View Full Version : This may be stupid, but then again...
I was thinking of this new business model as I was thinking about becoming a publisher, but since I am not going to do that, I will share it with you to poke holes in.
As I was sitting in Starbucks one day examining their retail business model, I noticed how you have several different coffee options at different price points. For the budget minded, you can get your Americano or house coffee or even a small late or whatever for a couple bucks. For the spender, you can get the works for 4 or 5 bucks in a real big cup. And then you have a couple options in between to try and catch everyone else and whatever mood you might be in etc...
I was thinking, could this model be applied to games?
For instance, do some people only really play a game for a month and then are done with it? Would there be a way to price a game at say, $12.95 and give them 1 month access with the option to purchase the full version for another $12.95 if they want it for more than 1 month? Seems like with DRM software like Armadillo it wouldn't be too hard to do.
Could you have different price points for different amounts of time to grab a buyer that may balk at $19.95 but bite at $9.95 or $12.95 or $14.95?
I for one would pay $12.95 for 1 or 2 months, especially since I go hard at the game and get bored with it. I may not pay anything at all if it was $19.95, but for $12.95 or $9.95 you might get my wallet instead of nothing at all. Some games though, I might decide are worth paying the full deal forsince I would play it for longer, although not many games I feel this way about.
It may be a dumb idea, but who says you always have to have a 60 minute demo and $19.95? Sometimes new ideas in an industry can have a huge impact...like possibly what 180Solutions is doing with their Adware based full versions (that would be another thread though if you would like to comment on it ;))
10-25-2004, 09:43 PM
I have been tossing around similar ideas. Although I was just thinking of it in terms of a subscription service. My game has a big online component, with multiplayer and new maps getting fed to clients from the server when they are available. So I was thinking that it could make sense to charge it as a subscription.
I don't know how many users would be willing to do this for a game that you download and play on your computer. Consumers (myself included) seem to prefer the idea of actually owning their digital things, rather then paying less to have them for only a little while. You can see the effect by looking at the music-download services. The big sales are coming from the iTunes store, where you download it and keep the song forever. The services where you subscribed for a while but then lost access to the music when you stopped did not do very well in comparison. It's not the exact same as the game idea, but similar.
10-25-2004, 10:39 PM
Seen Shockwave.com's GameBlast service? $10/month to play any of their games as long as you want (via DRM). Discounts and whatnot, too; basically their response to RealArcade's GamePass.
http://www.shockwave.com/gameblast/index.html for more info.
10-26-2004, 10:04 AM
Tiered payment structures are great. It can be easy to make them too complicated, but if you set them up properly, players will often upsell themselves on the initial purchase. And then again later.
For the original Paintball Net (1996-2000) we (eventually) had 14 levels players could pay for. Each level cost $10, and granted some in-game benefits (# of plays per day, amount of equipment that could be carried).
With Artifact (1999-present), we have a tiered structure that starts at $39.95 for the one-time payment options. There are 5 one-time payment options, and players can upgrade their accounts for $19.95. The highest teir, though, is a subscription payment of $19.95 for 3 months that offers the most benefits.
I liked the simplicity of the original Paintball Net setup. $10 per upgrade worked pretty well. The Artifact setup has had its ups and downs over the years, but it's still cruising along.
10-26-2004, 10:58 AM
There are already lots of people who regularly pay about $5 to play a game for a week or so -- it's called "Blockbuster game rentals". :)
Use the term "rental" and people will instantly grasp what you (DFG) are selling. ("Subscription" is not appropriate because nothing is recurring.)
10-26-2004, 11:18 AM
Speaking of rental models, and a little off topic, but you guys should check out:
Works just like NetFlix, except with console games. I've been a member for a few months now and I've played more console games than I had in the entire previous year.
10-26-2004, 01:06 PM
We've been asked by prospective customers on a few occasions if the $19.95 price is for a month.
I'd have loved to have been able to say yes ;)
Sure, you could call it whatever you like as long as it is not misleading. You aren't forced into any terms that might have baggage.
There you go, they don't do PC games but it is a very effective model. $5 a week for play...I don't think it has been tried that way yet.
I had forgotten about that Matthew, thanks. I received a trial email from them yesterday, I wonder how well it works for them? I know Real plays hardball with their Game Pass with the exclusive deals and so forth.
It is interesting that the models are evolving. How does Real and Shockwave compensate developers for this and how do you feel having your games sold at such a discount? Can you still make money if a third party is heavily discounting and taking the lionshare of profits?
>$5 a week for play...I don't think it has been tried that way yet.
Well, the biggest problem with prices that low is the lack of a "standarized" way for doing micropayment. It's just doesn't work if you ask for $3 and get $0.5 at the end.
Using some kind of tokens could solve it, but then you would need tons of games (I guess you would need about 30 at the beginning).
Couldn't you just take payment for the full $5 like you would but the code (or download) you send unlocks the 5 day version?
Nah... I ment that the processing fee is too high. The overhead vs payload ratio is just too bad, if the customer pays for example via credit card.
10-26-2004, 06:44 PM
Not sure if this advances the conversation, but I just wanted to mention charge.com. They're a reseller of Linkpoint International (you can't go directly to Linkpoint, you have to find a reseller). Anyway, they make it entirely easy to process credit card orders through your website. They charge 25 cents per transaction plus 2.89% of the transaction. They also charge $30-40/month just to use them. Not too bad if you ask me. Anyway, once you sign up, (if you are going to use PHP, although they have API's for other languages), all you do is include their PHP file, put the information in an array, and call a function (you need CURL installed) and it does the rest! You can set them up to handle sales tax, shipping and handling, and use their fraud prevention stuff too. It can make your site look very professional by handling your own credit card transactions. I will be using them in a couple months (or 3-4 months ;) ) when I start selling my first products on GearFace.com.
Anyway, at their rates you'd make $4.60 of any $5.00 sale (25 cents plus 2.89% of $5.00), minus of course the $30-40 monthly fee. It wouldn't take many sales to turn a profit.
I stumbled upon them when choosing a credit card place for a commercial product I was developing, and ever since have been a big fan. Just wanted to share!
10-26-2004, 06:49 PM
Yeah, I use Linkpoint myself. The percentages are certainly much lower than a processor!
10-27-2004, 05:11 AM
Am I missing something?
What makes them any different than say Digital Candle, BMT Micro, Plimus, etc.?
They may be a little cheaper than the standard 10%/transaction rate, but otherwise there isn't a difference.
10-27-2004, 08:06 AM
There's a fundamental difference - with a processor, they are making sales. You 'sell' the product to them, which they sell to other people. With a merchant account, you are making sales yourself. This has a bunch of legal implications, some good, some bad, lots I have no idea about. It's a matter of one more thing being directly in your hands. It gives you the control, but also the responsibility and risk. I literally make my own order pages, direct from scratch, rather than having someone else's page with more or less modification options. The pages are all on my server. All Linkpoint does is kind of connect me to the bank to check the card and charge it.
In practice, it's not much different (except the challenge and freedom of making your own pages - when I started my Halloween Sale - ALL GAMES 10% OFF THIS MONTH ONLY AND FREE HALLOWEEN GOODIES WITH CD ORDERS AND DON'T FORGET WE ALWAYS OFFER 20% OFF MULTI-ITEM ORDERS SO 30% OFF OF THOSE THIS MONTH!! *koff koff* this month, I initially had it broken so it miscalculated by 1 cent, which resulted in failed orders because the subtotal didn't match with the total), but it's a lot cheaper - provided you have enough sales. $40 a month can be a big percentage if you're making few sales.
Another difference that probably doesn't matter to most people (personally, it annoys me, and I'd rather have this the processor way) is that you get paid by direct deposit within 3 days for every order, instead of a monthly check. That amounts to a lot of punching into Quicken!
Another major difference, which is also annoying, is that you have to pay the sales tax for your state, which is a yearly pain to calculate and deal with (and of course you have to collect it, unless you fancy paying for it yourself).
Why's it worth the annoyances? The control and the savings!
10-27-2004, 08:32 AM
Thanks for the explanation...
At this point, I'll stick with ease :)
10-27-2004, 08:35 AM
speaking of various pricing options:
he talks about that in the what went right section.
Here's the relevant bit
Diverse purchasing options - The range of payment options we implemented allow different types of players to get into the game at their own pace. The game client is free to download, and trial players can get started with five different sample decks on a fixed map. There's enough gameplay in the sample games to get players excited about buying in and collecting their own cards. Purchase options vary from $5.99 for a few packs, all the way up to $49.99 for a box of 36 packs and 6 event tickets. There's an optional $5.99 monthly subscription that gives players special perks like promo cards, enhanced web trading, and the ability to play in special tournaments. Many casual players will just buy in for $20 to $50, and that purchase provides months of gameplay. It is not uncommon for some hardcore players to spend hundreds of dollars over the course of many months. This, intentionally, doesn't buy them raw power as much as improved versatility. Therefore, where the casual player might be able to build competitive decks for three races, the hardcore collector can build a deck for each of the races. Players are free to buy and sell their cards in the secondary market, something that Nayantara stays out of.
10-27-2004, 08:35 AM
There's a fundamental difference - with a processor, they are making sales. You 'sell' the product to them, which they sell to other people. With a merchant account, you are making sales yourself. This has a bunch of legal implications, some good, some bad, lots I have no idea about.
Don't know about others but with Plimus works the same way.
For the lazy ones, here's cut & paste from their FAQ's:
Our relationship is that of a reseller, we buy the products from you and sell them to the end users, this means that we have to collect CA sales tax from all customers in CA when buying a non-electronic only product. You do not need to collect any sales tax, we do it when needed and we pay it to the authorities.
10-27-2004, 09:23 AM
My initial reaction to DFG's idea is positive. I think it's a good idea from a purely conceptual standpoint. However, I haven't thought through all the ramifications. If you decide to try it, let us know how it goes! In fact, maybe I'll try it too... <shrug>
10-27-2004, 10:14 AM
Yeah, Jack, that's how processors work (have to to be legal, otherwise they're "factoring"). Merchant accounts are the other way.
10-27-2004, 12:32 PM
ShareIt, on the other hand, collects the payments without assuming ownership of your product. This makes you responsible for taxes, etc. Likewise with PayPal.
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