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Valve's Newell: One-Price-For-Everyone Business Model 'Broken'
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."
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.
In other words, now, instead of having a bunch of friends harass you because they want to build a bigger farm, your friends will actually get monetary recompense for harassing you. Looks like I'll have to unfriend even more 'friends'
"First they came for the slanderers and i said nothing."
Yes, because the object of the game will cease to be capturing the dragons or whatever, and become trying to get the cheapest price/most cash refunded. This will usually involve doing things that aren't particularly useful to others but which it is possible to fool the system into thinking you are a 'fun guy to play with'.
This is basically what happened on /. with karma- for some people the object stopped being an interesting conversation and became karma whoring to increase their score.
Trying to make money from something that isn't scarce is silly. Charge for the scarce goods not the stuff you can easily copy. The very first copy is scarce. Support is scarce. Commissioning people with talent is scarce.
I thought bottled water in places where clean water is plentiful for almost nothing would never take off. I was wrong. People aren't rational.
These posts express my own personal views, not those of my employer
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, 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 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).
This is my footer. There are many like it, but this one is mine.
Something you may be aware of is the increase in popularity in gaming over the past several decades.
That translates into more households with more than one gamer, and more households with more than one gaming generation.
I game, my kids game, I have many friends whose partner games.
As an individual steam user, I find your prices generally reasonable, your service adds enough value (ignoring ethics and judging strictly from a convenience perspective) to justify paying you and using it over the hassles of both piracy and retail. Good job to you and your team on getting (me) there.
However, I, like many geeks of my generation, have now evolved into a family of five, and am no longer an individual steam user.
This is where the problems start, and you push me, your customer, away. Why? Because I'm a dad, and my gang all play.
For the sake of making a point, I will ignore 'offline mode' because the games we care about are online.
Here are the options you give me:
Option 1. Have one steam account per person, and either buy many copies of each title
(or, I am told, go through a cumbersome process that costs 10$ processing fee to have your support move the title between accounts, this option is too painful to be practical. ).
Insisting I have a separate per-game license for each kid makes sense and is fair if we will be playing concurrently (and it is A-OK for you to sell us a 'borderlands 4-pack'. I'll buy it.).
This makes no sense if I'm done playing a game, uninstall it, and my kid wants to have a go. Realistically, you're dreaming if you think you'll get me to pay twice. You'll either give me a way to let my kid use it, or I'll take my business elsewhere to GOG or direct2drive or retail, because they will.
Option 2. Have one account for what I'll tell you is /me/, but what in reality will be the whole family. I won't tell, you won't know. Sadly, that means that two computers on my home network can't be "on steam" at the same time, and I can't play online game X while my kid plays online game Y. Plus, it'll get all my steam achievements gunked up with my kid's ones. I don't want that. Force me down this route and, again, I'll go.
Option 3. I'll create a separate steam account for every game I purchase. This will make your product into a very inconvenient one with a flaky user experience, no achievement history etc, and I'll take my business elsewhere. Too much hassle.
Here's the news. An entire gaming generation is now very busy having their children reach gaming age.
You can put some weight behind those brave words you said. The solution is dead obvious.
The recipe is:
1. One family "billing account" (that's a BILLING account, not an application account you sign into steam with) with a single billing method. If a single billing method isn't enough to deter most of the unrelated people from pooling into a "pretend family" account and costing you potential revenue (it probably would be enough, and while you may lose a bit of immediate revenue, you will make huge gains in customer loyalty by trusting them), then put your thinking cap on and figure out how to structure a plan to include real families that count money together and exclude most of the freeloaders. You have smart people working for you.
2. ONE family-wide game/license library.
3. Several "gamer" steam accounts, one per real person managed by the billing contact (the guy with the credit card who vets the games, aka the parent), without needing to involve you. That's what web interfaces (or your application) are for. These steam accounts should all be able to go online concurrently, and can all have their own (SEPARATE) steam achievements, and can be use different games at the same time. If they want multiple people to be playing the same game at the same time (that thing we call co-op play is very popular in families btw) they need to purchase and own multiple licenses. Keep 2-pack, 3-pack and 4-pack deals coming.
Yes, this will mean you may have sev
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"Unless you're post-filtering the water coming from the tap, it's got all sorts of stuff still in the water that can be objectionable, harmful over time, etc."
Numerous studies have found that city tap water generally safer, cleaner, has less bacteria, tastes better in blind taste tests, etc. than bottled water. The bottled water industry has numerous "bacterial and chemical contamination problems" per the NRDC.
http://abcnews.go.com/2020/Health/story?id=728070
http://www.nrdc.org/water/drinking/bw/bwinx.asp
We know where leadership by an anti-intellectual "strongman" who scapegoats minorities and likes boisterous rallies goes