Thursday, June 18, 2009

Indie games: Still Too Cheap. Getting Cheaper.

I wrote a couple of articles not long ago about how the expected price for Indie games is becoming really cheap. Too cheap to support a thriving, innovative Indie scene. I thought that pricing all games below 10 bucks on Amazon and XNA Community games, sets a dangerous standard and steals the freedom to influence prices that developers need. I got a reasonable amount of abuse for this, because, of course, people hate being told that the things they want are unsustainable.

Which brings us to the new development at Big Fish Games, one of the larger casual games portals ...






Their current pricing scheme, as I understand it, is that you can get any of their games for $6.99. This subscribes you to their service, which charges you that amount per month and gives you another game in return. Of course, you can pay the $6.99, get the game, and immediately unsubscribe from the service, which is what I suspect a number of people do.

So I decided to poke around for a bit and find out how standard this sort of pricing is. At Yahoo games ...










... and MSN games ...











... and GameHouse ...











and so on. $6.95 is currently the magic price. Generally, to get that price, you need to buy a subscription. In other words, use the developer's game as a loss leader to win their private route into your credit card.

So let's run some numbers. A typical deal on these portals is that the portal keeps, say, 10% of a sale for expenses and then pays a 40% royalty. (This is pretty close to what I generally get.) Which means each sale of a game on Big Fish would earn you roughly $2.50. You better hope you're earning more per copy elsewhere because otherwise, if you want a pretty meager payout for your work (say, $100K before expenses), you have to sell forty thousand games. You know how hard it is to move that many copies? PRETTY DARN HARD.

Now, this is the point where generally some Internet knucklehead says, "Well, they have the right to do whatever they want." Yeah, of course. And I have the right to point out the gruesome consequences of their exercising that right.

To have a chance of not getting murdered at those prices, you need to sell a monster pile of copies. This is exactly the situation that punishes serving niche markets, taking risks, and doing new things. And those are exactly the roles people are supposedly looking to Indie developers to fill.

I have been arguing that these low prices will result in a desolate and uncreative Indie games space. Look at the offerings at the casual portals, and I think you'll see that I have a point. PopCap provides some cool, innovative games (they're basically the Pixar/Blizzard of casual games), but otherwise the casual portals are a dry expanse of Bejewled/Zuma variants, simple puzzle games, and milking of established properties. Much like in Hollywood, the need to get a blockbuster to survive delivers a harsh blow to creativity.

Of course, it's easy to say, "But they're casual game fans. They don't want anything challenging. Scrabble and hidden object games are the limit for such simple creatures." I personally think that this is nonsense. But the way we're going, we'll never find out.

So What To Do About It?

First, support and encourage portals that don't force developers to sell their work for a pittance. Like Steam, Greenhouse, and MacGameStore.

Second, if you are writing a game of your own, don't let anyone steamroll you into giving your work away. If a portal is going to sell your work for $6.95, make sure you've written a game that can compete in that market. If not, at the very least, don't give them your newest freshest stuff. I'll let them sell an older game for that price for the advertising and exposure, but only after I've already made good money off of it.

What I care about is having a marketplace where a wide variety of Indies can write a wide variety of games and make a living. The casual portals have their place, but, if you aren't prepared for how little they're going to pay you, they're a trap.

Edit: I should have also mentioned Reflexive games, who are also being admirable in pricing Indies at a level where they can actually make money.

85 comments:

  1. Jeff, if an independent developer is dependent on portal distribution for income then... they are no longer independent. And while portals flog derivatives to the masses, the niche markets served by truly independent developers will continue to pay the price of development of original and unique titles serving their needs, simply because those needs are not met elsewhere!

    Of course, you know that already :)

    ReplyDelete
  2. Maybe it is just a matter of two different markets?

    Selling 40k copies of Geneforge is hard, but web-based games generally get much higher traffic than downloadables - so selling 40k copies of a $7 casual web-based game might be quite a bit easier.

    ReplyDelete
  3. The problem with the above is that there's so much to choose from at those sites, and a lot of it is the same. So unless one is head and shoulders above the rest, even all that foot traffic won't save you.

    ReplyDelete
  4. If these are the prices the market is driving non-innovative games too, then I don't see how anyone has anything to gain (from a market perspective) by trying to raise their prices. Perhaps in the future innovative games simply won't be produced by people writing games as their primary source of income?

    ReplyDelete
  5. Well, I tried going to the official website to buy crayon physics after trying out the demo, and they were asking for $19.99, so I decided to keep playing the demo a bit and then uninstalled it and moved on.

    I had never bought an indie game, nor did I know how much the game was, but I was expecting maybe $5 - $9.

    ReplyDelete
  6. I think much of the problem is that programming in general is becoming cheaper.

    ReplyDelete
  7. How do you know that the price affects how much a scene 'thrives?' Won't the indie devs just get eaten up by the bigger companies if they turn too much of a profit margin?

    ReplyDelete
  8. All Portals are crap (yes, Popcap too). Every game is just a clone of every other game, and they're all crap. I will NEVER drop a friggin' dime on any portal game.

    ReplyDelete
  9. Don't know how the company is doing, but Gish is an awesome game that can be brought from anywhere between $19.99 - $9.99 on the internet.

    That said, because it is such a cool game, I opted to pay the higher price, even though I knew of the cheaper one.

    ReplyDelete
  10. Sigh. I really hope BFG knows what they are doing. It sets a dangerous prescedent. I know that they used to have a "game club" where you could buy games for &6.99, but you were required to purchase a minimum of 12 games or so. That worked, because it forced them to buy lots of more games. I know for my games, very few of my Big Fish sales came from direct purchases. 90% of them were via the game club.

    Now that they are removing the purchase minimum, it will change everything. The customers are not getting a discount anymore, the actual PRODUCT is costing less. So the developers are going to produce cheaper games, and the customers will be pissed because the games they are buying are no longer as good, even though they are paying the same price.

    This descision mystifies me. I don't see how it can work for Big Fish, nor the customers, nor the developers, nor all the other portals who are following suit.

    -Dave

    ReplyDelete
  11. Jeff, did you know that Reflexive Arcade is selling Avernum 5 for $24.95?

    Granted it's not that much different than your price of $28.00, but fans don't get the option to purchase the hint book or get the game on cd with them.

    http://www.reflexive.com/Avernum5.html?CID=0

    ReplyDelete
  12. I think it is pretty normal that they sell their games so cheap. If you know something about marketing, you know you can compete on 2 different things:
    - product differentiation
    - price competition

    Since all games on all those different portals are the same, they can only compete on the price. Real indie games try to compete on product differentiation, and therefore can charge more.
    The good news of this theory is that their low prices won't affect our (indie) game prices :).

    ReplyDelete
  13. @Toby-Linn: "Jeff, did you know that Reflexive Arcade is selling Avernum 5 for $24.95?"

    Yep. Reflexive is being very good on this. I should have mentioned them. I'll add a note.

    ReplyDelete
  14. Jeff: In general I agree, you deserve to make a living! But what about the argument that lower prices means more sales? If people are twice as likely to buy a $10 game than a $20 game, aren't you better to price your game at $10 to increase you sales volume?

    ReplyDelete
  15. @Chris Pearce: "If people are twice as likely to buy a $10 game than a $20 game, aren't you better to price your game at $10 to increase you sales volume?"

    If that was true, it could be better. But doubling your sales is very, very difficult. 100% is a HUGE increase.

    - Jeff Vogel

    ReplyDelete
  16. @Chris Pearce

    The problem with that logic (eg. "lower prices means more sales"), it actually translates to a perception of "lower quality" in the eyes of the customer.

    As Jeff is rightly pointing out, it also sets a dangerous precedent.

    I'm curious to see what the net effect of this trend will be...will companies jump ship en masse to something like iPhone distribution (which is becoming another bubble)..

    Eventually there won't be any small / Indie developer left who will spend that giant chunk of change to compete in the portal arena for the super low ROI.

    ReplyDelete
  17. Ultimately, it's about cost of entry for me. I absolutely encourage developers to charge what their market will bear - better they stay in business whether or not I personally buy their game. But all the same, I'm not willing to risk very much money on an unknown quantity - which is what nearly all indie games are, to me. An occasional indie title captures the eye of the gaming press, but by and large you don't get the kind of information saturation you do with big budget titles. There's a much wider variance of quality compared to the aforementioned big budget titles. And I've long since given up on demos as being reliable forecasts of whether I will enjoy a game long term or not. So all of that suggests to me a price point of around $5 to $10 as the point where I'm no longer risking enough money to worry about having made a bad choice.

    With a couple of exceptions, of course. One being Spiderweb games. Why? Because I've been playing them since Exile I and I know damn well what I'm getting and exactly how worthwhile it is. (heck, I just blew $120 on 'em a couple weeks back.) But you have to earn that kind of trust and that's tough.

    (Keep in mind that I don't pay $50 or $60 for big budget commercial titles either.)

    ReplyDelete
  18. @malkav11: "I'm not willing to risk very much money on an unknown quantity - which is what nearly all indie games are, to me."

    Absolutely right. Nor should you. Which is why all Indies should provide good, beefy demos that help you be sure you aren't getting ripped off. Which, I'm afraid, most demos don't do these days.

    Thanks ... You gave me a good idea for another blog post.

    - Jeff Vogel

    ReplyDelete
  19. I just wanted to mention that it was a smart move on your part--I think--to put Avernum 4 on Bigfishgames.

    On occasion, I really enjoy silly, throwaway games that I can play for a couple of nights and then give up, which is just fine when I'm spending only $6.95 for a game. I like the cheap distraction, so BigFish games works for me in that regard.

    I ended up getting Avernum 4 from Bigfish quite some time ago and loved it so much that I sought out your website and bought a whole bunch of your games for the full price. The games are so good that it's worth it to me, but I'm not a big gammer, and I know that I would have never discovered Spiderweb if I hadn't first seen the game first on BigFish and been able to play the whole thing on the cheap.

    Just thought you'd like to know that your marketing strategy worked at least in my case!

    ReplyDelete
  20. @Christine: If only more people were like you! The casual portals garner a lot of loyalty, most of the time. A game could be out for months and receive lots of glowing reviews but there will still be lots of people who won't buy it because it doesn't appear on their portal of choice.

    This might have been due to the game club offers, where customers had to buy a certain number of games from a specific site in order to keep their discount. Now that those purchase minimums are going away, perhaps that will change.

    ReplyDelete
  21. Following @Christine's comment, the people who run these major casual portals, very much like AAA publishers, strive to remove any individuality from the people who made the games for them in order to boost their own brand. I feel for the consumer who buys those types of games, the message they're receiving is that these games are like shampoos you can pick from the supermarket, all made by the same brand but with different properties.

    For example, take world of goo:
    http://www.bigfishgames.com/download-games/5692/world-of-goo/index.html

    They're trying to keep as much as possible that the game was made by 2D Boy. The trailer even says "BIG FISH GAMES" and then cuts immediately to World of Goo.

    If you don't know that someone worked really hard on something, how would you appreciate it? I'm not sure if they'd care enough to go out of the way to find out who made these games.

    I'm glad that Christine does care! Consumers need to be educated like that. But perhaps the first step is for these portals to collaborate in the process, and I doubt they ever will.

    ReplyDelete
  22. I am a member of BFG and because of the low price, I can buy many more games than I would be able to if they cost me $19.99. At that price, I would never have the games to play.

    ReplyDelete
  23. You make some excellent points, I often feel compelled to pirate indie games before purchasing them, demos always just feel restrictive.

    I've legitimately purchased cheaper games, I grabbed a copy of World of Goo on sale, Multiwinia and Darwinia for $15. But more than that I just don't have the money for really. I buy games on impulse, not on investment, so I actually quite like the $7 games trend as it puts them more into my reality. I will not spend $30 on a game, I will definately not spend $60 on a big retail game. Basically $15-20 is my limit. If that limits what games I legitimately own, sobeit, I'll just pirate what I need outside of that and that's just my sorry reality.

    ReplyDelete
  24. The sad thing is that these lower prices are here to stay. A number of big name indies (like Amaranthia) are starting to chop their games up into smaller, cheaper, episodic installments. I'm tempted to do the same.

    ReplyDelete
  25. That's a good point about demos Jeff, thats how I originally got hooked by Exile 1 of all things, lol. And I mean the ORIGINAL one, before the graphics were updated to Exile 2+ level. XD

    But yeah, the problem with some of those little indie games is that there could be someone out there willing to make a game like it for free, or close to free. And if you can find one person in the world willing to do something for less than what they need to be self-sustaining, the whole system is threatened. =/

    ReplyDelete
  26. @Wadjet Eye

    If Telltale is anything to go by then episodic adventure games in particular work very well. It's certanly something you should consider - but I certainly question the feasability of it for a more freeform RPG.

    ReplyDelete
  27. I know many people that are BIG affiliates of some major portals. They ALL experienced a big revenue drop since they introduced the lower prices.
    Lower prices = less money for portals and developers. Portals do that only to compete against each other to gain market share, and nothing else.

    ReplyDelete
  28. I think its all about branding. There are people are willing to pay for premium content, so you should make sure its of the highest caliber. Everyone knows that any new Blizzard/Valve game is going to be great because we have a high confidence in the company.

    Some people are willing to buy no named products, be it shoes, rc cola, they shop at walmart, go to the dollar store and download movies/software off the internet. These type of people should not be the people we are targeting, we are looking to try and get the guy who pays 300 USD for a pair of Nikes

    ReplyDelete
  29. I'm a big user of MacGameStore, I buy usually at least a game a month there, and the price is generally about US$20 per title.

    Being able to download a demo really helps one decide whether to buy the full game. There are a few rare occasions where I know I'm going to want a game (eg if it's Part 2 in a series where I already loved Part 1) but generally, the demos are critical for my purchasing decision.

    ReplyDelete
  30. I am generally in favor of smaller, cheaper, episodic games. Like I say, the cheaper something is, the more likely I am to buy it at all, and certainly the more likely I am to impulse purchase it if it passes that magic threshold. And the shorter something is, the more likely I am to actually play through the whole thing. I've beaten all of the Sam and Max games from Telltale because each one is a comfortable evening's gaming or so, barring horrible stuckness. That means that I'm a lot less likely to be distracted by something new and shiny midgame and then have to face readjusting to the game on the increasingly unlikely happenstance that I come back to it. (I have a -massive- backlog.) It also means a more frequent release schedule (or -should-...I'm looking at you, Valve.) which in turn means you're in the thoughts of your customers more often, more use out of an engine, and so on.

    All of which posits things like the game model/genre feasibly supporting episodic content, a good price/content ratio (I'm not one of those guys who needs every game to be a 200-hour epic - far from it - but I don't want to pay $50 for 6 hours or $20 for 2, say.), and so on and so forth.

    ReplyDelete
  31. One thing I wonder about: how does piracy affect the equation? I know that for a lot of software I buy, I'm essentially covering 9 freeloaders. You may not like the portals, but I much prefer to buy an app from iTunes knowing that there are relatively few freeloaders.

    Last thing I've got to say is that many of the big venues really need to clean up or get rid of the comments. The iTunes store, in particular, is riddled with inane or irrelevant comments.

    ReplyDelete
  32. You can try and go against the grain and make something original like we did with Bumps but then places like BFGs soft release it and hide it away in the vaults which makes finding it kinda like a needle in a haystack.

    Not had any sales figures from BFGs but i'm expecting them to be very low because of this soft release with no front page exposure and btw best i could do was 35% which makes approx $2 per sale.

    Darren,

    www.utopiangames.co.uk

    ReplyDelete
  33. I have got to say, I absolutely agree that the lower prices are definitely setting Indie developers up for a bum deal. I also agree that gamers of all types, should expect higher quality than what is currently being put out there. It's not just the casual game market that is rehashing the same old ideas, even the mass cd retail market is doing nothing but movie and tv spin offs, sequels to games that did sell well, and offering very little that is truly innovative or fun anymore.

    The casual games market does see some truly unique games coming out today though, world of goo and wandering willows are two prime examples of truly great games that aren't following the run in the ground patterns of today's casual gaming market. I'm so sick of hidden object, match 3, and zuma games its unreal. I do like the dash ones, but they are getting over-worked now too, and games like virtual villagers are very very basic city-building games...give me Caesar or Pharaoh any day over those!

    I have followed the entire Geneforge series, and adored every minute of it. In my way of thinking, having been a gamer since the days of Atari, and playing every rpg or strategy game I could get my hands on, this type of in depth game series is what we need more of in the markets. The story line was so in depth, the games were huge, the retro graphics I adored for reminding me of when RPGs were truly RPGs and not super eye-candy with graphics that require a $2k computer to run, with a sad and limited storyline you can complete in a couple days....

    Indie developers also need to be aware of how often games are pirated from those marketing sites, like RealArcade. They made it so easy to pirate their games children can do it, which does nothing to help the indie developers who really need the cash flow of sales to keep developing games.

    Jeff, you've done an amazing job with the game series you have made so far, and I'm just now beginning the Avernum series, having completed Geneforge. (I'm behind the times I know lol) Keep up the good work, when you get fans like me, we don't mind paying the price for a game we absolutely know is going to rock. :)

    ReplyDelete
  34. The question I would ask is this: if it is so obvious that price capping is not in the portals' best interest, then why are they doing it? I don't subscribe to the theory that the people in charge are mindless pencil-pushing beauracrats that just don't understand the consequences of their actions. While I don't know any of them personally, I tend to think that at least some of them are intelligent people who spend a lot of time and effort studying their industry and trying to determine the course of action that will most benefit their bottom line. So, while I tend to agree with your analysis, I am forced to ask, what do they know that we don't?

    ReplyDelete
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  37. This is slightly disappointing, as an aspiring indie game developer myself, I don't want to enter a market where people expect all of our games to be at that price. However, I do think it's a fair price for a lot of the games I see floating around BigFish, not so fair to the developers who got their games up on BigFish prior to this, when they deserve more. This isn't a problem now, but it'll become a problem when expectations shift, when people won't buy the next Spiderweb game because it's not 6 dollars, despite having more content in it than many 60 dollar games. It's a shame how much business gets in the way of real gaming, isn't it.

    ReplyDelete
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