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?"
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.
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.
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
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.
There is nothing more likely to get me to argue about a bill than "A X% gratuity has been included in your total price". Has it really? Bloody cheek, what makes you think I was going to give you one in the first place and/or that it would ever be a particular price?
I call it rude. It's like the porters who cough politely and wait for their money. The most they will get will be a small lozenge and a recommendation to see their doctor about that cough. Don't say a thing, though, and just walk right out of the room after lugging all my stuff up five flights of stairs and you *will* get yourself a nice tip.
People: stop "tipping" others who do a shit job. You're just encouraging people to do a shit job because they still get paid for it. Instead, tip the ones who do a good job TWICE as much and don't pay the lazy, rude, idiots anything past your legal obligation.
And, yes, the whole "pay what you want" thing is really just a tip-based scenario, so it's hardly ground-breaking. More important would be the results of such an exercise AFTER you done all those sales. I'd be interested in learning just how much good work is appreciated voluntarily, having bought such things myself.
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
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.
You realize they charge you what they get charged by USPS/DHL/UPS/whoever, plus a little for packaging etc., right?
If they let people choose "pay what you feel is fair" for shipping, especially international shipping, 99% of customers would choose "free", and they'd have to compensate by raising product prices. I don't think that's the outcome you desire.
(I am of course not talking about the jerks on eBay or Amazon who sell things for dirt cheap and then charge absurd amounts for shipping, I'm talking specifically about companies like Thinkgeek.)