Negociating a Higher Price

[Nexic]

Has anyone here sucessfully convinced any of the really big portals to use a higher price point such as 24.95 or even 29.95? I would like to attempt this but I don't want to bother if they are just going to give me a flat no.

I'm thinking of going 24.95 for the next game, and I think I can convince the portals that I already have a good relationship with, but ones such RealArcade (which I'm targetting with this game) may not accept. That wouldn't be much good as when faced with the choice of buying for 19.95 or 24.95 I know which the consumers are going to choose. The key to getting the 3rd party sites on board will be keeping the high price the same throughout all of them.

I have seen a few higher price games now, but they are almost always by the more established companies (BigFish, Grab etc) that can negociate things much more easily.

[Hidden Sanctum]

I'm not sure of where all your sales come from so I apologize if I'm a bit off here. If your sales are primarily through the portals and the idea is to get more $ per sale, then maybe negotiating a higher percentage for yourself would be a better option?

[Bachus]

I'm thinking of going 24.95 for the next game, and I think I can convince the portals that I already have a good relationship with, but ones such RealArcade (which I'm targetting with this game) may not accept. That wouldn't be much good as when faced with the choice of buying for 19.95 or 24.95 I know which the consumers are going to choose. The key to getting the 3rd party sites on board will be keeping the high price the same throughout all of them.

Be *very* careful in that regard.

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

[Savant]

then maybe negotiating a higher percentage for yourself would be a better option?
It would but that's never going to happen. Unless you're PopCap, you can forget about haggling for percentages.

[Hidden Sanctum]

It would but that's never going to happen. Unless you're PopCap, you can forget about haggling for percentages.

I find that strange. It might be the accepted taboo thing to try to do, but you'd think that those developers who have a proven track record of strong sales would be able to get a better deal than someone who doesn't have those same kind of sales. I'm sure Bruce Springsteen gets a better contract than some band called Aura from the record companies. Especially if they are exclusive contracts. They are publishers afterall, so the same rules should apply, yes?

[svero]

I don't quite get price fixing. I can see it for a good that has a particular base price, but what about IP type stuff. There's no lower limit to what you can sell a download for other than maybe the cost of bandwidth. So any company should be allowed to sell your game for 2 cents because ensuring a higher price is price fixing? Something seems a little off about that.. Is this a case of technology being ahead of the law? Anyone know more about this?

[Savant]

I find that strange. It might be the accepted taboo thing to try to do, but you'd think that those developers who have a proven track record of strong sales would be able to get a better deal than someone who doesn't have those same kind of sales. I'm sure Bruce Springsteen gets a better contract than some band called Aura from the record companies. Especially if they are exclusive contracts. They are publishers afterall, so the same rules should apply, yes?
That's what I said, essentially. Unless you are a PopCap level developer, you're not getting special percentages. It's all about leverage. If you wrote a Bejeweled level hit, yeah, you can write your own ticket. But most developers haven't.

It's all about who needs who the most. And generally the developer is the one doing the courting.

[arcadetown]

We do what the author wants. We've run some above $20 upon request but the games were extremely huge and gave it a shot as possibly compelling buy. Still not convinced was smart as think they'd generate a lot more revenue at $19.95. Family Feud does ok at higher price but my bet is ONLY because of brand name recognition.

Honestly I think this talk of above $19.95 pricing is cute but after playing with higher and lower pricing (upon author's request of course) I'm actually pretty convinced a higher price = lower revenue. Some will argue given their results but think it's from the boutique nature of their developer's site.

You can legally suggest a retail price (it's called MSRP) or even require a minimum royalty but can't require a retail price.

[papillon]

>So any company should be allowed to sell your game for 2 cents because ensuring a higher price is price fixing?

This sort of law is not my strong point, but from looking at that article, it has nothing to do with it being bad to sell an object above cost, it has to do with separate sellers agreeing not to challenge each other on price. The "If we both raise all our prices to $30 at the same time, people will just have to suck up and deal with it!" scenario.

As Nexic said, it would be so much easier to get customers to swallow $24.95 or $29.95 as the new price point if all the major sellers got together, hatched a plan, and raised to that at the same time. That's why it's illegal. :)

One seller deciding to raise the price isn't price fixing. One seller raising their price and the others seeing them and eventually going 'I think I want to do that too' and then raising the price isn't price fixing. It's only if the competitors work out a scheme together to manipulate the market.

I'm not sure where the 'anyone can sell for two cents' part of your question is coming from.

[Tom Gilleland]

I once had a distribution deal with large retail publisher for a $20 casino title. I was paid on a percentage. It sold fine for about six months, and then they decided to sell if for $5. I had made a mistake by not setting a minimum price in the contract. I barely made money at $20, but at $5 it was a loss in terms of tech support alone. And we have very low tech support on our products.

The bottom line, make sure you set a minimum sales price in your contract.

Tom

PS. At a later date that same company asked to get one of my titles for free, just so that we could get a lot of exposure. Like Duh!

[Bachus]

IANAL...

A developer working on a publishing deal with multiple portals is one of those legal grey areas that hasn't been fully explored in a legal context. It's not really a good where you're selling your product at wholesale for $20 and setting a MSRP of $30. Nor is it a service. Is a developer negotiating with several portals, getting a $20 price at each one, price fixing? Probably not, but it's worth thinking about.

EDIT: I had never heard of an investigation into online price fixing, so I assumed that there never was one. But I did a search just to be sure, and what do you know, one just began. New York AG to investigate online music price fixing (http://arstechnica.com/news.ars/post/20051226-5840.html).

[electronicStar]

IANAL but it seems that the price fixing law concern different sellers who are competitors, IMHO when negociating with a portal you aren't really in that case unless you sell it yourself on your website and even in that case I don't know if this law is applicable here because it's not really possible to set a real value price on a software, it's not like if you were selling diamonds, oil or bread. It's more like an intellectual creation.