All games on Reflexive $9.99

Discussion in 'Indie Business' started by Jack Norton, Feb 3, 2009.

  1. mooktown

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    So insightful.. Can you tell me if a good casual game would also sell for a dollar? :rolleyes:

    I'm attempting to be civil through sarcasm, but how under priced can casual games become before you think its too far?
     
  2. Uhfgood

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    Supply and demand, anyone? Come on, folks. This is basic highschool economics. Hundreds of games are released and the demand just isn't high enough, plus the global economy is on a downswing. What happens when supply goes up and demand goes down -- you need to increase demand, and the one way to do it, is to lower your prices. Especially when you have games flooding the net, en masse, alot of them FREE.

    Granted they didn't tell you before doing it. Granted it may or may not mean lower profit for you. Then again, you may make more sales to make up for the drop in price.

    So you have one of two choices, either man-up and make something great, or get the heck outta Dodge!

    Complaining on here isn't really going to get anything done now is it?
     
  3. zoombapup

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    I think the problem here, is that many of us have already seen analogies in other industries that signal that this shift in pricing structure is really only ever going to end badly for developers.

    Frankly, the portals are in a position of power and they will use it. Much like any commercial venture where supply outstrips demand, they use that to leverage lower and lower margins for the supply chain until the dynamics of the supply chain change altogether. My prediction is that we will see a few "uber developer" companies in the casual space, probably some eastern europeans who develop a ton of casual games exclusively for a given portal. Essentially being "in house development" but outsourced to somewhere cheap.

    Your average one man band casual developer really hasnt got a chance. Much like a one man band farmer cannot stand up to the huge conglomerates.

    I think this might be a good thing, driving developers away from the gold rush mentality where they used to get into casual games because they thought it was where the money was at. I never liked this idea (George, I'm looking at you!!) because these guys can produce great games outside of the casual space. Maybe now people who are productive will realize that their best interest is served by becoming more adept at marketing thier own brand direct to customers again!

    As ever, you have to be smart, have a story to tell and make sure you find out who wants to hear it.
     
  4. zoombapup

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    Complaining is cathartic :)

    This whole notion of "make something great" just doesnt work. That whole notion has been done to death on these boards and Steve Pavlina's site before them. You cannot simply make something great and equate that to profit. You should probably say "make something great and learn to sell it".

    This really IS a great time to be developing your own games though. The number of outlets for games has increased massively in recent years. So the potential reach for games is massive now. You can get your game across a ton of platforms, out to a ton of people. The challenge is to monetize that reach in new ways.
     
  5. cliffski

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    Economics is not vaguely this simple. Especially for goods that are not commodities.

    People do not buy game A because its cheaper than game B. They buy game A because they like it and think it's worth the price.

    Try offering me World Of Goo for $20 vs LeftForDead + Assassins Creed for $0.01.
    I will buy world of goo.
    Games are not commodities, nor is music or books or TV or movies. Every product is unique. 'high-school' economics is useless in analysing this market.

    If it was valid, I would not sell a single copy of any of my games, because free games exist. As it goes, it's not that simple.
     
  6. Nexic

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    Most games won't generate anywhere near double sales by halving the price long-term. This isn't about revenue, this is about stealing customers at the expense of the developer.

    If everyone thought like this there would be no such thing as socialising.
     
    #366 Nexic, Feb 15, 2009
    Last edited: Feb 15, 2009
  7. jankoM

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    I was always thinking/saying that indie games are too expensive to be widely known as a good (affordable with good price/value) source of home entertainment, so on the one hand I hope this price reduction might be good in the long run. But I agree fully with what Nexic is saying one post up.

     
  8. Jack Norton

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    Some months ago (can't remember exactly when, was mid-2008) I tried my game Goalkeeper for $9.99 instead of $19.99.
    After one month, I had +20% sales, for a overall loss of -30% total income.
    My magic stones sales (which is already priced at $24.95) went up +25% permanently once I added the magic shop, only because that add-on also added some minor but nice features (perks and leveling avatars and many others). 99% of customers buys it together with the main game for a total of around $30 per sale.
    Now I don't know if for casual games works differently but that's my direct experience: everytime I lowered prices I lost money, everytime I raised it I earned more.
     
  9. Chris Evans

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    It would be nice instead of lowering prices, portals found ways to increase the value of games for their customers. Expansion packs, interactive strategy guides, music downloads, and etc. But I guess this is what direct sales are for. Portals have a stream-lined assembly process for releasing games but they're not really setup for releasing extra content for games. And since they receive so many submissions, it's probably easier for them to release a new game than manage the extra add-ons of older games.

    The main issue I have with these lower prices (which I think I already mentioned pages ago) is that if the game turn-over keeps getting higher then most developers won't reap the benefits of the higher volume except the top sellers.

    I don't know if Reflexive will share, but it will be interesting to get an idea of the conversion rates of the top 30 games from last month and the top 30 games two months from now (after the price reduction hoopla has settled down). Will the sales of games #15 through #30 be 3-4x higher? Maybe a high traffic affiliate could share this info?

    But I agree Zoombapup that we've seen this pattern in other industries and it's almost never good for the content providers. What's ironic though is that a couple of years ago when the casual market was in full boom, the few devs around here that were still encouraging direct sales were called crazy "idealist" and non-business savvy hippies. :) At the time supposedly the smart logical business decision was to put all your eggs in the portal basket. This whole Amazon/Reflexive dust-up should be a warning sign of being over-reliant on portals or any single distributor. It doesn't matter how good things are right now, things can change because the portal's agenda is not always congruent with developer's. Stay flexible.
     
  10. JGOware

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    "Now I don't know if for casual games works differently but that's my direct experience: everytime I lowered prices I lost money, everytime I raised it I earned more."

    Did your traffic stay the same during the period? If so, then ofcourse your revenue would decrease.
     
  11. PrefixEx

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    Personally, I am starting to believe this is exactly what will happen.

    It is like 0.99 cents songs on iTunes - There are probably no users out there who would pay 1.99 for a tune on Rhapsody or some other music portal if they are used to paying 0.99 cents. The consumer expectation is all tunes everywhere cost no more than 0.99 cents or ought to cost no more than 0.99 cents if they don't. Seasoned consumers will blog that no matter how good a tune is, it simply is not worth 1.99 which will have a cascade effect on the expectation of others.

    Its the attitude of "We've got the leverage and we control the means of how you get your product to market" that is the most troubling.
     
  12. Nexic

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    ----------
     
    #372 Nexic, Feb 15, 2009
    Last edited: Feb 15, 2009
  13. Jack Norton

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    Yes, of course traffic was the same. But as I said maybe for casual games works differently.
     
  14. mooktown

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    ..because when has talking about an issue ever resolved anything? :rolleyes:
     
  15. Maupin

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    They're not priced at a dollar. If they were I'd probably be complaining, too.

    Reflexive games are now priced at the same price many casual games were selling for in retail stores/Amazon (with box, with jewel case). And they're still more expensive than the average customer pays on Big Fish Games. And I'm continuing to sell about twice as many games on my affiliate portal as I did before the price change. And I've yet to have a single customer ask for a refund this month (which is pretty amazing and probably a side benefit of lowering prices).

    I'm still optimistic. For now. Maybe that will change.
     
  16. aiursrage2k

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    Has anyone tried doing episodic releases like American Mcgees Grim, where you make each release cheap ($3)
     
  17. Backov

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    McGee is running a studio in China. That makes his economics quite a bit different than most people here.
     
  18. JGOware

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    Hard to say. I wouldn't lower prices unless I expected traffic to increase as well.
     
  19. GolfHacker

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    I haven't noticed any increase in affiliate sales as a result of the price drop. The affiliate sales curve is holding pretty steady - same as the past couple of months.
     
  20. Sybixsus

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    I take it you're unconvinced by the argument that a lower price point could dramatically increase conversion rate?
     

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