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Last of the Seal Pelts: Revenue Doubles After Price Drop
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Last of the Seal Pelts: Revenue Doubles After Price Drop
by Ian Stocker on 02/02/12 11:59:00 am   Expert Blogs   Featured Blogs

The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.

 

Last month I posted my hypothesis: My games would sell better at 80 points ($1) than they would at 240 points ($3).  You can read the whole article (and amazing comments follow-up), but I know if you click away I’ll probably lose you forever, so here are the bullet points:

  • Since almost all games are priced at 80 MSP, this has become the normalized price to the buyer.
  • Pricing at triple this is viewed as arrogant by customers, and you won’t even get them to download the trial.
  • Having prices in Microsoft Points, instead of native currency, changes the customer’s mindset to thinking in terms of “how many games” rather than the real cost of each game.

The publicity this article generated delighted our marketing department, but rankled my team of statisticians due to how it might corrupt the experiment.  Personally, I was fine to tolerate some bad data in the service of making extra cash.  In any event, there was a surge of downloads and sales immediately after the article and price drop, so I needed to figure out how much of this was due to publicity and how much of it would last.

I wrote about the immediate results just over a month ago: revenue more than tripled at the lower price.  Now that we have over a month behind us, and my article has been long forgotten by the customer base, we can see a more normalized level of sales.  Let’s look at the month of January as a whole.
Comparing November 2011 to January 2012

November, at 240 MSP ($3):

  • Combined sales Soulcaster I & II:  57 units ($119.70)
  • Average revenue per day: $3.99
January, at 80 MSP ($1):
  • Combined sales Soulcaster I & II: 374 units ($261.80)
  • Average revenue per day: $8.44

It looks like things have leveled off to the point where my revenue is more than double what it was at the higher price.
You can see the way revenue has trended from November 1 thru January 31, and the chart speaks for itself:

Cuddly Chart

There are a few remaining unsolved mysteries, however.

1. Why did sales start trending up before the price drop?

The new dashboard rolled out a week before my price drop.  In that time, I suddenly got a ton of new sales.  I wasn’t featured on any dashboard promos, and the marketplace should have been in turmoil while people figured out how to get to their Game Type.  Did I get a sudden raft of new traffic from Related Games?  I have no idea.

Did anyone else experience this?  If so, please comment!

2. Why were sales higher in the first couple weeks after the price drop?

Conventional marketing wisdom says that people found the game because of the article and increased exposure on the interwebs.  Some forums such as NeoGAF and CheapAssGamer picked up on it, not to mention the reprinting of the article in Gamasutra.  Simple, right? A bunch of people heard about the lower price and went to buy it.

This is a tragic blow to my soothsaying reputation.  One of my original positions was that conventional marketing does nothing for XBLIG games:  being a world of its own, ads and media attention have little impact on sales.  Well, I was probably wrong about this.  The spike in sales right after the price drop and publicity demonstrates at least some correlation between media attention and sales on XBLIG.

Though I maintain that it doesn’t make a very big impact, I have to admit I underestimated the value of marketing for a game by placing it around zero.  It’s definitely worth some time investment to get coverage.

Then there’s another factor to look at:

Did Top Rated position play a role?

I think the top rated list has less impact than it did before the new dashboard.  Here’s why:

  • Escape Goat has climbed from #52 to #34 in the past month, but sales continue to taper off (as they do for all new games)
  • Soulcaster I stayed around #60-68 the whole time
  • Soulcaster II climbed from #140 to #58 (a significant jump) but always sold a similar amount to Soulcaster I.  In fact, Soulcaster II sold slightly higher than Soulcaster I in January, despite it being lower on the Top Rated list.

I don’t mean to suggest that Top Rated means nothing, just that in my experience, it means less than before.

Is There a Future for Games over a dollar?

The big news since my article is that Microsoft has made the one dollar price point available to larger games.  I think they realize that XBLIG has become the Dollar Menu of Xbox Live, and in almost all cases the games will sell better at one dollar than at three.  With the stroke of a wand, they make more money and we make more money.

Since the change, several other XBLIG’s dropped down to 80 MSP.  Cthulhu Saves the World, according to Robert Boyd, saw sales jump from around $46 per day (at 240 MSP) to $109 per day (at 80 MSP).  Also, check out this sales chart for Take Arms from Discord Games.  “Doubled” doesn’t seem to begin to describe the impact the lower price has had there.

So what happens to the higher priced games?  Steve Ballmer rang me at home just the other day to ask me.  I said, “Dude, you’ve gotta split the brand.  Let’s do the Toyota/Lexus thing and offer two marketplaces.  For the 80 MSP games we still have Indie Games, and for 240 and 400 points, let’s call it Indie Games Black Label.”  Customer perception will change, and customers will tend to compare the higher priced games among one another.  Dark Souls sold well at $60.  Cassie’s Animal Sounds, basically the same game as Dark Souls, could have been priced up there as well, but, contending with customer perception, had to be priced at 80 MSP.

If they split XBLIG like this, that brings us up to Five Game Types.  That’s too many.  So, the next logical step is to merge XBLA with the $3+ XBLIG games.  Combine the ease of publishing of XBLIG with the features of XBLA and you have some very happy developers.  And happy games come from happy devs.

The Demise of Seal Pelts?

At the time of this writing, there’s a very credible rumor that Microsoft may do away with Magical Seal Pelts entirely.  Time will tell whether it happens or not, but as you can guess, I am 100% in favor of this.  This would do away with the point-hoarding mentality and improve sales, especially for us little guys.

Conclusion

With their latest move, Microsoft has solidified XBLIG as the 99 Cent Store of Xbox Live.  Now, more than ever, having a game above 80 points will hurt your sales.  Also, marketing does play a role, so if you drop your price, let everyone know.

That reminds me!  As of today, Escape Goat is now 80 MSP.

Has your game done better since dropping the price?  Worse?  Comment and help build my body of anecdotal evidence!

Originally posted at IndieGamerChick.com


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Comments


Bradley Johnson
profile image
Took me a second to figure out what Magic Seal Pelts are.

I 2nd (or 24,517th) the motion to get rid of them.

Maybe after that XBLIG developers can charge something weird, like $1.99.

Wonder how that would affect sales.

Jeremy Reaban
profile image
Would getting rid of points really help sales? I mean, you can get frequently get MSP on sale, so while you might be getting 70 cents out of 80 points, the buyer might only be paying 35 cents. Not to mention the many, many giveaways of free points.



By contrast, how often do you see PSN cards on sale? Or giveaways?



And on PSN it's frustrating when you only have like $4.89 left, and you want to buy something for 4.99. And you can't just buy 10 cents. Nope, have to buy another $5. Same problem with points, but at least those aren't taxed.


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