All games on Reflexive $9.99

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

  1. DFG

    DFG
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    I totally agree. And what about other pricing points like $12.99, $14.99, or $17.99? I think each game needs to be tested to find the perfect price point in this economic environment at which net revenues are maximized. Hopefully data driven companies like Amazon and Reflexive will be able to measure and come up with this rather than driving the value down for all games.

    It just seems to me that driving almost everything (except Playfirst and PopCap titles who either had clauses in the contracts or were communicated with beforehand) down to $9.99 is a tactic to brand a site as being the lowest retail price rather than to maximize profit.

    This kind of tactic kind of smells like undercutting competition to drive some out of the market. If this was such a great economic move for everyone, why didn't Reflexive do it before the Amazon acquisition? Now that a deep pocketed parent company is involved, could it be Reflexive/Amazon are willing to accept less net profit in an effort to drive out competition, especially small developers trying to sell the same games on their own sites for higher prices?

    I am not saying this is the sole reason Reflexive/Amazon did this. I am sure it is to compete with the subscription programs that started this whole price war in the first place. However, I just can't see the reasoning behind dropping the price by half on even your best selling titles if you know you aren't going to increase net revenue by doing so. Therefore, there must be another agenda besides increasing profit for Reflexive, Developers, and Affiliates.
     
  2. KNau

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    Look at it this way - the portals are taking your work (that you took on all the expense, risk and time producing) and using it as a leverage tool in business moves that have bugger all to do with selling your game.

    You'll note that the pros contractually had exceptions made for themselves to prevent it from happening to them. Although your contracts have a cancellation clause if you're really pissed about this.
     
  3. Andy

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    What?! :eek:
    Yes, I'm kidding this your indie-guru.. :rolleyes:
     
  4. FlySim

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    Support is another problem with decreasing the price point. Say you try to match the portal $7 price point and you manage to get 3X customers - now you also have 3X the support costs.

    I doubt this price war is a good thing for independent causal developers and could also lower the perceived value of games for the rest of us (i.e. "I can get Hidden Match 3 Mania from Amazon for $7, why does this Indie game cost $20?" )
     
  5. Grey Alien

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    Yes this is a good idea. Of course you can't directly put upsell in your portal game, but if it's good enough then word of mouth should generate extra sales of the Deluxe/Gold version or maybe just level packs. Then you can capture their details and mail them when you make the next game etc. Or just make non-portal Niche games full stop/period.

    I guess what would be really neat is a proper BIG Indie portal that sold quality Indie titles at $19.95 (or more) and gave the developers a high royalty % and used the rest to fund the site. Then it could be marketed everywhere. As the casual market grew more people would discover that they actually like specialist Indie games and could use this big Indie portal as a starting point. So who's gonna do it? There's already been several attempts but nothing has made it big time - does that mean it's not possible or just that the right person has not tried to make it work yet?

    Basically, as with all business, it's change or die time by the looks of things. It's easy to get comfortable with how things work, but those who succeed are adaptable.
     
  6. Maupin

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    The goal is to increase the customer base. And thereby increase profits. I'm optimistic, but I do feel sorry for developers who used Reflexive's catalog to add content to their site alongside their own games.

    However, as has been said, a good game will sell at almost any reasonable price point.

    If only there was a thread about that very subject. ;) For the record, I agree with the naysayers.
     
  7. tolik

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    I disagree.
    Games shouldn't be $9.99 and there should be no trial period.
    There should be little to no distracting ads.
    They should be free with an option "pay as much as you want".
    That's the next step.
     
  8. RinkuHero

    RinkuHero New Member

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    There have been games that have tried that. I believe the freeware developer 'cactus' tried that with one of his games, with a minimum of 10 cents. The vast majority of people just paid the 10 cents, from what I gather.
     
  9. tolik

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    Set minimal number at $5.
    Micro-transactions shouldn't be phrased as donations or called micro because they are $0.10. Micro stands for "less than retail" or "ability to put money onto account and spend the budget in several smaller turns".
     
  10. arcadetown

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    What we need is change... the change the America public voted for. Borrow our way out of a mess. What a change. Oh wait....

    Cliff has it right in that a democracy will eventually screw itself given the average joe will easily get suckered by a bad idea. Luckily every other country including the EU and China is now doing "economic stimulus", otherwise known as printing funny money, so who knows where this will all go.
     
  11. RinkuHero

    RinkuHero New Member

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    The $5 minimum might work, but that may be the same as setting the price to $5, since I imagine very few people would pay more than that since they'd see $5 as its price. But definitely it's worth experimenting with, I agree.

    Also, from a technical standpoint, it's difficult to do this -- is there even a way to, say, set BMT-Micro or other e-commerce services so that the user can name their own price with a minimum?
     
  12. Applewood

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  13. Matthew

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    Actually, I've heard several accounts of donations where completely removing a minimum was the best option. IMO, cactus shot himself in the foot by setting a $0.10 minimum. If you post a minimum, people will pay the minimum.

    Sure, if you remove a minimum some people might pay $0.10 anyway, or $0.01, but many will not, and your average will actually go up.
     
  14. Thorbrian

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    I find the people pay what they want stuff fascinating - I can't find the article now, but back when Jonathan Coulton and some canadian music authoress had an article written about them both by the New York times by Steven Levitt (freakonomics guy), and they got a bunch more traffic, the music authoress said that she got *less* money from all the traffic and attention. The reason why is she published the average "sales" price for each of her songs, and most people pay slightly more than the average. When she got more traffic, people came by who were happy to pay much less, bringing the average down, and when the average went down, so did most of her pick-your-own-price sales numbers. It seems like maybe it would be good to publish a "average price by people who aren't cheapskates" if you are doing that kind of model.
     
  15. KNau

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    There seem to be two conversations going on here - one about Reflexive, the other about the doom and gloom economy. I'm joining in the latter :)

    In my opinion, maybe society needs to be toughened up a little. It wouldn't hurt North Americans to have a wakeup call over how decadent our lifestyle really is. Our definition of "poverty" includes color-tvs, DVD players, internet access and a car in every driveway. Maybe a million dollar McMansion in Soviet Suburbistan (with 2 SUVs) isn't all it's cracked up to be.

    In the crash of the 70s and early 80s it was the inner cities that turned into Mad Max style wastelands. I'm guessing this time it will be the suburbs that crumble because it's an unsustainable illusion of "lifestyle".

    Isn't there a Chinese curse along the lines of "May you live in interesting times"?
     
  16. DrWilloughby

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    The pay what you want model is interesting but there's no way it's a viable option for everyone, just for those with a passionate fanbase.

    I'm pretty ambivalent about the new Reflexive pricing model. But in the short term, it sure does make me want to start developing console games. It may increase the PC gaming market in the long term, but it hurts ME in the pocket NOW. Amazon can afford the investment. I'm less capable. Sure makes the PC market less hospitable in the next few years if the rest of the portals follow suit. It was already inhospitable enough.

    EDIT:
    It also hurts direct sales: If I leave my price the same, my games will look expensive and I'll lose the customers to the lower-priced portals. But if I drop my price, I'm not adding eyeballs. Sure, my direct sales are not Reflexive's problem, but it still makes me mad.
     
    #136 DrWilloughby, Feb 5, 2009
    Last edited: Feb 5, 2009
  17. Thorbrian

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    These are certainly valid concerns. However I think it's important to note that they are not new concerns for most developers. The effective sales price of many games sales through subscription and bundling packages has already been driven to the same level or below the new Amazon/Reflexive prices. Direct sales have already had to compete with those prices. This just makes that price competition more obvious.
     
  18. DrWilloughby

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    Uhhh... thanks? :)
     
  19. Chris Evans

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    That was basically my point earlier that we're in the midst of a price competition among the portals. Let's not pretend portals are reacting to closed platforms or the price of paperback (not hardcover) Nora Roberts novels. Amazon/Reflexive are attempting to increase their marketshare by under-cutting the price of other portals. Let's at least call a spade, a spade and debate the merits of what it actually is.

    The problem I have with the new pricing scheme is that it's too indiscriminate and doesn't optimize the revenue per title. Quite a few devs around here have done pricing experiments and found that there isn't one magic price point. With some games, you'll make the most revenue with a $9.95 price point, other games make the most at $24.95. However with Reflexive's new pricing strategy it just lumps all games of different size and scope into the $6.95 - $9.95 price range. Certain games will most likely miss out on their full revenue potential with this pricing structure.

    Ideally Amazon/Reflexive will be able to grow the market with the lower price points over time so revenue will increase with the overall volume of sales. But from a developer's perspective, just because the market gets bigger doesn't necessarily mean more developers actually profit from it. The casual market is exponentially bigger than it was 2-3 years ago. But many developers who don't make the top 5 lists are making much less from portals than they were a few years ago. The market may get bigger, but also the game turn-over may continue to get higher, royalty rates may continue to go lower, and game prices may continue to go down. So while the distributors are making more money, the developers are making less or at the very least their risk is increased because their margins are getting smaller while not fully benefiting from the volume.

    So this pricing strategy is probably a good business move for Amazon/Reflexive, but I think it's definitely a red flag for developers.
     
  20. Escapee

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    Actually, I'm more concerned about this and this more than funny money printing by centralized banks all over the world. ( obviously, there are somewhat related to certain extent). It's State sovereignty Vs Federalism, It's localized economy Vs globalism. Wow... What else should i say.

    There is an old Chinese proverb that gives me goose-bumps. "When things separate for too long, there unite, when things unite for too long, they separate."

    We certainly live in an interesting time.
     

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