The Magic Number – The Cost of Gaming

The Magic Number – The Cost of Gaming

Doller Coin big!

With certain new games set for release at ever higher prices, while others (such as Men of War) have a distinctly lower price point and regular sales, it seems time (as ever, I suppose though) to think about what games should cost. Rather than blathering on in an opinionated fashion, I did a little survey, firing off a short list of questions to a section of The Reticule’s eminent friends in development to see what they thought about it.

Firstly, I asked a pretty simple starting question:

  • 1) Do you think games in general are released a the right price? Should they be more or less than the £30-£35/$45-$50 that most mainstream titles seem to be released at?

Perhaps most important to bare in mind here is Vic Davis’ (Cryptic Comet, Armageddon Empires/Solium Infernum) observation that ultimately we live in a free market, and that furthermore:

“The big question of course is what the definition of “correct” is.  A consumer, a socialist, a CEO of a mega games corp and a small time entrepreneur like myself will have probably have different answers.”

At the end of the day, the industry itself is as wildly varied as the types of games it produces. There’s numerous tiers of organization each representing different niches; and for each one there’s differing costs to bear in mind, and different goals to reach.

Following on from this, Ron Carmel (2D Boy, World of Goo) too notes that we have to determine what the right price is, and also highlights that the criteria can vary massively:

“Is it the price that consumers would be happiest with?  That price would be zero.  Is it the price that would make the developer the most money?  That one is impossible to determine since you can’t release the same game more than once.  Is it the price that would minimize piracy?  The price that would sell the most units and generate the most buzz?”

Carlos Bordeu (ACE Team, Zeno Clash) brought a particularly interesting point to the table regarding regional pricing:

“I think the lower end of the price points you suggest can be a reasonable price for the big AAA retail games, but for specific regions. In Chile games can cost us $60-$70 and considering that the average population also earns less than the average person in the US or in Europe; that means that games are considerably more expensive here. I don’t think that the levels of piracy that we have in Latin America are because people are more dishonest, but because games are priced at unrealistic prices to the reality of the continent.”

To me, this highlights how for many people across the world games are a true luxury item (though I think “well off people” forget they are as well…); you’ve got to be earning a fair amount just to be able to buy them at all. It seems particularly nonsensical to me that games should ever be harder to get hold of just because you live outside of the richer countries, especially when internet platforms such as Steam more or less eliminate the transport/publishing costs incurred. Games should be available at a reasonable and equal proportion for all – this is certainly a debate in itself.

Finally, Cliff Harris (Positech, Democracy 1/2, Gratuitous Space Battles et. al) brings forth some interesting observations, and some equally illuminating potential possibilities:

I think that a lot of games are well-worth the £35 that you pay, and of course there are some that are worth less. Given how much I played Call Of Duty 4, I would have been mad not to buy it even if that game cost me £60m, although I’d probably be wary of doing so. The same is true of Anno 1404. There are some games that Ive bought and played hardly at all that i wish I’d kept my money, such as ArmA II and Empire:Total War. The key element in all this should be flexibility and knowing what you are buying. A free demo is essential for all games, and I think increasingly that selling games with a ‘light’ and a ‘deluxe’ version might be a good move. I’m sure a lot of people play only multi-player, or only single-player, or don’t need the bundled editor etc. I’d much rather the deluxe edition of a game had more content or options rather than just pointless fluffy trinkets. Who actually wants some night vision goggles with a game? or a plastic model of the game characters? That just shows that there is a deluxe market for some games, in which case lets actually code a deluxe version…

I found this reply particularly interesting myself. I suppose the “Deluxe” version argument is already developing itself through the form of DLC/micro-transactions; and I certainly support the idea of a little extra content for a little extra cash if the game’s good enough. It’s the reason why I happily bought the extra units for Empire: Total War. Interestingly, I couldn’t help but think of Men of War which I bought during the last sale (which helped inspire this article) for about £7. I’d happily give the developers more, but you just don’t know until you buy it. I would say it needs to be carefully implemented however; it’s no good releasing new content if it splits the “premium” customers from the “regular” ones. Empire: Total War is an interesting example here. Regular editions of the game can still fight against opponents with the premium content, meaning the community is kept intact for multi-player. It certainly adds more development headaches; you don’t want overall game balance to be ruined by the fact some players have deeper pockets than others.

It’s interesting to note in fact, that there are numerous models being tried out. How about the way Relic handled Dawn of War and Company of Heroes expansions which deftly kept the communities together? Then you’ve got the EA initiatives promoting micro-transactions such as Battleforge or Battlefield: Heroes. The list is actually really quite large, and to many publisher’s credit they’re genuinely thinking outside of the box more and more. I think an interesting upcoming example is Left 4 Dead 2: Being the eternal trendsetters they are, what Valve does to keep the Left 4 Dead 1 and 2 communities together could be influential.

One thing that really does need improving (and I’ve said this before) is we need more comprehensive demos. Burnout Paradise is perhaps one of the best, basically giving you the whole game for 45 minutes. I’m sure Empire: Total War would have benefited (in the eyes of those who didn’t like the full game) from a better demo. How about a twist on the idea of “renting” a game perhaps? First you get say 20 turns for free. Then £5/$10 for a version of the game where you can only play 1 faction but for a whole campaign and online perhaps? From there you can buy the whole game. This tiered approach would certainly cover what Cliff has to say about some games being worth the extra cash. You’d first get a total overview of what the game’s about and have the opportunity to extend the game massively if you want to/can afford it. Of course, the model changes with the game. How you demonstrate a single-player only FPS is radically different to a grand-strategy for example.

Moving on:

  • 2) Do you think digital titles should be priced less than retail prices?

This question proved subtly divisive, and there’s an interesting spectrum of responses here:

Carlos:

Yes, I do… but how much? I’m not sure. Not significantly cheaper in my opinion.

Cliff:

Where it’s the same game, then yes. It’s stupid that I bought Anno 1404 in a physical box, but it was the cheapest way to get it. The problem is publishers not wanting to anger retailers. Luckily for indies, we don’t even talk to publishers or retailers so we aren’t having to match a store price. Having said that, retail copies used to include a nice manual which you would effectively pay for with a retail premium (in theory), these days you are lucky to get a slither of paper with a serial number printed in an illegible font on it.

Vic:

No not really. You might have made an argument about this when thick manuals and cloth maps were regular shipping components but nowadays you are really buying the digital experience and expectations are in line with that. Costs alone never determine the price of an object anyway.  The price is always where supply meets demand.  If something costs more to make than you can sell it for then you have a problem but that’s about it

Ron:

I don’t think it matters much.  From what I’ve seen there are people who like to buy games in boxes and those who like to download them.  Those that prefer to download may be willing to pay extra to download the game now instead of driving to the store or waiting for a mail delivery.  Those who prefer boxes may be willing to pay extra to have a box on their shelf.  I think it makes sense to price them both the same.

On the surface, these are deceptively simple answers; either it’s not important, or at least it’s not hugely important. Ultimately, the extra cost of producing a physical copy with its accompanying manuals or bonus items would I imagine not be hugely incriminating (though some data on the matter would be interesting); far more important is aspects like shelf-space and advertising in the retail sector: That’s why you pay more in a shop than off an internet retailer. As Vic and Ron see it, it’s more pragmatism than principle. Some people see convenience in different ways than others, and it’s really about supply and demand, and thus they should be priced the same as a consequence. I think the one conclusive thing I would say is that I find it mad that you can buy a physical copy cheaper from an internet retailer than off a digital method; I prefer to buy off Steam, or Impulse simply from a convenience perspective, but I’ll go where I can get the best deal; or quite often when I know my money’s going to the people who deserve it directly – the developers.

This one I imagine is ultimately highly subjective, depending on what you hold in value. The game or the physical product? Slightly oddly, I myself prefer to buy CDs for music, but electronic methods with games. I can’t even describe why most of the time. Much like how some folks out there have a thing for “new manual smell” I guess!

From an indie perspective:

  • 3) As an indie developer, what are the main concerns when setting a pricing strategy?

Carlos:

In our case we priced Zeno Clash as cheap as possible because for us selling the game to as many people as possible was practically more important than maximizing profit. Being a new studio with a new IP you will want to spread your game around so people know who you are and can become interested in future projects. This is the reason Zeno Clash also has been through several discount periods. I’d say most of our profits have come from the periods when the game was sold at a discount (as big as 50%) and not when we sold at a full price. Obviously you have the advantage of having high notability and front page advertisement when you are on something like a Steam weekend deal (which is a big factor in the equation), so pricing is not the only thing, but still… games definitely sell more when they are cheaper.

I know I would have personally bought Zeno Clash at any price. But increasingly, I’ve found myself waiting for a number of games to come down in price, with Steam sales particularly being responsible for this – why spend £30 on release when a few months down the line it’ll be as much as 75% off on Steam? This perhaps ties in with what was said earlier about games being worth a certain price depending on how much fun you get out of playing them: The problem is of course, how do you know? To some, the dubiously priced Blood Bowl was a no brainer, even at £40. To me… well without a demo, £40 is a lot to pay. This I can imagine is especially the case with indie games. Being new IPs, by new developers, how do you know what you’re getting? New IP’s are often about tempting you in without much prior background – impulse buys if you will.

Vic follows nicely here:

I go by the “Age of Wonders” rule myself.  I walked into a Best Buy in the early part of this decade and saw the game “Age of Wonders” selling for $29.99 and didn’t bat an eyelash and put in the cart on impulse.  My business concept is that I am trying to make games that somebody like me would enjoy so the assumption is that my price sensitivities might apply as well.  This is completely unscientific and not approved of by Adam Smith. Seriously though, I’m using that price point because my hunch is that it’s going to maximize profit for me.  I think it is in impulse territory for most people and although most niche titles like mine often carry a higher price tag (I’m thinking of many war games) I think making the game an easy price decision for potential customers is a good strategy.  I’ve only got one title out there and I don’t like monkeying around with the price so I only have one data point but I’ve been pleased with the results.

This definitely has a lot of truth in it. There’s certain games you’ll plan to buy over a long period of time. Others you’ll randomly come across and buy on an impulse, which can be essential for many indie titles which may not enrapture people straight away without a little extra pricing push.

Cliff:

The price has to be right for the people who would consider actually buying the game. No matter what price you charge, the internet will be alive with angry forum poster decrying you as a Donald Trump style evil simpleton for pricing it higher that the price that they personally have decreed is optimum. The iPhone has proved beyond all doubt that there is no price that keeps people happy. People pirate $0.99 games, which is just insane. People complain that a game costs more than a sandwich, which is frankly silly. Unless your time is totally worthless, then no game is really only worth $1 or $5. I think $10 is an absolute minimum for a game, and that’s one where you assume you are only going to spend an  evening or two on it. I think most worthwhile indie games are easily worth $20, and some are worth a fair bit more. For every person who complains that a $20 indie game is overpriced, there are half a dozen buyers of that game who never go on forums to talk about it. Developers do experiment with prices, we don’t just pull random numbers out of the air. Casual games are another matter. 90% of them now are just re-skins of existing games, and frankly should be free patches or mods, yet they sell them as new games for $5.99. That’s a totally different situation.

Totally right there. You’ve always got to ignore the fact that there’s some people who just don’t like to pay. Everyone else has their own buying compass, much like Vic was saying with his Age of Wonders analogy. Myself, I like to use the “pints of beer” method; how many pints of beer could I buy instead of this game. But everyone has their own personal preferences.

Ron:

Honestly, now that we see how little overlap there is between different sales channels we’re a lot less concerned with “pricing strategy”.  The game can cost different amounts in different channels and it seems to have very little effect.  In my mind the most important consideration is determining the right price for each channel, one that makes the game fit well into the price/value line of the each channel.  With world of goo for example, it would have been hard to charge $20 on wiiware when Final Fantasy, an extremely popular and well established franchise was selling for $15.  On PC we could easily justify a $20 price point, same as most casual games and high-end indie games.

Reading Ron’s response, I think he’s entirely right to highlight the price/value ratio; and this is ultimately what the others bring this down to as well. Whenever you buy a game – or anything – you’re lining it up against your other costs, and when it comes to multiple platforms/systems, you’ve always got to consider what else you could buy for your hard earned money on the same platform.

I think after reading this rather extensive array of responses, it’s quite clear that the question is essentially one of value for money. Indeed, in an industry where knowing whether something represents value for money may not be fully recognized till you’ve finished it, this can from the consumer perspective be a frustrating experience when they don’t turn out how you expect. In many ways, I wonder if the answer is in opening games up a bit more before you part with the cash. Earlier in the article, I stressed the importance of good demos. I would say that if you can show someone how good a game is before they buy it, they could charge anything really.The answer really isn’t as conclusive as this article set about exploring, but perhaps it’s best this way. Sure some mainstream games will inevitably cost more than they’re worth, while other criminally underrated – or at least less widely known – games will unfortunately not get the credit they deserve. It’s really up to the publishers/developers to really know in their hearts what their games are worth, and how to show the world that. And it’s up to gamers to follow their compass with a little compassion.

So with a lot of interesting points raised, this goes out to everyone out there – how much do you think games are worth?

5 thoughts on “The Magic Number – The Cost of Gaming

  1. A few things; First that on a global/national economic level, it’s not as cleancut as saying ‘Chile is poor, it’s unreasonable to charge us this much for games’ – I live in the United Kingdom, but as one of two children of a lower-class family with one working parent near the minimum wage, I grew up with no holidays, no trips, a work-provided car, basic food – I wasn’t suffering, my parents were remarkably generous given their situation.. Nonetheless, what was a pittance to my peers was to me a luxury.

    As a young child, my mother combed the local exchange-n-mart for second hand boxless Sega Megadrive games for christmas – Around the age of ten, she was giving

  2. Very good post there Jakkar, I can definitely empathize with those sentiments; until I got a paper round all those years ago, a game was a genuine once every couple of months thing. Once I’d got that, I got a few more, though the system requirements for many kept the number low. It wasn’t until I got a job shelving Bread and Cakes in the local Morrisons that my entertainment budget was in my hands instead of those of my lower-middle class parents and buying them with any kind of regularity was feasible. So certainly. Value really does come to be with mind to the wallet.
    —-
    And yes. Men of War on Steam last weekend seems to have been the best value for money I’ve had in months 😀

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