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What should games cost?

April 27th, 2009 | Posted by Joe Tortuga in Link-out

Recently, Amazon.com purchased one of the larger game portals, Reflexive Arcade.  As part of the integration, Amazon chose to lower the prices on all the casual arcade games to $9.99.  This angered publishers , causing PopCap and others to pull their games from the portal.

Jeff Tunnel (founder of Garage Games, and currently at Push Button Labs) says this about Amazon’s price change :

Now the flood gates have been opened, and I am telling you to look out below. Today Reflexive, recently acquired by Amazon, opened their new download store, with lowered front tier pricing of $9.99 and second tier pricing of $6.99 for Indie casual games. All of the other casual portals like Big Fish Games and Yahoo games have pricing of of $6.95 by joining their “clubs”. It is my belief that even these prices will not hold up over time.

As an example of the future, look at the game section of the iPhone App Store. In this market, the right price for a game is $0, and I believe that is where all game prices are heading. For a while, there will be successes at $3.99 to $1, but eventually, I think you will see capitulation to the $0 price point.

Jeff Vogel, of Spiderweb Software, a maker of classic turn-based RPGs, takes this up in series of a couple of posts.  They charge $28 for the majority of their downloadable games. In his two articles he goes into depth about why he charges what he does, and how he figures his pricing decision.

First he says :

I have a friendly little message for my fellow Indie game designers.

You really need to start charging more for your games.

Every year, life is getting more and more expensive. Insurance. Rent. Food. And, at the same time, your games are getting cheaper and cheaper, sometimes as cheap as a dollar, as you engage in a full speed race to the bottom.

In a follow-up post he offers this as part of his pricing prescription:

Distributors – Don’t set arbitrary price ceilings (like at Amazon or XBox Live Community Games). If you are setting the price yourselves, use the developers price as a guide. Then let the magic of the marketplace do its work, punishing the foolish and rewarding the smart.

In any money-making business, pricing is one of the hardest things, especially since it cannot be decided by value alone. A controversy erupted over Braid‘s price, because users have developed certain expectations for the cost of XBox Live Arcade games, regardless of whether they are worth their price or might cost more in a different venue. Outraged publishers see a $10 price cap as far too low on the PC, while a five dollar price seems too much on the iPhone.

Even AAA games have fixed price points.  What does that do for them? Anna Anthropy  notes at her blog :

the eighty-hour game is a dead end. publishers attempt to justify the prices of their titles with lots of content, and content requires lots of people, and staff size inflates while individual creative control and accountability, conversely, diminishes. and none of this addresses the problem that an eighty-hour game is just an hour’s worth of ideas – if even that (remember, content and ideas are different things) – stretched across a much longer period. an eighty-hour game has seventy-nine hours’ worth of filler. long games waste our time.

What do you think the answer is?

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3 Responses

  • enandrews says:

    It’s all hinged on the buying habits of customers with very different ideas as to whats worth their time and money, I’m not sure if there is an answer, it’s all so random.

  • My opinion about indie game pricing pretty much follows Vogel: the people who are going to steal the games are going to steal them, but the people who are willing to pay for them are probably willing to pay more than a freakin’ dollar. The transfer rate from demo downloaders to the people who actually pay for digitally distributed games is already so low that it just doesn’t make sense to sell your time and effort for so little.

    As for AAA games–and I know this idea isn’t going to get much traction, but I’ve yet to hear a coherent argument against it–I advocate a fairly aggressive DLC format. Sell the disc for half what it goes for now, 30 bucks, and then offer the other half of the content as DLC for another $30 to those who actually want to play it. This would both make more games accessible to casual gamers who don’t want to spend as much and who usually don’t actually finish a AAA game AND undercut GameStop and their re-sale revenue. Payment for DLC goes straight to the developer (with a tidy sum for Sony/MS/Nintendo, but they get a cut of the disc sales anyway).

    I think the biggest weakness in my idea is the size and cost of hard drives. Maybe only possible in the next generation, though I’d personally be surprised if that many people jumped on the bandwagon (I think people criticized Beautiful Katamari for doing this–though that was a pretty bad botching of the experiment). Just my two noncents.

    • Oh, also the load times for large DLC are fairly horrendous. Loading up Oblivion after I downloaded Shivering Isles made me want to strangle myself with my nonexistent controller cord. They seem to have worked the problem out with the Fallout DLC, but those chunks aren’t nearly as big.