Customers set their own price?

[teoma]

I've been trying to come up with a better revenue model, and I recently found some sales figures on Radiohead's last album (I seem to have lost the links, so bear with me because I'm doing this from memory). In case you haven't heard of this, the entire album was available for download, and you can set your own price.

The numbers were something like 40% of every download paid an average of $6 USD. That comes out to around $2.40 per download if you average it out.

Now, I'm not Radiohead, but those numbers sound pretty good to me. By comparison, A game selling for $20 at a 4% conversion rate will get you only $0.8 per download.

I know in my case, the biggest obstacle that keeps me from buying a downloadable game isn't the price, but the act of paying. So my strategy is, lure customers to your payment page by telling them they can download the full version and pay whatever they want. Then, on the payment page have a few screenshots and text highlighting features for the full version, along with a field that lets them fill in their own price and buy. Maybe even have a 'suggested' price in the field that they can erase and fill in with their own number if they feel like it.

Problem is, since it's a rather unique concept, most payment processing places don't offer options like this. I tried writing plimus asking about it but they never replied.

So, any thoughts, comments? Has anyone ever tried this?

[Ryan Clark]

Plimus has a feature called "Allow Override Price" that would seem to do what you want. It lets you pass the price as a parameter in the URL, or via HTTP POST.

Would love to hear if this works for you.

[Aleksi]

Correct me if i am wrong, but i read somewhere that Radiohead changed strategy and imposed a minimum price after a while. The album is now unavailable as a download.
Proof here (http://www.inrainbows.com/)
I believe they did that as a promotion buzz. Got a pretty good deal over it, considering most fans WILL buy the album once in stores. And since you heard about it everywhere, people that didn't know about the band had an opportunity to discover it. Once the overflow of news around the web was created, download was disabled and now you have to go buy it in stores.

Good strategy, probably will be over used when my bands album comes out! :D

Cheers,

[Desktop Gaming]

I didn't download "In Rainbows". I could have had it for free but I didn't want it. I probably wouldn't have even gone to the trouble if they'd offered to pay me.

Anyway. You'll generally find that if people are offered something for free, from somebody they don't know (i.e. you), then they won't give you a cent.

The only reason Radiohead did it, was because they have a loyal fan base. And even then, the success was limited. If nobody knows you, you've no chance, frankly.

[Sybixsus]

You would have to implement some kind of base price or otherwise you would end up losing money on payments lower than the minimum charge your transaction provider takes. This would stop people getting it for free, which would probably have some positive effects (cutting out the bottom end of the payment scale) and some negative ones (not being able to mention free in your marketing.) Beyond that, I wouldn't like to guess how it might go.

[OremLK]

Anyway. You'll generally find that if people are offered something for free, from somebody they don't know (i.e. you), then they won't give you a cent.


I could see people paying a decent amount if two conditions were true:

1) If they already have to pay at least $0.01 (e.g. charge their credit card) to get it anyway
2) If they are previous customers who really liked what they bought from you before (BioWare are my favorite developers; if they told me to pay what I wanted for their latest RPG, I'd gladly hand over $50).

[defanual]

Can't you do something like that with paypal donate or something? Anyhow, it's definitely earned radiohead some nice free publicity if nothing else, this must be the 3rd or 4th time I've heard them mentioned in a game forum (or perhaps it seems just that way:confused: ).

Anyway, it would be interesting to see how this works for you or any other relatively unknown/fresh indie that isn't the equivalent of a 'radiohead', because other then that up to now it's been all good talk and speculation:rolleyes:

[Davaris]

If RH aren't selling it online for a donation anymore, then it was never intended to be their new marketing model. I suspect it was just another viral marketing exercise.

http://en.wikipedia.org/wiki/Viral_marketing

Personally I don't like this technique because its dishonest, tricky and manipulative. Definitely not the way to build brand loyalty.

[Huge]

I like the idea. I've been reading a bit about piracy, and I think this might be the answer. Something like:

"We understand that not everyone has the financial resources - blah blah - but we need some money to produce more games - blah blah - we are nice people - blah blah". Select your price:

o $0 - I can't afford any money to buy games. I will donate some money if this changes.
o $1 - I have limited money, but can afford something

o $5 - I do not have a full-time job

o $10 - My entertainment budget is limited because of the high cost of living

o $20 - I can afford $20 for good entertainment.

Alternatively, you could re-word based on "weekly income in $US"

o 0-$10 - Free!

o $10-$100 - $1

... or whatever.

The idea is that 1. It eliminates piracy 100%. 2. You can a chance to "pitch" your game to these potential pirates. 3. You can target people from developing counties, children, pensioners etc. who actually can't afford games, but can afford "a little bit".

People would still have to go to the "buy" page to unlock your game, and then make an explicit choice about how much to pay, rather then just convince themselves that "ok, I'll donate later".

[WaveRider]

I don't think "In Rainbows" is an accurate model if we consider the "gimic" factor. Allowing downloaders to set their own own price was a completely new concept; it had never been tried before. That fact alone may have
A: generated a lot more buzz and interest than normal, and
B: inspired people to pay simply to support this new idea.

Perhaps the first game you try this with will have a similar effect, but what happens when your entire catalog is "set-your-own-price" and the novelty has worn off? Will users still be inspired to support you when the concept has become your standard? Or will it eventually be viewed as freeware?

I'm not saying that it wouldn't work, I'm just saying that we can't make predictions based soley on the Radiohead "stunt".

[OremLK]

Plus, you have to remember that "donationware" is already a well-known and accepted practice for downloadable computer software and even games, and that's basically what this is. Radiohead's stunt was pretty novel in the music business, and what's more, they already had a huge, dedicated fanbase to drive it.

I really can't see this working unless, like I said, you already have a customer base who are enthusiastic about your games. And even then, you better make them pay something, even if it's just one cent, so that they're forced to go over that barrier to entry (charging their credit card). Otherwise they'll just view it as freeware, and the very anonymity and lack of trouble to download the game will prevent them from donating.

But I could see it working out okay if you meet those conditions. I know if I were forced to make a donation in order to get a game, I'd probably make it at least a few bucks, not just a penny or something. It's a vote of confidence in the developer, and I'd feel like an jerk if I donated the smallest amount possible. I could even see myself donating a more significant amount, $10, $20 or more, if I really liked the demo and was a fan of previous games.

But as a gimmick for your first game, I don't think it would work out.

[kaizokuace]

radio head's pay what you want worked because they have a huge name in the industry. If Bioware or Bungie did this they might pull it off but why? Their games cost like millions to make.
Nine Inch Nails recently released an album partially for free. The first 9 tracks are free to download but the rest is not. They have various packages that step up in price all the way to a few hundred bucks for a limited edition package with a dvd and stuff. I think offering range of pricing packages works. Maybe the demo version of a game can just offer a little more than is usually offered from demos. If they wanted to pay the customer can maybe get the download plus a box and cd in the mail. Or a collectors item. I dunno something to make them feel special.

[Spore Man]

Reznor first tested the waters with Niggy Tardust which was $5 or Free. Would be interesting to see those numbers, since we're not talking about a huge artist there.

What's interesting about Radiohead's excercise is that despite the album being available for FREE off their website, the album was still heavily downloaded via bittorrent during that same period.

Sometimes, convenience trumps all. People were willing to trade down sound quality from vinyl to hissy tapes because thanks to the Walkman it meant carrying music around with you. CDs provided digital benefits like better sound quality, but what really drove it home was the convenience of instant access to the track you want (no rewind / fast-forward!). Same thing for DVD.

Now with MP3 it's trading sound quality for the convenience of the file format and digital music players that let you carry around an entire "jukebox".

So...... back to peer 2 peer: It's ultimate convenience. Type in a search, and click download to get what you want. What if such a tool existed with a simple BUY button next to each search result and that buy button was instant, with no forms to fill out or anything like this? Forget about the logistics for a moment and just think about the kind of instant service this provides. I really believe people would go for this. (Not everyone of course). Convenience is a major selling point.

[teoma]

Plimus has a feature called "Allow Override Price"
Thanks - I'll look into it. (hopefully this can't be hacked, I don't want people 'paying' with a negative number or something)

You'll generally find that if people are offered something for free, from somebody they don't know (i.e. you), then they won't give you a cent.
You would have to implement some kind of base price
you have to remember that "donationware" is already a well-known

Using the term 'donation' indicates that giving money is optional and a gesture of good will. With my model, customers will have to pay to download the full version, but they can set their own price. Maybe have a 'processing fee' tacked on to the price they type in.

Setting a 'base price', or at least what the user perceives as a base price seems to be a bad strategy if that price is reasonable. For instance, if you set the base price at $10, you are basically deciding the price for them and no one will give more than that. But if you set the base price at $0.01 (plus the 'processing fee'), that might make people think 'how much is this worth to me', and *hopefully* pay accordingly.

What I can do (if I go through with it), is try this out for a while and compare the direct sales earnings to what I get from the portals, which would be at $19.95 or so. I can switch back if it doesn't work. In fact, I can even post a message to my customers that this is an experiment whose success depends on their support, and that if it doesn't work I'll be forced to switch to a different model.

I know it sounds crazy and gimmiky, but really the model is based on four assumptions:

1) Most people know they could get your software for free if they really wanted to (although illegally).

2) The ones that don't know this will probably be buying from the portals anyway.

3) The biggest obstacle to conversion is not price but convenience.

4) Most people would rather pay for an affordable copy of your software instead of pirating it illegally.

That last one's kinda tricky, but generally I find that people usually have some sort of perceived moral justification for pirating your software. Being able to pay what you can afford helps eliminate this I think. I could even put a 'We trust you' message on the pay screen.

Also, there will always be those that MUST have every piece of software, rom, iso, mp3, ect on their hard disk. These people of course do not have the means to pay for all the stuff on their computer (most of which they never look at), so if you could get some of them to pay even a little, that's money you wouldn't be getting otherwise.

I think it can be summed up in this:
Sometimes, convenience trumps all.

Being able to set your own price makes buying games more convenient, and hopefully gives enough push to get them past the inconvenience of a payment processing page. If there was a such a thing as a one-click buy button I would definitely do that instead (paypal should look into this).


One last thing (this is a long post!):

Let's say the warez loaders have their way. In a few years, all movies, music, games, ect are available as soon as they are produced for free with no advertising (actually that's already true). Free media for all right? That's what they want isn't it? So, that happens, and all commercial media producers go out of business because they have no way to capitalize on their products.

When people start longing for the days when movies looked better than your average youtube clip and music sounded better than your neighbor's garage band, what new business model will arise from that?

What types of revenue models will work best on a generation that's used to the convenience of piracy, but that is now willing to pay for quality content?

I think many in the industry would agree that that's where the market is heading, if only there was a way to help the general public understand the consequences of piracy.

Basically, the 'pay what you want' feature is a handshake between you and the customer, an informal agreement that you'll both carry out your side of the bargain as best as you are able.


So, sorry about the rant, I'll let you guys talk now. :)

[ChrisP]

Being able to set your own price makes buying games more convenient

Well, not really. It just makes it cheaper. :) You still have to endure the arduous process of going through the payment processor.

It is a nice gesture and might help a bit marketing-wise, but I remain unconvinced that your resulting profits would go anywhere except down, especially for an unknown indie.

[ZeHa]

What would you think about a "price depending on features"-thing? Of course strongly related to some "you decide!"-stuff-...

Let's say you make 3 different versions of the game, one is free, one is for $9,95 and one for $19,95, and as the price is rising, the features are rising as well. Maybe the free version hasn't got all the levels (but enough to be more than a demo version), slightly unpolished graphics (maybe like the difference between Sonic for Master System and Sonic for Genesis/Mega Drive (less colors, less backgrounds)), and fewer game modes - but as I said, it shouldn't appear like a demo version, make it clear that it's just the "free version". Then, the $9,95 is pretty much a standard version, and the $19,95 has additional stuff like more levels, maybe prettier gfx effects, multiplayer mode, or whatever.

If it's done like that, it could be that many people use the free version (just like with WinAmp etc), but I think if you add a strong "you decide how much you pay"-attitude to it, it might actually work.

What do you think?


EDIT: To make it clearer: The WinAmp-thing is "which features do you need?", and though it would be the same with the game, it should more appear to the customer as a "how much is the game worth for you?"-question, but going hand-in-hand with the "it will also result in the number of features"-thing :)

[barrygamer]

Let's say you make 3 different versions of the game, one is free, one is for $9,95 and one for $19,95, and as the price is rising, the features are rising as well.


Thats fairly close to what the LiveForSpeed (http://www.lfs.net/?page=shop) people did. Theres a free demo, then 2 license levels. OK, a racing game lets you easily limit the cars & tracks etc. IIRC, whilst in beta the price of a license was lower for the early-adopters, to help get some early cash coming in. They've been up-and-running for years, so something must be working out for them.

[teoma]

Interesting, instead of locked sections of the game saying "buy the full version", they could say "buy this item/level/feature, ect..."

I like it. Only problem is, people would want to know how much individual features cost, and if I hard code it into the game, it would be hard to experiment with pricing later.

Another idea is I could still implement the 'pay what you want', and the game will automatically download with x number of features already unlocked depending on how much they paid. Or better yet, the player can choose from a list of features so he can pick the ones he wants right off the bat.

How would you implement it though? Maybe download a binary 'key' file or something - it's not a very secure way of doing it though.

Thanks for the help. BTW, I still haven't gotten any comments on my other post, (http://forums.indiegamer.com/showthread.php?t=13074) I know its noobish, but just one reply would be nice. Thanks.

[AlexWeldon]

Type in a search, and click download to get what you want. What if such a tool existed with a simple BUY button next to each search result and that buy button was instant, with no forms to fill out or anything like this? Forget about the logistics for a moment and just think about the kind of instant service this provides. I really believe people would go for this. (Not everyone of course). Convenience is a major selling point.

What you're describing exists, at least for music. It's called iTunes. ;)

Regarding the original topic of the thread, though, I am a big fan of the idea of donorware, but as has already been mentioned, the problem is not that people aren't willing to part with a few bucks for something that they really enjoyed, it's about the hassle.

What if there was a site, like PayPal, but especially made for tipping. Let's call it tipthebellhop.com, say. To get an account there, you have to deposit, say, ten bucks. Then, that site's affiliates (musicians, game designers, etc.) can use your tipthebellhop login for their download pages. You don't necessarily HAVE to pay anything to download the song/game/whatever, but you have to prove that you have a tipping account with some money in it. Then, you just have to type the amount into the box before clicking the download link. Or you can come back later, after playing the game, and if you clicked the 'remember me' box you'll still be logged in and can still just type the amount of the tip.

The only trouble would be getting it going... you might have a hard time getting the first bunch of users to drop ten bucks into a 'tipping' account when only a handful of artists or game-makers accept tips from that site.

Worth thinking about, anyway...

[ZeHa]

I also thought of that long ago, and with that it would be even possible to sell stuff for $1 (or less), because if it would be just a single click, lots of people would simply do it, because the question "only $1 for a fine piece of software?" would be answered with "yes" by almost everybody. But it it's a lot of stuff to do (like doing a standard money transfer), most people would think "nah, I won't go through that hassle just for paying $1".

The best way for implementing such a system would be simply by using the telephone bill. It's something that every internet user gets and has to pay, so that would be the most elegant way.

But I guess the problem simply is security...

[Spore Man]

Another concept that was floated around many, many years ago is a sort of "fund drive" concept where you set a specific amount of money required in order to make a game and then customers pre buy the game and when you reach the financial target, it gets made.

This could work well for sequels to good games, since you would have an established community already, as well as an established reputation (so people aren't as suspicious that you'll run off with the cash and never make a game). People who pre-buy would be more likely to want to get the word out and encourage other people to pre-buy because if they don't, the target amount might not be reached and the game will never be made.

Might even work for musicians too?

[tagged]

The best way for implementing such a system would be simply by using the telephone bill. It's something that every internet user gets and has to pay, so that would be the most elegant way.

That's a great idea, but down under "naked dsl" is starting to gain attention/market share due to being cheaper than a phone line + dsl. I'm not sure if its due to the loving nature of telstra :p, or if world-wide it's catching on?

The "price depends on feature" thing.. Isn't it essentially expansion packs? More akin to those sims 2 "stuff packs". I'm not convinced a pay what you like model would work with games, there would simply be too many people paying the least amount and not feeling at all guilty when you go broke.

[ZeHa]

The "price depends on feature" thing.. Isn't it essentially expansion packs? More akin to those sims 2 "stuff packs". I'm not convinced a pay what you like model would work with games, there would simply be too many people paying the least amount and not feeling at all guilty when you go broke.

It's a similar thing, of course, but not really the same, at least the way I suggested. The Sims is "buy the full priced game, and later buy additional stuff", but the other way would be "buy the game, you've got three different versions to choose from - one is free, one is cheap, one is full". And the free one has restrictions (fewer game modes, fewer levels (only the important ones), fewer polish, no music, no customization options, maybe even b/w graphics, etc), the cheap version could be regarded as a "standard version", and the full version is over the top and has additional goodies and stuff, targeted for those who absolutely love the game and can't get enough.

With application software, there are so many examples of this, just look at WinAmp or even Windows.

Also, there are people who only play demos, because they want free games, and when 1h is up, they download a similar game's demo. Those people would choose the free version, of course - but at least they're not playing your game for only 1h! They're playing it longer and might even fall in love with it, moving on to the cheap or full version :) or trying other games from you.

And regarding expansion packs: With that model, it wouldn't be impossible to still offer some nice expansion packs, too. You might actually offer them only for the cheap and full version, so you'd force the free players to buy one and buy the expansion pack. On the other hand, you could also offer expansion packs even for the free version, it might be the better strategy.

[AlexWeldon]

It's a similar thing, of course, but not really the same, at least the way I suggested. The Sims is "buy the full priced game, and later buy additional stuff", but the other way would be "buy the game, you've got three different versions to choose from - one is free, one is cheap, one is full".

Or just a multi-stage shareware model... instead of your only options being a severely crippled version for free, or 30 bucks for the full version, maybe just do the game in episodes, like the original Doom, or something, and give away the first one for free, but charge 5-10 bucks for the rest on a per-episode basis. Then you can design them as you go, too... make sure you have one or two available to buy when you release the free one, but then see how sales are going. If the game's a hit, make more episodes. If it isn't doing well, then spend your time making the next game instead.

If you did all your games that way, then eventually you could base your website around that model... people buy credits (the more they buy at once, the cheaper they are) and can use them to buy episodes for any of your games. An alternate option would be a subscription plan for specific games, where you can sign up to be billed automatically for each new episode released (at a lesser rate than if you bought them manually as they came out) and get a download link sent to your inbox.

[GeneralGrant]

That's pretty much what Telltale Games are doing with Sam and Max. You can buy each episode rather cheap or a whole season at a discount.

[AlexWeldon]

That's pretty much what Telltale Games are doing with Sam and Max. You can buy each episode rather cheap or a whole season at a discount.

Yeah, I was going to mention Sam & Max, except I haven't played the games myself (on a Mac, and it's PC only... boo on them) and didn't want to sound like an idiot if their system didn't work the way I imagined it did.

I think I'm going to try that style with the puzzle game I'm working on as my first serious project. It's kind of a combination of Sokoban, Daleks, and a web game whose name I forget, but which involves trying to get to the exit of a maze without being caught by a mummy.

Anyway, the "story" of the game (such as it is... it's pretty light on story) is that you're a dwarf trying to reclaim your people's ancestral home by reactivating the runes that light up the caverns, thereby letting the dwarven army move in and chase out the monsters. It provides a convenient way of dividing the game into episodes, because each dwarven kingdom can be a separate level pack.

I'm debating whether to introduce a new game concept in each one or not. I guess I'll make the first one and see if the types of puzzles possible with the basic components get stale after 12 or 15 or 20 levels, or however many I decide to have in each pack.

[teoma]

Large Animal Games (http://www.largeanimal.com/) has a thing where you can download the game and after the first hour you get charged 1 cent a minute. Apparently they're getting the drm package from Double (http://doubletrump.com/) Trump. (http://www.playonarcade.com/?c=a) Does anybody know anything about this? This is kinda what I'd like to do - customers set their own price just by playing the game - I think it's a brilliant idea.

[dma]

Large Animal Games (http://www.largeanimal.com/) has a thing where you can download the game and after the first hour you get charged 1 cent a minute.

That's a nice idea. So for a typical casual game that you might spend 2-5 hours on, the price would be $0.60 to $2.40. (After the first free 60 minutes.) I think PlayOn Arcade (http://www.playonarcade.com/) is on to something here, and it will be interesting to see if other portals follow suit, since the whole $19.95 model seems to be wearing a bit thin. There's just too many games out there, and something like this could allow even the "non-hits" to earn some money.

[Davaris]

I think its a great idea as long as you can reach a point (say $19.95) where you don't have to pay to play the game any longer.

[dma]

I think its a great idea as long as you can reach a point (say $19.95) where you don't have to pay to play the game any longer.

Well, you'd have to play a game for 34 hours to reach that point. I think at most, a typical casual game might interest someone for 10 hours or so. So that's only $5.40. There may be the occasional game that interests one for a longer period of time, but still... 34 hours? To pay at most $5.40 for an average game instead of $19.95 is a great bargain for consumers, and may encourage them to try more games that they wouldn't otherwise want to pay for.