Thursday, December 4, 2014

How You're Going To Price Your Computer Game.

For the purpose of this article, I am going to assume you want lots of money. (Image stolen from here.)
Yes, it's time for another post about setting a price for a game. It's lame that I'm writing more on this, but things are really in flux in the game biz and a lot of people (developers and consumers) seem to be confused about how things work now. Here's my up-to-date take on it. I'll try to make it funny so it's less boring.

This is mainly about indie games, but, honestly, AAA games are in the same boat. The time scales and initial price are both bigger, but the pattern is the same.

So suppose you're a small developer and you wrote a game and you want to make lots of money off it. In 2010, it'd be easy. Get onto Steam, price it at $10, and buy a house made out of yachts.

Sadly, getting a time machine is not a viable option because physics. You'll need to do marketing and come up with a price for your game. Since my hot new indie RPG Avernum 2: Crystal Souls comes out soon, I’ve been thinking about this a lot. The pricing part, as thinking about marketing makes me break out in fear hives.

How Much Should My Game Cost?

Do it like the pros. Flip a coin. If it's heads, $15. If tails, $20. Done!

Ha ha. I'm just kidding. (I'm not kidding.) Right now the sweet sustainable-business price for indie games looks like $15-20. This range is cheap enough to feel affordable and high enough that you can make a living. As for which one you pick, look at your competitors, and do what they already did.

Granted, some rough riders want to send out their game at $10. This is still feasible, but with one warning: Look at your game and ask, "Can I honestly ask $15 for this?" If the answer is no, you need to look at your work REALLY hard. Figure out if you've made a quality product that brings something distinctive to the marketplace that a competitor can't easily clone. Be ready for a long, sleepless night.

(Obviously, I’m mostly focusing on personal computer games here. Pricing for mobile is an entirely different topic that has been extensively written about elsewhere.)

One more caveat, which is entirely my own opinion. If your game costs more than $10 per hour of gameplay, please reconsider your price. Not for your sake, but for those who write indie games after you. Charging $20 for your elegant 90 minute art piece might trick people into buying their first indie game, but it hurts the chances of their ever buying a second one.

Hokay. You have a number. Now ship your game! Isn't this exciting?

In Stage 1, this is how you see your game.
Stage One. "Will everyone please help me stay in business?"

The first couple months that your game is out, it'll always be at or near full price. A 20% off sale the first week can do really well to goose sales and bring in the undecided, but, otherwise, stick to your guns. Demand money.

The first month or so your game is out is key. It's the time when your game is most visible and people who are really jazzed about it will pay full price. This is why developers go so insane with worry about proper release press, Steam placement, and everything going perfectly.

Here is a very important rule of thumb:
The people who love your work enough to buy it right away at full price will provide you with most of the money that keeps you in business. So you need them.
I can't stress this enough. I've had disagreements with my fans, but I am infinitely grateful to them for rushing in and paying full price. It keeps us making games. Period.

Hard question time again. Are there people out there who'll care enough about your product to buy it right away for full price? If you aren't sure, you may have a rough road ahead of you. Bundles are nice, but you won't make your living off of them.

Anyway, if things go accordingly to plan, you'll get a ton of sales the first week/month and be thrilled and optimistic and float on rainbows. Then, a month or so in, your sales will fall off a cliff. Don't worry. It's nature's way. Just don't let it surprise you or send you into a depression spiral. It's just life.

(It will surprise you and send you into a depression spiral. No mental preparation is adequate to protect you when you see that sales chart line slam downward.)

Give it a few more months for the diehards to trickle in and pay the full ticket. You'll need that money. Then, eventually, sales will be slow, you'll be three months into the long tail, and it'll almost be time for your first Steam sale.

It's time for Stage two.

In Stage 2, this is how you see your game.

Stage Two: "Will you take 25% off? How about 50%? We're pricing to move!"

Once a few months have passed and sales have trickled off, there is no longer anything to gain from always keeping your prices high. It's time to take advantage of Steam and other sales.

(Oh, you are on Steam right? At this point, if you aren't there, you have real problems. Get on it. The standards are way looser than they used to be. Put your game in Greenlight and get your Great Aunt Millie to vote for you.)

You're going to want to have sales. The key for the sales period is to take it slow. For the first sale, 25%. When the next sale comes along in a few months, 50%. And so on. (On Steam, you can also beg a super high discount to get a Flash Sale. Be aggressive for this. Being promoted by Steam makes the big bucks.)

Putting your special little game on sale can be an emotionally wrenching experience. Everyone wants to protect their baby. However, by this time in the process, I'm usually entirely sick of seeing my baby and don't mind tormenting it a little. Try to cultivate an emotional environment of cold brutality.

This process will go on forever, and you have a lot of freedom. You can be 50% off one sale and then 75% the next. Nobody will notice. You have room for some trial and error to find out what makes the most money.

But at a certain point, your work will be old and musty enough that even sales won't make a ton. It's just too buried in the game stores, and too many of its target audience will own it.

Then it's time for the deep discounts. The bundles. The hard sell. Or, to put it another way ...

In Stage 3, this is how you see your game.

Stage Three: "LET'S STRIP MINE THIS BAD BOY!!!!!"

A quality game can continue to generate income for a surprisingly long time. And why shouldn't it? If it's fun, it never stops being fun. However, at a certain point, your game will make the transition from "My darling baby that must be loved and cherished." to "An aging asset that must have its value ruthlessly extracted."

That's where the bundles (Humble Bundle, Indie Royale, Groupees, etc) come in.

Putting a game in a bundle in its first year is a mistake. You'll irritate people who paid a high price, and you’ll lose opportunities to sell the thing at a higher cost.

Once it's been out a year, things are different. Then your game is old news, and you're probably more focused on pushing your next title. In this case, bundling is terrific. It brings in more packets of money. It serves as a demo, bringing you a lot of attention which helps you sell your next game. And, surprisingly, past experience has shown that being in a bundle doesn't do a lot of damage to ordinary sales.

Actually, this isn't that much of a surprise. For even the best known indie, the population of gamers who have never heard of you will always be huge. Anything that gives you a bump in visibility will expand the fan base you need to continue as a business. Being in a bundle is perfect for this.

Sadly, bundles don't make as much as they used to. Humble Bundle still does well, but the million other bundles rarely generate much cash. It's another way in which the glory days are gone. Bundling does still increase your visibility, though. So it's still a good idea. Think of it as getting to charge for your demo.

Most people don't play games they get in bundles anyway. They're too busy trying the titles they got ten bundles before.

And Then It Goes On Forever

Since the Indie Bubble popped, getting a small game company to profitability has become far more difficult. In this super-competitive environment, it's tough to build a loyal fan base willing to pay full price. You need a really good title that earns a lot of visibility.

However, once you are making a living, it appears to be easier to stay in business. Thanks to sales, bundles, and the ever-ubiquitous Steam, a good game can continue earning for a lot longer than you might think. And that's even before you start porting it to new platforms, releasing Deluxe Editions, DLC, rewriting it as a Remastered edition, etc.

The Game Industry is changing really fast. I hope all this keeps you up. I'll probably write a new version of this article in six months, when Steam invents a way to beam games directly into your brain.

102 comments:

  1. Lovely read as ever Mr V.
    And whilst your mentioning bundles and Steam -
    "Oh, you are on Steam right? At this point, if you aren't there, you have real problems. Get on it"
    - bundles are a great way to drum up extra support for getting on Steam, but only expect 10% of your bundle buyers to vote for your game on Greenlight. It's a marathon not a sprint, tortoise not hare, insert additional euphemism here ...

    ReplyDelete
    Replies
    1. Si hay algo esperanzador que puedo llegar a, es esto: ¿La gente que hace los juegos que amas? Ellos también son humanos. Envejecerán. Ellos vacilan. Se tolerante. Me ha obligado a pensar realmente cómo mi negocio, el trabajo de mi vida, terminará. Una serie de contracciones y proyectos abandonados, cada paso acompañado de una nube de disculpas y restituciones. Desafortunado e inevitable, pero se puede manejar éticamente y con gracia. Su tema es sobre el que quiero escribir más, pero ninguna discusión sobre la edad y los juegos de escritura estaría completa sin al menos mencionarlo. Quisiera hablar de la falta de diversidad en La industria de los juegos? Estoy contigo. Sin embargo, si no mencionas la falta total de ancianos, así es como sé que no eres serio. Si te esfuerzas por conseguir más mujeres juegos friv 1, no blancos, etc. en la industria, solo para descubrir que todos caen de nuevo Cuando empiecen a cumplir los 40 años, prometo que su victoria se convertirá en cenizas en su boca

      Delete
  2. You should take into account income inequalities if you work globally. Here in Ukraine most people live on $200 a month. Even 10 bucks for a game in insane for us.

    ReplyDelete
    Replies
    1. Steam supports regional prices. I'm sure Steam will advice different prices for different regions, by looking at what price did you set for US.

      Delete
  3. Price has nothing to do with what you think about it. It is not you that places the price tag, it is the market economy, simply put: supply and demand. If the supply surpasses demand, the prices drop, the opposite is also true. Today everyone can make games, Flappy Bird I hear? So the supply increases exponentially while the customer base grows linearly. Game development is the new Crochet. You can ask money for it, but people will always frown at you.

    ReplyDelete
    Replies
    1. It is true that price is beyond the control of the seller. However, it is an error to consider games as interchangeable (i.e., the supply of games). What's relevant is the demand for a particular game versus the supply of games that are comparable.

      For instance, when I was a teenager, Street Fighter II was the most sought-after game in the arcades. It was an absolute phenomenon. Shortly after its release, it was also the most cloned game, but it took a long time for any of its competitors to rival Street Fighter II in terms of quality and desirability (eventually, SNK was able to chip away at some of Capcom's market share, but it took them nearly a decade to do that).

      My point being, if you're lucky/skillful enough to make the Next Big Thing, it doesn't much matter how many other games are out there, because those games are not supplying what your customers want.

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    2. This comment has been removed by the author.

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  4. I will consider this advice, in case it is still true when I finally finish making a game. :P

    ReplyDelete
  5. I think responsible pricing is quite an overlooked subject within the indie 'hipster' movement and it was quite interesting to see your (albeit brief) mention of it.

    ReplyDelete
  6. awesome blog post as always Jeff..

    ReplyDelete
  7. This comment has been removed by the author.

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  8. Really like your perspective as an indie developper. Love reading your blog! :)

    ReplyDelete
  9. Once again a great post, always a pleasure to read, great insights, and I like the way it's written.

    I really agree with this vision on the topic. Your die-hard fans (with enough spare time) will be glad to buy full price, as long as you don't stab them with a -75% sale the next month and a bundle just after. Taking it slow is a good way to do.

    An example of "don't do this" would be the guys behind the Pixeljunk games. I was eagerly waiting for all of their games to pop on PC. I didn't even have time to buy Pixeljunk Shooter full price, I got it half priced in the first month. And then it got stabbed to less (more?) than -75% and almost instantly bundled to death the next month. Yay, that's teaching me not to bother doing that anymore. I barely had the time to play 3 levels that it's already available for a few cents.

    And worse, they did that with their upcoming game too! Nom Nom Galaxy is in early access for less than a year, and I am rather excited about it. I was surprised to see it at IndieGameStand (great site to discover pearls, btw) at -66%, and got it right away, thinking it was a rare occasion.

    Well hello Indigala Monday bundle of this week: https://www.indiegala.com/monday, where Nom Nom Galaxy is featured with other nice games, for 2.49$.

    This kind of approach, coupled with a large backlog, pushes people like me to not bother buying full price anymore: If the game is going to be slashed aggressively in price before I get a chance to play it really, why bother?


    On the opposite, when I see spiderweb soft games in bundles or promotion, I see it as a gift, a rare occurring, and I dive on it. Admittedly, I still haven't had time to play them, but still. The furthest I got was 3 hours in Avalon before getting distracted. Not a case of the bad game, more a case of the "great game, need to invest time in it, never getting around to invest that sort of time". But that's my problem. Well it's a bit yours too, since I can't really see myself rushing to buy full price your latest game, since I still have to go through the previous episode(s). But there is not much you can do about it, obviously.

    ReplyDelete
  10. Daayum! long post, seems very good though.
    Stashed for a later read soon :)

    ReplyDelete
  11. yes thank you I think responsible pricing is quite an overlooked subject within the indie 'hipster' movement and it was quite interesting to see your (albeit brief) mention of it.

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