about it and basically say "you know what the time you save with these tools is worth to you, pay what you find fair".
Turns out that my most optimistic estimates were about spot on. About half of the buyers pick the lowest price, the rest pays more. And yes I've sold several for the highest price.
My lesson from that is that people will treat you fairly if you treat them fairly - be honest about what you offer, tell them up front what the deal is, give them your trust and let them do the right thing. You'll be surprised at how often they will.
Meanwhile, with computer games we're pretty much back where we were in the early 90s when we all traded floppy discs on the school yard and didn't think anything off it. Since you are continuously being treated like a criminal by the software companies, even if you are a perfectly honest customer, with all their limited activations, and DRM and invasive copy protection and key and so on, heck, if you treat me like a criminal anyways, give me one reason to not become one.
Assorted stuff I do sometimes: Lemuria.org
But at least in the Android Marketplace, this is common. Applications often come in a free (as in beer) version, and a "donate" version (as in, buy the developer a beer). Both versions are the same, only one you don't make a transaction. By all accounts it works rather well, but I have a feeling it is because users feel closer to developers then what is typical in more traditional distribution channels.
This is an age old economic concept, although very few businesses seem to believe in it these days. The thing is: it should make even more sense in the internet age where the costs of replicating units is negligible.
For those who don't know, it's a small game, well executed on a small budget. Thirty years ago, it is the kind of thing that made me want to enter the business of writing programs. Now most games (phone Apps aside) are multi-multi-million dollar productions, and just like Hollywood, once they start they can't seem to pull the plug once they realize they're off the mark, "I mean somebody will buy this steaming pile and pay top dollar, we're (fill in the blank studio)".
I have found their business model to be fair: free trials, previews at reduced price at late beta (like a week or two before shipping), all the kinds of things you'd want from a small developer trying to make it in a tough business environment against all odds at the same time treating the customer right; I don't resent them finding incremental revenue in an almost predictably fair way.
We all know it's about market segmentation: buy coffee at McD's, buy it at Starbucks, make it at home, run a sale, use a coupon. These guys are just pretty transparent about it.
The game even supports modding, so if you don't want to pay them ever again, you can go in and edit everything yourself.
People will pay whatever you want them to pay if you prove that your product is worth it. Final Fantasy 14 costs $50 just for a copy with presumably 15-30 days of gameplay. Then an additional $13 per month and $1 per character. In a few months the cost will reduce to $0-$15 for the disc or download and $13 per month and $1 per character. What you do is you milk money from whoever is willing to pay it first and then lower your price when sales are low and claim it as a promotion. You see this on xbox live all the time and people who are eager will always pay more. IMO I think a good experiment would be to have a "stock market" type of DLC cost. The more popular the game is, the more expensive the DLC will cost. The less popular, the less it sells for but the moment people start buying it for cheap, then the value of it goes up again automatically. It pretty much self-balances itself in theory.
If the game is popular enough, like World of Goo, then the money will flow in either way. I don't think it depends on how much you sell it for. It depends on how big the fan base is already showing that the price is already right for the people who already bought it and have experienced that they got their money's worth. Now imagine if Call of Duty 4: Modern Warfare 1 & 2 had this kind of sale for all consoles? The now Defunct Infinity Ward would be uber-billionaires right now.
If I then have to pirate the whole game just to get around the DLC DRM, I will.
Then all the essential components of your next game will become accessible only when you are on-line and only when your account is marked "paid in full."
The moment the indie producer hears the word piracy is the moment he begins looking for a more secure platform - first on the console and then - maybe - on the Mac or Windows PC.
This sounds a little like comcast pricing many different prices for the same thing.
"Will Microsoft start asking us whether or not we should get a discount"
Over all the MS bashing in the last years it was overlooked MS does that all the time. You can decide to pay for the full version or get a cheaper OEM version that's the same as the "real" one... just for a lower price.
Ok, it's not entirely voluntarily but it's the same model. Where's the /. news about that?
This is appealing to the same mentality as a big sign saying "50% off" does. Because it's offered at $5.99, people believe that it's worth $5.99. The part of the brain making decisions sees this as a bargain. If it was just priced at $2.99 then people would make up their own mind about its actual value and be less inclined to pay even that. Of course it isn't worth $2.99, or $5.99. It's worth whatever each person is willing to pay for it. The really clever thing is that some people are actually going to feel a little guilty about getting it for the "discount" price and pay the extra.
They're creations of GREEDY game publishers, pure and simple, and I won't buy into either one. Unfortunately, enough people do, so more and more stuff is withheld from the game in favor of extra-cost expansions and DLC.
Sims 3 is banned here at home because of that, and EA's great success at getting kids to beg (read as: annoy) their parents until they give-in (if you have a pile of Sims boxes at home, I dare you to add up the release-day prices of all of them).
Will Microsoft start asking us whether or not we should get a discount and trust us to answer honestly?
No.
Proud member of the Weirdo-American community.
BioWare recently released a worthwile DLC (Lair of the Shadow Broker) that isn't just a stupid side quest or useless item. It's continues the story so it's more like the expansion packs of yesteryear (before consolefolk invented a stupid new acronym). Plus you get to bang Liara again.
I dare you to add up the costs of your newspapers. Magazine subscription. Phone line.
And I just keep buy clothes after clothes and what have I got to show for it? Rags! Must have spend thousands on them over my life.
Stuff costs money.
How "complete" should a game be?
Is a car complete because I can buy add-ons for it? Is Ford to blame that I need to replace to mats after a couple of years? Why does the car not come with a lifetime supply of fuel?
A game has X amount of content. If more content is created and you get it for free, the costs for the develop goes up but the income remains the same. So companies should never expand a game.
The expansion pack and the DLC are compromise between the producer and the customer. We the customer get more of what we want but at a reduced price, the publisher doesn't have to spend the full development cost of a new game for another round of sales.
But the perfect balance isn't always found. Horse armour for instance. Other games have had great free updates... odd that the ones I remember all happened by companies that are now gone. Giving extra stuff for free, just doesn't pay the bills.
Only if you think content has no costs would your argument hold weight. Sadly content is often the most expensive part of a game.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
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In my opinion, there's two types of DLC. DLC that should've been in the game to begin with but wasn't because they wanted to squeeze a few extra bucks out of the game. And then there's DLC developed a few months to a year after the game has been released. Obviously, I hate the idea of crippling games so I'm clearly not in favor of the first type of DLC. The second type seems great, but when I buy a game new and beat it, I'm rarely that into a game to go back and figure out exactly how to play it a year later. So in other words, DLC sucks.
This can work for smaller developers and even some bigger ones that have already priced their DLC and games properly. For companies like Microsoft though that already charge so much for everything they sell... nobody is going to give a second thought at getting a cheaper version instead of the more expensive. $50 is too much money for Windows 7 Ultimate IMHO. $30 is about right.
So that's irrelevant.
And a pony.
Who has a sense of entitlement? What I do on my computer is none of your business.
i don't know if someone already mentioned this but 2DBoy also did something similar almost a year ago w/ world of goo and shared all their stats including a poll about why people paid the amount they did.
http://2dboy.com/2009/10/19/birthday-sale-results/
You used to get these sequels for games, which later on turned into expansions and then developed into this DLC thing. These days atleast the major companies plan a lot ahead. They tell the developers what to do in advance. Developers accept the terms because they need money to make the games. In these contracts, the developer is required to do updates to the game for period of time or even a sequel - or DLC, which is propably more cost free to do.
If the developer is owned by larger company, then they even might nominate a pointman to the project (game) that get's developed and say what there is going to be and so on. Good example of this is the Mafia II game where the 2009 pre-material shows missions that are not in the final game but instead, sold as DLC "jimmy's vendetta". The DLC lasts as long as the maingame but is sold at 10 bucks. I guess the 2K got a heart now since selling it as full game with 50$ pricetag would have been a ripoff - or perhaps Mafia II was as the content was cut due to "plot not working in-game".
Customers have always decided pricing:
1) By not buying and doing without or
2) By buying competing product B
Or in cases of extremely poor pricing
3) By starting their own business and taking market share with a superior/lower-priced product
Any company that does not do its market research (due diligence) to find out what customers are willing to pay for their product will not survive. You don't start a business unless you have some reason to believe that you can recoup costs (or you'll go bankrupt), provide for expansion (or you'll be swallowed up by future competition) and better your own standard of living (otherwise what's the point of taking the risk). You can't do any of that if you don't know what your potential customers want (i.e. are willing to exchange the fruits of their labor for).
The "Discount Edition" button seems to have maggots in the background.
The "Standard" Edition has a tropical beach scene.
wtf?