Why rampant video game sales are bad for players

http://thecastledoctrine.net/seedBlogs.php?action=display_post&post_id=jasonrohrer_1389812989_0&show_author=1&show_date=1

by xamlhacker • 13 years ago

48 47 13 years ago

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james-skemp• 13 years ago

Wasn't sure until the end whether he realized why Minecraft's pricing made sense; it was beta. You weren't buying a finished product.

I tend to play consoles and while I pick up a few games at full price every year (3 preordered at three moment) I do tend to wait for the price drops (about $10 each time unless the game is a flop) more than sales.

jamie_ca• 13 years ago

Kerbal Space Program is (mostly) doing the same as Minecraft. As they're hitting milestones the base price has been increasing, but they're still allowing themselves to get pegged during the major Steam sales.

The other potential problem with rampant Steam sales (because honestly, they've won the mindshare) is that it's affected my price sensitivity. There's so many good games out there that I've picked up for a pittance, and have yet to play, that I can't really justify paying full price for anything -- if I don't have the time to play the all those other games, why pay more money for yet another game I won't have time to play?

The sole exception to that rule is games with a compelling multiplayer component, as something I can do while socializing with some friends.

minimaxir• 13 years ago

What's really scary is how fast some of the AAA games drop in price.

Bioshock Infinite on the PC went from $60 to $10 during Amazon/Steam sales in less than 6 months.

Crito• 13 years ago

I think the low-priced beta model is a fantastic one for games/game companies that are trying to get themselves off the ground. They get constant user feedback and guidance, and get food on the table (or even rich). In return the players get to give feedback and have it mean something, and get a fun game that gets better over time.

I strongly suspect that if KSP hadn't adopted this model and instead tried to wait until it was done, it would have long since gone the way of vaporware. For an incredibly ambitious game with highly experimental gameplay, in some cases still not fully cemented in place, I think you really need continuous feedback and funding.

chilldream• 13 years ago

I don't think this is the fault of sales. It's simply a statement that most games' "full" price is more than it would be rational for you to pay given your priorities.

WalterSear4• 13 years ago

If there are way more games than you have the time to play, then there's little justification for higher pricing for video games.

Whether you buy them or not, time is the premium, the only difference is whether the money involved in >your< sale goes to lots of developers or just a few.

But there's a twist: games are hit or miss. Since time is the premium, and there is no guarantee that a game will satisfy you, it makes sense that you can buy a large number of them, try them out, and only complete the ones you liked enough to commit time to.

It's hard to see how a system with fewer, more higher priced games would benefit the end user better than the current set up.

jasonlotito2• 13 years ago

If you buy it at launch, are you going to be screwed a few weeks later by a sale? Am I going to make you wish that you waited?

Maybe I'm the odd one out, but I'd only feel that way if your game wasn't good. I happily buy games at full price, and if they are good, they are good. The reason why sales on Steam or other places work so well in attracting people like me is that those places are marketing themselves. Steam is in my face when I play games, so it's not as if I could miss the game.

Is it just the sale that increases the sales? Or is it also the in your face advertising?

WalterSear4• 13 years ago

I wouldn't have bought 90% of the games I have if I hadn't been introduced to them in some kind of sale or bundle.

jasonlotito2• 13 years ago

What point are you trying to make? That you only brought them because they were on sale, or that you only knew to buy them because they were being promoted through what happens to be a sale?

jiggy2011• 13 years ago

I think the biggest benefit of Steam sales is probably lowering piracy. Some large number of the people who got the game at 75% off would probably have just pulled it off a torrent site had that option not been available rather than pay full price.

potatolicious• 13 years ago

For multiplayer games IMO the biggest benefit is a resurgence in activity. Nothing sucks more than a multiplayer game with no other players - and the natural state of all such games is that your active player base drops over time.

A sale is a good way to pump some more people into the pool. In this way I don't think sales are screwing fans at all - if anything it's extending the game's longevity.

WalterSear4• 13 years ago

Before steam sales and the humble bundles came along, I wasn't a paying customer.

The author's ideas about games rising in price is slightly ridiculous when placed in the perspective of an always-growing choice of games. I'm currently in the middle of a video game that was written 15 years ago. His game has to compete with that >and< everything that has been created since.

teamonkey2• 13 years ago

By the time a AAA title gets discounted in a Steam sale it will have been available to torrent for a long time already. A game that lasts a few days without being cracked is remarkable.

chii5• 13 years ago

Whether there is a torrent available doesn't really factor in to the decision to buy a game on sale.

If a game is deemed "worth it" by a buyer, they are going to purchase it, instead of torrenting it. Or, rather more frequently i assume, they first torrent the game when it comes out and full price, play a bit and find it not that great. Then, when time comes for a sale, the gamer chooses to buy it and replay it, because the price is worth it.

afterburner• 13 years ago

If there are more sales, but at lower prices, and it balances out, it only hurts you if you thought you would get a bigger share if people hadn't spent money on other games.

If it doesn't balance out, if sales have decreased spending, then fine, maybe there's a problem. But I doubt that, give that Steam's sale frequency increased after they started.

So how can I tell that he's not just complaining because he wishes he'd gotten a larger share, that he feels he is losing out because people are spreading the money around more?

invalidOrTaken• 13 years ago

I like the way this guy thinks. The full-price-then-sale model is industry standard---but a company looking to build a relationship of trust with its fans might be able to do so this way.

There are certain game companies I love---Stardock in particular comes to mind. I like Stardock for the pretty simple reason that I read Brad Wardell's writing, and he seems like a pretty cool guy.

When you factor in company-customer trust, there are a lot of wacky business models that might just be crazy enough to work:

- What if a player signed on as a Patron? $20/month, and the company comes out with games whenever it feels like it. Only Patrons can play.

- The company benefits somewhat from having trusted players. Documentation, video tutorials, coaching---a lot of this can be done by players rather than W-2's.

That's all I have off the top of my head, but I think there's virgin (or perhaps fallow) soil here.

Brashman• 13 years ago

What stops people from signing up as a Patron right before a game is released? Or put another way, what's the benefit of signing up as a Patron ahead of time?

akiselev• 13 years ago

Well one way you could do it is require a three month minimum which limits how many "blockbuster" games you can play but has staged/unlimited access to the rest of the catalogue. Bigger packages/loyal customers get access to more games.

The trick here is to get the customer on the subscription for long enough to even out the volatility of financing new games, especially for more original games that aren't baggaged by the success and creative choices of prequels. I'm not sure if this can be done for games unless a platform like Steam does it at scale, or someone big like EA does it with predatory tactics (difficult to cancel subscriptions, auto-renew with all plans, etc.)

Netflix is doing this to some degree so we'll see how much success they have. Valve is in perhaps a similar position with its usage data on PC gamers.

chipsy• 13 years ago

When Jason Rohrer says something, it's invariably couched in zero-sum sacrificial thinking. The principle is embedded deep in his games, as well as his lifestyle, and by inverting that viewpoint it's easy to find flaws in his arguments.

With respect to this idea, it models the game as a magical artifact of worship that grows more valuable simply by being older, and then reasons backwards to "this rewards the true fans." But most of the internal models used by players involve the game being some mix of disposable content(interactive stories and scenarios to experience), a pastime or hobby, or a piece of fashion - something friends are also playing. And in the majority of those instances, obsolescence can be assumed; mass piracy of our oldest video games is taken for granted.

Price can rise if the game is continually developed. Minecraft is exceptional in that it's always the same product with large, relatively frequent updates, but the same effect is much more often seen across defined sequels: The first in a breakout hit series might be a low-budget game, and then after a sequel or two it warrants a bigger budget and a $60 price.

stonemetal• 13 years ago

it models the game as a magical artifact of worship that grows more valuable simply by being older,

Sounds rather similar to funding a startup. Those who get in earlier in the cycle take on more risk but usually get to invest at a lower price. If you got in on Minecraft during the beta you had no idea if it would actually make it to release. Every time the price went up it was closer to release and less of a risk. Sounds like his game follows a similar path, no one wants to play an MMO with 2 other users. Rewarding those who take a risk of being an early adopter\community builder doesn't sound like a bad idea.

fat0wl• 13 years ago

yea the upwards pricing model has this strange assumption that indie games will get a cult following, whereas in reality there are not a ton that have much replay value.

i consider Fez to be one of the better indie games I've encountered. it cost a few bucks, probly wouldnt have bought it if it were more. after playing for a while i thought it was aesthetically pleasing but after realizing the task of the game & how id have to decipher these things it kindof seemed like the conclusion was already mentally within reach & playing it out would be sortof laborious.

the reason high price tags fit high-budget games is they make the missions nuanced enough that even if the game is a flop there is enough variation to keep you entertained, as a lot of manpower went into the features of the engine

i like the concept of indie games but i'm too skeptical to get one with a high price tag only to find that its focused around 1-2 core tasks and therefore barely worth the value whereas full-featured studio games have probably already dropped to the same price or below. prices are relative, its a competitive market

i'm all for ingenuity & creativity but any realist will note that lots of indie games are lacking in this as well

Semaphor• 13 years ago

I stopped buying games at full price. What I do now is either buy them in sales/bundles or I pay over full price because I really want the game (kickstarter).

I wonder how KS to Steam Early Access fits in there, for Wasteland 2 it's clear that the game will be cheaper once it is released. There is no secret, it's been said over and over again.

TrainedMonkey• 13 years ago

I think this misses a few key points:

1. Steam is digital, there is almost no cost associated with "selling" a game, almost everything you sell is profit. Thus, it is somewhat disconnected from standard sales where dropping price too much can hurt you.

2. Steam does not allow you to buy physical games, you can't take a game out of steam. What you are paying for is for game to be added to your digital collection. Collection is a key term here, that what steam sales are all about. In modern times nobody has enough time to play all the good games, but we still want to buy them. I know a bunch of people with huge digital collections on steam.

3. Author seems to be divorced from realities of economies of scale. As things get cheaper, the audience gets wider. Essentially this means putting game into hands of more people.

4. More players is good, steam trading cards means that more players = more sustained profit.

stefan_kendall• 13 years ago

More users is not always a good thing. Support costs increase linearly for a while with the user base, and then I'd suppose superlinearly.

Apple has departments of people dedicated only to taking phone calls.

I would rather have 10 users at $10,000 each than 100,000 users at $1 each.

XorNot• 13 years ago

Games aren't business software. You had to fix the bugs anyway, but you don't have to add new features all the time after release.

mentos2• 13 years ago

This waiting game is likely decimating your player base and critical mass at launch by spreading new players out over time. And your fans, who are silly enough to buy the game at launch and waste money, get to participate in a weaker, smaller player community.

It seems like part of the problem is that some of his games (MMOs?) need a player base to realize their potential. In which case I wouldn't consider these multiplayer games the same products as other single player video games which don't require a player base.

If your game requires a player base, consider a freemium model that allows you to get players in the game contributing to the community/network effect, but also allows you to generate a profit from the inevitable ~10% (of a much larger player base) that will buy extra content in your game.

chii5• 13 years ago

while it's logical to argue that an MMO style game benefits from a freemium model, i rather argue that a freemium model destroys the craft by turning game design decisions into business decisions (that is, whether you morph your game design/mechanic so that you can extract more money). This is a terrible trend i m seeing recently with many games (and especially true of mobile games).

I rather pay a $15 subscription and play a game designed without fremium in mind, than pay $15 in In-App-Purchases.

mentos2• 13 years ago

Well I think a lot of subscription MMOs are already compromised by the fact that they have an incentive to keep you around paying. This makes for a lot of the 'level grind' you see in MMOs.

wonderzombie• 13 years ago

This is the problem with assuming humans are all rational, utility I maximizing machines. When a game like Skyrim comes out, I don't care that it'll be $45 instead of $60 in some months. My friends are playing it, the Internet is playing it, people are making memes.

I picked $45 as an example price on purpose, because games which are brand new (according to my anecdata as someone who couldn't stop refreshing Steam in Dec), newer games just aren't as deeply discounted as older ones.

So no I don't buy it. There's a lot to be said for playing the new and shiny if you can afford it and if it's great. The only time I hold off on for a Steam sale is for a game I wasn't going to buy anyway. In a sense he's committing the same fallacy as the RIAA did by presuming that, in the absence of piracy (or sales in this case) people would just pay full price. Maybe some would! But it's fallacious to ignore the difference an incentive such as a sale makes in purchasing at all vs no purchase at all.

Periodic• 13 years ago

The author somewhat addressed this when he mentioned that the number of people buying in at the lower price that wouldn't have bought at full price have to offset the people who wait.

However, I think you're completely right that the number people imagine exist may not be there. Obviously 100% of the sale buyers would have paid full price. I know that the majority of games in my Steam collection are not games I would pay full price for, but they are game that I was happy to pick up in a Humble Indie Bundle. Half the games in those bundles I don't even plan on playing ever and just bought because they were bundled with a few games I thought might be interesting.

Choosing to participate in a sale increases revenue over not participating, but the author is worried about a world where sales become the new norm. Of course, if that's the case, bump your price from $16 to $30 and feel free to participate in those 50% sales after you've done your initial price bump. The market will sort that out.

Additionally, sales are great for increasing brand awareness. Many retail sales aren't designed to make money on their own as much as get people into the store where they might buy full-price merchandise. As an anecdote, I bought Terraria for something like $2.50 on a steam sale. When I first heard of it I thought it didn't sound that great. It turns out I love it and spent 60+ hours playing in in the span of a month. Now I will definitely buy the company's next game, Starbound for full price when it's released. If they hadn't had the sale I would never have bought either game.

chii5• 13 years ago

The author of the blog is making, imho, the classic mistake that the music industry makes when calculating potential revenue.

He makes this quote:

If just half of the players who buy the game during a 50%-off sale would have bought the game at full price if that was their only option, we'd already have a wash. What fraction of sale-waiting players fall into this category? I suspect way more than half. The picture gets even worse for 75%-off sales.

Which is a plain wrong assumption. The buyers of a 50% sale would hardly contain any who would've bought it at 100% price. Those who would've bought at 100% price have _already_ purchased! This is the same reasoning that music industry counts lost sales in - if they pirated it, then they _must_ also would have purchased at 100% price had piracy been prevented, because the media is so rock solid that it's assumed that the acquisition is going to happen no matter what, just the route to it!

corysama• 13 years ago

We're talking about two very different types of pricing strategies that each work very well for two very different types of release.

With a big-bang, "it's done, ship it" release, going out at a high price captures high revenue from the few high-expectation customers. Dropping the price later captures remaining revenue from the many low-expectation customers. Steam-style repeated sales have the bonus marketing benefit of being noteworthy and counter-intuitively do not appear to cannibalize high-revenue sales much if at all.

With a slow-burn, "it's not done yet" release, going out at a low price matches the general low expectations for the product and has the bonus marketing benefit of getting talkative early-adopters on board early and also getting them increasingly excited as development proceeds. As quality increases, price increases accordingly. This has the bonus feature of putting some time pressure on customers who are on the fence about the cost/value proposition, but want to lock in a lower price by buying early.

Dysiode• 13 years ago

I'm largely a fan of the idea I've felt the burn of the "I paid full price for this because I appreciate your work but now it's 33% off?" moment (Borderlands anyone?). I want to see that abolished. Because I've seen a lot of negative feedback of the argument, I want to offer an addition to it.

As an example, I had my eye on Kentucky Route Zero since I saw it in IGF and I fit the example user "It'll go on sale. I'll wait" But after a year it only went on sale for 50% (crazy, I know) and that happened a couple times. At that point, I knew it wasn't going to go to 66% or 75% any time soon so I picked it up. I can see a happy medium with sales where you make it clear that you won't go on sale for a certain period of time and/or for a specific discount. You don't necessarily have to verbalize that either. I don't follow any KRZ news but it was clear that that price point was not going to change quickly. This way you still get the press about sales (I saw a lot of KRZ at 33% and 50%) without having to screw fans over.

I'm sure there are a few ways of strategizing it that would require some experimentation (e.g. a bit before a steam sale, have another 10% type discount like might be seen on launch week but make it clear that it's not going to go below that). There are also more mediums for sales with the Humble Store now you see a lot of games with shallower discounts.

I will say I don't think this model works as a long term plan however. I like the idea of starting low for pre-orders and then increasing the price over time, but I don't think it would work as expected over a two week period. With Minecraft there was the expectation of more content over a period of a year or so between increases. It may still be viable but that may be a case for early access. Make it clear there that the price will increase when it's finished.

I hate seeing what appears like developers feel like they have to sell out on their baby, and I hope something like this can work.

kevin_bauer• 13 years ago

"Hell, No!, Never! ... or so, were my first thoughts, because aren't we brainwashed into thinking that's the way how the market works?

But on second thought: maybe he isn't so of the tangent. How many games did i buy, but never played, even never touched, just they were on sale? And how many games, which i really, really wanted to try did i never buy, because i thought : "Aww i could buy three for the price of this one! So let's wait for the inevitable sales-offer.", just to loose interest, because i was occupied otherwise and a half year later already new games were flooding the market.

So it boils down to price, time and satisfaction! Maybe this is another triangle where you can move just on the axis, and never have all together.

The most limiting factor is time. You can only play one game at a time and if it produces satisfaction you probably would be willing to pay a higher price.

lawtguy• 13 years ago

The reason Steam does sales is because they make more money: http://www.rockpapershotgun.com/2011/10/24/less-is-more-gabe.... From the article, they expected that cutting Counter-Strike by 75% would result in 4 times the number of people buying it, thus being revenue neutral. Instead 160 people bought it for every person that regularly did, this increasing the revenue by 40x!

He's right about charging less in alpha and beta: those players are taking a bigger risk and for a multiplayer game he needs to build critical mass. But after the game is launched, Valve's results show that sales make you more money, not less.

Why rampant video game sales are bad for players

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