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Examining Indie Game Pricing
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.'"
Need more demos for games. Sometimes a game looks like shit but may play really well or vice versa. I'm more willing to download a demo or a game with limited features then I am just to plunk down some cash after only seeing only a handful of screen shots and no video.
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.
Erotic is when you use a feather. Exotic is when you use the whole chicken.
An indie developer studio can charge $5-15 per game and most of the cash goes to the people who made it. A traditional big studio game sells for $50 and maybe ten cents goes to the developers. The rest goes to a faceless corp that is manned by MBas who hate games anyway.
Captain anti-corporate there doesn't know what he's talking about.
First off, almost all games for big companies are works for hire. What that means is that the company employs the developers, designers, producers, artists, and so on to make the game. It can be as a full time or contract employee. Sometimes it is a regular salaried job (often the case for developers), sometimes it is a hourly contract (like $X/hour spent testing or something), sometimes it is a specified contract (like $Y to produce a musical score for the game). At any rate it is a very up front sort of arrangement, much of it very normal "employee works full time for employer" sort of thing.
The next thing is that these AAA titles are MASSIVE in terms of the teams that work on them. It isn't a developer, it is a team. Take Mass Effect 2. It credits 1 lead programmer, 1 assistant lead, 26 programmers, 3 localization programmers, and 6 additional programmers. So just on the pure "coding" part of development, there were 37 people. There were also all sorts of designers, testers, artists, voice actors, and so on. So, that no one person got a millions of dollars, even though the game had a multi-million dollar budget, is unsurprising. All those salaries and contracts add up to a lot.
Finally, as this all implies, the financial risk is assumed by the publisher. They pay people for their work, as the game is being developed. If it tanks, well the publisher is out their investment. If it succeeds, they make money. This isn't like an indy title where you put in work and hope to make money in the future and if it bombs, you get nothing for it. The people who made the game are compensated regardless of success.
Now I'm not saying all developers are paid what they ought to be (part of the problem is there is a bit of over supply since so many people want to make games) or that the publishers don't often make a lot of money (though many of them have gone through tough times, Atari has been bleeding red ink as of late). What I am saying is it is nothing like the music industry "We pay you a tiny royalty and deduct everything from it," system. It is very much a normal "pay for work" system as most of us have for jobs.