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PC Game Prices — Valve Starts the Race To Zero
An anonymous reader writes "Last week Valve made an interesting but seemingly innocuous announcement: they're giving game developers control of their own pricing on Steam. Nicholas Lovell now claims that this has effectively kicked off a race to zero for PC game pricing. He says what's starting to happen now will mirror what's happened to mobile gaming over the past several years. Quoting: 'Free is the dominant price point on mobile platforms. Why? Because the two main players don't care much about making money from the sale of software, or even In-App Purchases. The AppStore is less than 1% of Apple's revenue. Apple has become one of the most valuable companies in the world on the strength of making high-margin, well-designed, highly-desirable hardware. ... Google didn't create Android to sell software. It built Android to create an economic moat. ... In the case of both iOS and Android, keeping prices high for software would have been in direct opposition to the core businesses of Apple (hardware) and Google (search-related advertising). The only reason that ebooks are not yet free is that Amazon's core business is retail, not hardware. ... Which brings me to Steam. The Steambox is a competitor to consoles, created by Valve. It is supposed to provide an out-of-the-box PC gaming experience, although it struggles to compete on either price or on marketing with the consoles. It doesn't seem as if Steam is keen to subsidize the costs of the box, not to the level that Microsoft and Sony are. But what if Steam's [unique selling point] was thousands or tens of thousands of games for free?'"
The "race to zero" has done nothing but create a wasteland of crappy "freemium" games. Dungeon Keeper is the culmination of developers' efforts to move the pricing model away from initial purchase and into in-app purchases. The practice has absolutely decimated gaming. I don't necessarily see Steam's move as a good thing.
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The end of innovation kills capitalism.
If technological innovation slows down, we'll have to promote marketing innovation.
The point is to make people happier with "the new", it doesn't matter how.
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Even now, the mobile faithful still cling to their hopes that someday mobile gaming will be as revered as console games, but their insistence? Nay, their obsession that games must be free, or at the very least cannot cost more than $1, has absolutely destroyed and incentive for companies to build better games. Why bother making an epic RPG or sprawling adventure game when you can pump out some random one-gimmick game or straight up clone in a few days and rake in the advertising money for little to no effort?
TFA is, I'm sorry to say, complete drivel. It ignores two key considerations.
First, Valve's platforms - Steam-on-PC/Mac and the forthcoming Steambox console - are home platforms. Where the pay-to-win model has achieved some success (and even there, the successes are outweighed 100-to-1 by the failures) is on the mobile platforms, where people play for snatches of a few minutes here and there. PC and home-console gaming remains dominated by more substantial offerings, with more significant development budgets and (frankly) a more discerning audience.
And the second point is just that; games cost money to develop. Quite a lot of money, these days. We're already seeing an increase in the RRP for games on the new consoles, which, irritating though it is on one level, is probably something the industry has needed to do for a while now. Long story short - nobody is going to be rushing to give these games away for free. If Valve wants a console, retailing at a per-unit profit, whose selling point is a mass of free titles (and I don't believe for a second that it does) then it will need to throw a massive, unprecedented subsidy at game developers. And that's just not going to happen. We've seen what happens when you try to launch a console whose selling point is the kind of games you actually can give away for free or near-free. It's called the Ouya.
Which, as we all know, is doing just splendidly. Or not.
What Valve's move does unlock the possibility of is smarter and more responsive pricing for games. And this is where there's real potential for the industry to do better.
Historically, we've sold games as though they were movies. There's basically one price point when they're new and another for when they get a budget re-release. Ok, indies and the like have always played around outside that system, but the actually relevant commercial developers have had very fixed price structures. What Steam has moved towards - and seems set to move further towards - is pricing that can price games more accurately reflecting the value they offer, their review scores and their week 1 sales.
Bricks and mortar retail stores sometimes try this, but the way in which they purchase stock and are insured on those purchases makes it a last resort for them. The ability to flex prices rapidly at the publisher level is much more useful. If you have an Elder Scrolls style RPG with a huge development budget and hundreds of hours of game-time, then go at $80. If you have an average sized shooter, perhaps in the $60-70 range. If you have a 2d platformer or sh'mup, then perhaps you should be thinking more about $20-30 for your first release.
Nintendo, in particular, desperately need to learn this lesson. My theory on the unnoticed reason behind the Wii-U's continuing disaster is that it's just too obvious that Nintendo's pricing is vastly out of whack with the value their games offers. Ok, the $60 price-point might be ok for something like Super Mario 3d World, but is it really appropriate for 2d platfomers (Donkey Kong, New Super Mario) or HD remakes which sell for $30 on other platforms (Zelda: Wind Waker).
No long slashdot post would be complete without a car analogy, so I'll say that game pricing needs to be less like movie pricing and more like car pricing. It should have a much wider range and be more responsive to features like production costs, quality, features, brand and image.
They don't need to pay any distributors, middlemen or retailers a cut either.
Have you been on Steam lately? Even when there's not a sale on, the prices are pretty impressive.
No kidding!!! What do you say at this point?
I don't think that the iPhone and Android are the best model for comparison here. iPhone and Android games more or less filled the same niche as Flash games, which were already dominated by free.
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99% of those 99 cent games are "tap the screen at the right time to watch a cute animation" one-trick ponies. While all right to waste a bit of time while you're waiting in line somewhere, it certainly isn't something I'd willingly pick up when I sit down to play a game.
Also, TANSTAAFL applies universally, and hence also to gaming. "Free" games are rarely free. One of three things is almost certainly part of the deal:
1. Handing over your privacy.
2. Enduring endless streams of ads.
3. Micropayments to keep playing.
And usually it's more than one of them. Somehow I doubt I'll be the only one who will not enjoy this kind of gaming on a PC. When you sit down to play at a PC (or console for that matter), you don't want to play a one-trick pony game. You want to be involved, challenged, entertained. It's not just something you do to kill some time waiting, i.e. what mobile games are very often used as.
What I could see is that we're going to see a lot more low budget games from independent programming teams that want to cut out the studios, either to avoid dependency or to avoid being told what to do (or both), people who want to make the game they make because they themselves want to see it come to life (let's be honest here, does anyone think those "freemium" games are something any developer WANTS to develop? Then whey should they be free?). They might even be inclined to sell it for a low price, somewhere in the vicinity of 10-30 bucks rather than 60+, while not offering any less gaming value and neither suffering from one of the three problems lined out above that "free" games usually have.
But free, I doubt. Games are not like apples, they're not identical and only differ in price. You can't simply say "Oh, Game A costs 20 bucks and Game B costs 10, so I buy Game B". What if Game A is more what I'm looking for and Game B is nothing but a cheap knockoff of a game idea that has been trampled to death ages ago? Why should I buy Game B in that case?
Games might get cheaper, and studios will maybe lose their position as kingmakers, but I highly doubt that PC gaming will go the way of mobile gaming. It's a very different market with a very different audience (or, rather, with an audience that has a different "taste" on PC compared to mobile devices, it might even be the same audience).
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Steam has for me drastically lowered the value of a game, because while it is ONE thing to see game slowly decrease in price over a number of years, it is another to find prices slashed to 1/4 of the price seemingly at random.
Well okay then, I won't buy unless there is a deal going on... but I want to play right now, thepiratebay! Always the best deals!
I kinda like to know that if I pay a premium for a newly released game, that it is "worth" it and that it is not going to be on a sale for the fraction of the price a week later. It ruins the value of a product because it shows the product has no inherit price but is rather just a charge put on the product for the sake of it.
Same as say a public toilet at a station, they can charge 1 cent, a 100 cent or a 1000 cent and it has nothing to do with the cost of providing the service, it is just an amount someone thought up. If a product can be sold for 1/4 of the price on week, it never had full price value to begin with, that was just a sucker price.
I don't want to be a sucker. I am one but I don't like my webshop telling me that I am one.
Because I can tell the game producer they are suckers too by downloading the game for free.
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I'll pay on GOG.com rather than free with DRM.
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Free is the dominant price point on mobile platforms
No, it isn't. free-to-play is, which is something else entirely. Most F2P games are considerably more expensive then traditional games if you buy the equivalent of what would've been in a box. It's the razor-blades business all over again. It is full of lies and deceit and psychological warfare on the customer who is lured in with "free" and then shaken down for every penny with addictive (instead of fun) gameplay, click-bait and carrot-and-stick tactics.
It is, in two words, distasteful and dishonest.
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"I'm putting my game on sale for a couple weeks" is not even close to "I'm moving to a freemium model". Lovell is an idiot, and shouldn't be taken seriously.
Because as a game developer I see two main motivations that are essentially the same as every other artist:
1) making enough money to live
2) bring your stuff to as many people as possible
so if I have the choice of selling 10Mio copies at 5€ or 1Mio copies at 50€ for me the first option would clearly win.
Apple makes a ton of money off app store licenses, and Valve makes their money selling software. The steam box is a device for getting people to buy games; it's never going to be even close to the profitability of selling games.
Selling software is a great deal for the vendor because the per-unit cost to them is effectively zero. Any theory that the vendor is going to try to eliminate the cost of software so they can make all that money on hardware is a stupid theory. And I don't mean "after sufficient research you can disprove it", I just mean stupid straight up.
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The question is not how many freemium games there are, it's whether their existence is impacting the market for purchased games. In ages past shareware and freeware had the lions share of the PC gaming market (at least among every gamer I knew in middle and high school, and most of my older friends as well), for the simple reason that nobody had $30 to throw away on a game that *might* be good. Consoles were the only place that purchased games dominated, for the simple reason that there were no free games available - but everyone I knew who had a console also had a huge library of free PC games.
And frankly these days the odds of a given pay-up-front game actually being good seems to have fallen dramatically. High production value != a game worth playing, to say nothing of the vast oceans of shovelware. Of course freemium games are also far more expensive and annoying than shareware ever was, but at least you get to see if the game is any good before you pay anything.
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There's a right and wrong way to implement in-app payment in a video game. The wrong way is the mobile version of Dungeon Keeper. One of the right ways is to provide one free-to-play episode that ends on a cliffhanger, and then a one-time payment to unlock the rest of the game. This model is called "shareware", and it was a big success for Doom.
http://en.wikipedia.org/wiki/F...
The free-to-play model originated in the late 1990s and early 2000s, coming from a series of highly successful MMOs targeted towards children and casual gamers, including Furcadia, Neopets, RuneScape, MapleStory, and text-based dungeons such as Achaea, Dreams of Divine Lands.
But even that's wrong. MUDs date back to 1987.
Free to play games have been around for 27 years and they haven't destroyed the market for premium games. Valve letting game developers set their own prices is not going to suddenly make the people who have been willing to pay for premium games stop paying for them.
Maybe I am just old-school, but I don't see the attraction to F2P games (in terms of alternate monetization methods -- not totally free games). I would much rather pay a fair (but not exorbitantly high) price up-front for a game I think I would like, or have heard about, or even played the trial version of, rather than downloading for free, and dealing with micropayments, in-game advertising, or other bullshit when I just want to relax and get a little entertainment, an escape from all that crap.
This is the model I plan to use for all my games as well, and I have no plans to use Steam in their distribution, either.
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