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Why Rampant Sales are Bad for Players
by Jason Rohrer on 01/15/14 03:21:00 pm   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.

 

First, a bit of news: the Castle Doctrine has a confirmed Steam release date of January 29, 2014. The alpha will end at that point, along with the 50% discount.

Over the years that I've worked on this game, I've done a lot of thinking about game pricing. I've been inspired by the way Minecraft pricing worked. Essentially, the price just kept rising over time.

Of course, this flies in the face of the modern trends, from the race to the bottom in app stores, to the back-to-back Steam sales, to the super-lucrative bundles. Games generally start out expensive at release time, then get cheaper when they go on sale, and eventually become effectively free when they are put in a name-your-price bundle.

And I totally get it. As a Steam developer, I've made much of my Inside a Star-filled Sky money during Steam sales. Sure, I made 25% of my lifetime Steam revenue during my launch week, but I made an additional 10% during my first sale, which happened only a few weeks after my launch. After that initial taste of extra, no-effort money, I participated in sale after sale. I was hooked. In the long tail, my daily revenue dwindled down to almost nothing, except during the sales, when there would be another big spike. I mean, making $3K over a few days, and a full year after launch? Hard to resist.

http://thecastledoctrine.net/newsImages/cultureOfSales/skyGraph.png

(As you can see in this graph, in 2013, I stopped participating in Steam sales. Oops!)

In 2009, Steam had its first big sale. I'm guessing that they were blown away by how much money they made, because they followed that sale with three more sales the next year. These days, they have 5 gigantic sales each year, which means that a sale is pretty much always just around the corner. And even better, in between the sales, there are publisher sales and weekend sales and deals-of-the-day and so on. Something is always on sale.

On its face, this seems like an obvious win for game developers: they get to revive their dwindling long-tail numbers with a big revenue boost, and a sale will bring more latecomer players into their games too. This also seems like a win for players: people who can't afford to buy a game at full price get a chance to play it later, for cheaper. The audience grows, and more people get to experience the game. Good stuff.

But I suspect that something different is happening. Something that is arguably bad for players, and possibly bad for developers as well.

To put it bluntly: sales screw your fans.

Your fans love your games and eagerly await your next release. They want to get your game as soon as it comes out, at full price. But they are foolish to do that, because a sale is right around the corner. Even in economic terms, the extra utility of playing the game early, at release, is not big enough to offset the extra cost for most people . It makes more sense to wait, unless they love you and your work so much that they're willing to throw economic reason out the window. It's nice to have fans that love your work that much. And these are the fans that you kick in the teeth when you put your game on sale.

But forget the fans for a moment. A culture of rampant sales is a culture of waiting. "I'll buy it later, during a sale." Launch weeks become weak, and developers grow to depend on sales for financial survival. Even in my example from above, 25% is a pretty sad launch week. In my case, that represented something like $23K. I made more selling the game through my own website. Pathetic. Of course, sale after sale, later on, pumped my revenue up to way more than what I made on my website.

This waiting game is likely decimating your player base and critical mass at launch by spreading new players out over time. And your fans, who are silly enough to buy the game at launch and waste money, get to participate in a weaker, smaller player community.

Finally, there's the possibility that the culture of sales actually reduces developer revenue over the long term. If just half of the players who buy the game during a 50%-off sale would have bought the game at full price if that was their only option, we'd already have a wash. What fraction of sale-waiting players fall into this category? I suspect way more than half. The picture gets even worse for 75%-off sales.

To balance this out, we would need a whole lot of people who will buy random games just because they are on sale---games that they had no intention of buying otherwise. Maybe there are enough of these people, and I've certainly met some of them: people who have a backlog of 50 unplayed games in their Steam library. Maybe they'll never play them. But even if there are enough people doing this, it's not a good thing. It's just people being tricked into wasting money on stuff they don't want or need. Better that they spent that money on one full-price game that they really want rather than four 75%-off impulse buys to add to their backlog.

http://thecastledoctrine.net/newsImages/cultureOfSales/hugeBacklog.png

All that said, I get why a culture of sales has blossomed, and I also get that it's impossible to escape from it now. To Valve's credit, they never force developers to put their games on sale. Of course, when most developers are putting their games on sale, it becomes harder for the remaining developers to make sufficient revenue without joining the sales, which means even more developers will put their game on sale, which means that players will know that pretty much every game will be available at a deep discount sooner or later, which means that more players avoid buying games at full price, and so on.

And to be fair, selling older games at a deep discount isn't something that modern developers invented. It's in our blood from way back:

http://thecastledoctrine.net/newsImages/cultureOfSales/bargainBin.jpg

But a bargain rack for physical retail makes perfect sense and is actually pretty great for everyone. Shelf space is limited, as are the number of available copies of a given game, and retailers need to eventually liquidate old games to make room for new ones. But the temptation for players to wait until it's on sale is weaker, because there's a good chance that an awesome game will sell out before it ever hits the bin. Just try finding a copy of Rez, Ico, or Rock Band 3 in the bargain bin. Some games even sell used for more than their original retail price. Other old games are almost impossible to find.

When we're talking about digital games, the potential full-price lifetime is pretty much eternal. There is no shelf space. Even the long tail isn't a hard-and-fast rule anymore. As the game's audience grows, revenue can actually climb over time, sometimes even making launch week look like an insignificant blip. Consider Gary's Mod, which has been selling steadily, at an increasing rate, for seven years:

http://thecastledoctrine.net/newsImages/cultureOfSales/growingSales.png

Yes, there are some big, thin spikes there during the sales, but they are insignificant compared to the day-to-day full price volume. And how much thicker would that daily volume be if players weren't waiting for sales?

Okay, but what are the alternatives? More importantly, how am I going to price The Castle Doctrine? If you buy it at launch, are you going to be screwed a few weeks later by a sale? Am I going to make you wish that you waited?

Let's consider the implications of the Minecraft pricing model. What if, instead of inevitable sales as a game ages, the price rises over time instead?

For the fans, this is a great thing, because their die hard fanhood is rewarded with a lower price, almost like a secret deal for those who new about the game before anyone else. When the price goes up later, they feel smart. Most importantly, they don't feel torn between supporting their favorite developer at launch and saving money. They can do both.

For people who find out about the game a later, after the price has gone up a bit, they may regret not buying the game before the increase (a lesson learned for next time), but they can still feel smart buying the game now, before it goes up again.

For the people who buy the game the latest, after the final, permanent price has been reached, they had the chance to wait to hear more about the game before buying. They had less to lose at that point, because the game has been vetted and the community established.

But in general, people who missed lower prices in the past may not even be aware of what they missed. They come to buy the game now, and see the current price now. On the other hand, when your game goes on sale later, everyone who bought it at full price remembers what they paid and feels the sting. Being unaware of what you're missing has a different psychological impact than having what you missed thrown right in your face.

Indeed, people gripe openly when they buy a game only to see it discounted next week. They even email developers and ask for refunds. Who complained when the price of Minecraft went up?

No one, because the Minecraft pricing model also permits total openness about future pricing plans. You can safely announce, "The price will go up next week. This is the last week to get the lower price." This will create a huge revenue spike as people race to get the game---no problem there.

However, if you're planning to put the game on sale next week, you can't announce it, because you will cannibalize this week's full-price revenues. Even worse, people who would decide to wait upon news of a forthcoming sale may forget to come back and buy the game later. They're at your website now, and you can't afford to scare them away now. So, you have to keep the forthcoming sale secret. You have to surprise people. And burn people. The worst case here is pretty awful: the sorry person who buys the game one minute before the surprise sale price kicks in. You're going to get an email from that person.

So, the rising price model is really just an inversion of the sales model. You get revenue spikes later in the life of the game, right before announced price hikes, which are very similar to the spikes induced by putting a game on sale. But there are no surprises, so no one feels screwed by the process.

In the case of The Castle Doctrine, the "ever rising" price model was a perfect fit for other reasons. As a massively-multiplayer server-based game, it required extensive testing before launch. I could reward those early testers with the biggest discount. Also, as a server-based game, each additional "copy" sold is not without cost to me: it's one more player logging into the server, and potentially one more player who will need tech support during an outage. I can't just pepper the ground with cheap or free download codes, because download codes are actually lifetime accounts.

So, here's how it is going to work:

The final price of the game will be $16. During alpha testing, up through launch, the game has a 50% discount for $8. During launch week, the game will have a 25% discount for $12. After launch week, the game will rise to full price.

http://thecastledoctrine.net/newsImages/cultureOfSales/pricePlan.png

In other words, this is the last two weeks to get the game at 50% off (ending January 28). If you want to wait until launch on Steam, you can get it for 25% off if you buy it during the first week (ending February 4). Otherwise, the game will be full price at $16 forever after that.

Anyone feel burned by that plan?


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Comments


Sjors Jansen
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Sounds good :)
You did not promise that there would be no sales ever though.

I personally think that's a hard promise. Because if there ever comes a time when you really need it, (I don't know, some freak accident,) you could probably put together a Jason Rohrer Bundle and get some money off of it. So I hope you don't burn yourself with that plan.

I've been talking to some consumers about exactly this by the way, mostly for moral reasons. I remember I used to feel so screwed as a kid when I saved up all my money to buy a game and it went on sale only a couple of weeks later.
Reading through comments and reddit and such has left me with the impression that most of those consumers see it as: You're dumb if you buy a game at full price.
And from the developer's side it's seen as: You raise the full price of the game so you can have 'bigger' sales. (80% off looks better than 50% off)

It's all manipulation but people buy into it.
"What did you buy? Far, far too much, as I have absolutely zero impulse control and I just got a new PC." - Keza MacDonald from IGN
http://kotaku.com/were-buying-more-pc-games-than-we-can-play-1493
402988
http://www.ign.com/articles/2014/01/15/our-steam-sale-confessions
http://www.reddit.com/r/gaming/comments/1ucmwb/steam_sales_means_
pc_gamers_buy_more_games_than/?limit=500

Oh, also crowdfunding seems to be sort of a middle way of dealing with this. In general prices are lower for funding then for when the game is released. In case of broken age, a lot of backers said that even if the game would not deliver, just seeing it come together and being part of the process was worth every penny.
Part of a downside (in my opinion) are the exclusives. A lot of crowdfunding projects have them. They also happen with regular games, store deals, exclusive DLC. Stuff that is not available later on, even for a higher price.
There are also plenty of people who feel screwed that way. If marketing about a 1 month kickstarter didn't reach them for instance.

Well, thanks for the post. I'll probably do something similar.

Jason Rohrer
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There's also a strange argument that the hoarders (who buy 100s of games and never play them) are the economic saving grace of the whole system. The prevalence of hoarders, the argument goes, guarantee that developers will make more money than they would have if the game hadn't gone on sale. They guarantee that the whole thing is not an economic wash (or worse).

But who is paying the price, then, if it's not the developers? Well, what about the people who waste money on things that they will never play? That's like tricking people into giving you money for nothing. Again, this is bad for players.

We have a hard time answering questions like, "How many people who waited for the sale would have bought the game at full price if the game never went on sale?" You'd need to run parallel possible worlds for an answer.

But Valve has all the data at their fingertips to answer the question about the prevalence of hoarders, and what percentage of sale revenue comes from hoarders. How many people who bought something during the Holiday Sale haven't played it yet? How many haven't played it by the end of January?

Regarding promises: yes, I promise.

Alfa Etizado
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I don't think it's tricking people, also people who hoard aren't all impulsive buyers. I hoard, for a number of reasons, even though I sometimes go through a massive sale without buying anything.

Bundles get me games I'll likely never play. From here comes most of my hoarded games, and I bet that's the case for most people. I still play the games that motivated me to get the bundle.

Sometimes I get 3-4 games during a big sale, games that don't always go on sale, just to "stock" on games that I really want to play for the next few months or so. You could say "hey, you already have all those games you're not playing", but odds are those games are bundled games I never wanted.

Sometimes I get a game I really want but know I won't play for the next several months simply because of currency exchange. The dollar keeps getting more expensive for me, it might be cheaper to buy sooner than later.

Sometimes I get a game because a friend really pushed me into getting it so we could co-op, putting other games I'd play in the backlog.

I'm sure other people can come up with their own reasons. I don't think a lot of purchases are purely impulse buys, and even if that's the case, nobody's being tricked. People buy games for a ton of reasons, and they know better what's best for them.

If we look at what's happening, objectively, there's no trick being played when a game is sold cheap. The consumers knows what their getting and for how much.

Also, I have bought games before they went 75, knowing they'd go 75, and didn't regret it a bit. My guess is that a lot of people already know how it works on Steam, that have grown used to ignore the prices and instead check for 50/66/75, and that know games go down with time, that won't be surprised or upset when they see a game they got for 50% off going for 80% off.

Sjors Jansen
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@Jason Rohrer:
My hat goes off to you sir.

To play devil's advocate though..
People waste money all the time. Who are we to try and prevent them from doing so?
Are they not wasting a single cent if they buy.. game x for $10? How was this magical price point determined, and does it come with a guarantee?
Are they wasting money if they never finish the game or experience all the content?

I find those pretty hard questions and it's probably very subjective. With on the one hand stuff like free 2 play whale exploitation and on the other kids protection regulations. And of course consumer opinion on a whole other hand.
I do know that Spiderweb software for instance just avoids the whole issue and gives a 1 year money back guarantee and that seems to work out really well for them.

Tyler Martin
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"But who is paying the price, then, if it's not the developers? Well, what about the people who waste money on things that they will never play? That's like tricking people into giving you money for nothing. Again, this is bad for players."

I'm sorry, but if someone is stupid enough to pay money for a game they'll never play just because it's on sale, and continue to do this for multiple sales, then said person is an idiot. They haven't been "tricked." Saying they have implies some sinister motive on the part of the seller to take their money when the problem is really just a complete lack of self control on their part.

I own 132 games on Steam. I tend to buy a handful with each sale. I've never bought more than I had the time to actually play. This is because I have a functioning brain and a modicum of self control.

Game companies are in the business of making and selling games, not being their customers financial babysitters. They are as faultless here as the shoe store that has a sale resulting in my mom buying a couple of pairs of shoes that she will probably wear less than five times.

Tyler King
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@Tyler Martin
Please stop either trolling or belittling people. I myself am I gamer and have around 250 titles on Steam. Of those I probably have beaten or played enough of it to call it good(Looking at you TF2!) around 40 titles. Currently have around 10 titles installed. 1 main one that I'm personally playing through, 2 or 3 that are fun time diversions for 5 minutes when I don't have time for anything else and about 6 or 7 others that I only play when friends and I have the chance to play together. That means that I have around 200 untouched titles. Do I have plans to play them? Sure as many as I have time to(Which isn't a lot as I have a full time job, family, and contracting work I do on the side.), so realistically I probably will never play 150 of those games.

So am I an idiot? Everyone has their hobbies. Many, many of those hobbies are 10 times more expensive than being a gamer. One ticket to a caps(Hockey) game will run you $20 to several hundred depending on where you sit. Going to the movies will cost you $10-20 dollars each time and that lasts you a mere couple of hours of entertainment. I can list a thousand different ways and hobbies that are less cost effective as me buying games that I might never get to.

I'm a working adult with a family I'm supporting and have a budget that I live off. However I budget in money for entertainment just the same as most other people who are fortunate enough to be able to do so. So instead of me going to the movies and spending $15 bucks there, guess what I just bought the Ultimate Sonic bundle on sale for $15. All because my friends are playing Sonic All Star Racers Transformed, and I want to be able to go back and Dreamcast Sonics :D. However that still means that I just bought an extra 12 games that I have no intention of playing. Idiot!!! I should have not bought the bundle, even though it was cheaper than buying the racing game alone. Because now look I have an extra 12 games sitting in a virtual space taking up all my limited virtual steam space. I've played the racing game for maybe 3 hours. Who so far has gotten a better deal for their money, me or the person who went to the movies? Or on the same note what about the person who buys a game for $60 dollars when it first comes out. 2 years later I buy it for $5 along with 10 other games totaling $60 on Steam sales. We both play the game for let's say 10 hours. We got the same experience, only now I have 9 other games I got for the same price. If I don't play all of them its ok, because I'm spending less than the person buying 10% of the games full price.

I also buy(and got the bulk of my games) from humble bundles. Hrmm I only want 1 game out of the the 10 games offered. I can either buy that one game for 10 dollars, or... I can spend 10 dollars and get the whole bundle while supporting awesome charities.

TL;DR
Just because we have lots of unplayed games doesn't make us stupid. I likely have spent less than you for your 132 games and probably own double the games. Also sometimes its just awesome supporting developers I like even if I don't have time to play all of their stuff. So please don't throw out blanket statements that everyone who owns a game they will not play is stupid.

***
On another note I also love steam sales for presents. I buy some cheap ones that I are on friends list then save them until their birthday pops up. So sales are great for more than just filling my own library.

David Paris
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When I had a "real job" (outside the gaming industry), I used to make substantially more. Back then, one of my consolations was that in my workroom I had bookcases full of every game that interested me that came out. I didn't have time to play them all, but they made me feel good and comfortable knowing that they were sitting there for a time when I had the time and inclination to play a particular one.

So I think that means I've always been a 'hoarder', even before Steam. However, now that I have switched over to the gaming industry as my career, my income is a lot more limited, so there's no way I would be able to purchase that amount of full price games. That's a shame, since I also happen to be someone who absolutely revels in thoroughly exploring the medium, and I play and love games of every stripe on a regular basis.

These days, instead, I count on Steam (and occasionally GoG) to fill that same desire. Sadly, I simply can't buy things new because that would mean I bought very few titles at all, but instead I patiently wait for those 75% sales, and pick up stuff 6 months down the line and happily play them. Do I have a bunch of unplayed Steam library games? Sure, but not from Steam sales. Those are from Humble Bundle :P Generally I buy a Humble Bundle for 1-2 games and the rest clutter my library. Games I bought directly are games I play.

Ricky Bankemper
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I like to think of myself as a collector rather than a "hoarder" lol. But I fully agree with @David Paris.

I just enjoy owning the games... I have probably only played 40% of the games I own. Thankfully I only have this "problem" with video games lol.

I like to think I am building a collection for when I am older and retired. As I fully intend to play the games i purchase.

Josh Foreman
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I have more games than I will realistically play. I'm not stupid. But I think it's fair to say my lack of thinking through my life realistically in this regard is stupid. Everyone does stupid or wasteful things. That doesn't define them.

Jim Shepard
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Great article! It does appear to me that you're not seeing the value that players get out of rainy day collections. I don't think that buying games that go right to the backlog is wasting money, and I haven't really seen that feeling from players, but that's anecdotal. Still, it feels to me like a stretch to say that people buying cheap games for the backlog are being screwed or wasting money.

Kyle Redd
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I hope that a few months after your game hits the full, final price of $16, you will come back and write a report on how the experiment went. I strongly suspect, though, that you are going to be very disappointed.

Particularly for a multiplayer-only game such as yours, if you don't get a certain mass of players right off the bat, you are going to get a lot of negative reviews where the primary criticism is that finding someone else to play with is difficult. That will lead to a death spiral of declining sales because the player base will get smaller and smaller, leading to more negative reviews, leading to fewer sales, and so on.

Since you have guaranteed that your game will never go on discount, there will be no way to reverse that trend once it starts. Your devoted fans may feel grateful that they were "rewarded with a lower price" for buying in early, but will those positive emotions outweigh the regret they feel from being effectively unable to play anymore?

And of course, this all is dependent on your game being highly-praised by those early adopters to begin with. Even if this turns out to be the case for you, most other developers could not depend on that reception with every game they make. If they were to follow the same strategy, and the early reviews for their game are lukewarm or worse, they're completely screwed. They will have a small sales spike during the launch period, followed by a rapid decline that no amount of free updates and improvements could stop.

Kyle Redd
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I had another question that I hope Jason will share his thoughts on if he has time. What if a developer were to follow your model, but with a timeline and pricing model that are both expanded further than what you are using for Castle Doctrine?

As an example, let's say that tomorrow Valve announces Half-Life 3 is in pre-development, and that consumers could buy the game now for $5. Then every 3 months, the price goes up another $5 until it reaches its final, retail price of $60, never to be reduced again.

Would that be consistent with your philosophy on how games should be sold (Valve's most dedicated fans will buy the game immediately and be rewarded with the lowest price)? And do you think it would be the wisest option for Valve, financially?

Josh ua
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I'm not being tricked into buying a game when it's on sale. Even if there is only a 5% chance I'd play a game, I feel the <$5 at 80% off still warrants the purchase, because there is that chance I'd like to play it later.

It's like a warm blanket. I know the game is there if I need it. However, if that game was full price I would NEVER buy it. I only buy my favorite games full price (my last full price game was Skyrim).

My equation is this. Only the top premium games in my favorite genre get bought near full price. Outside that, if the game is even remotely good, I'll buy at 75% off almost no matter what.

I would almost blame developers for this problem. Since there is a glut of maybe 100 games of purchasable quality each year, you almost need sales so that consumers can afford to buy your games.

Michiel Hendriks
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Rampant Sales might attract players. I wouldn't buy your game at $10, I might pick it up at 66% discount because... why not. Maybe I'll like it, maybe I won't. Maybe I will buy your next game at full price, or not.

Nathan Mates
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Here's the problem with your position: you're trying to go against supply & demand. The supply of games competing for my time is increasing by hundreds to thousands per year. And my available free time for entertainment is constant to slightly declining. Over the past twenty (or so) years, the amount of entertainment you can get for a low price has exploded. You can argue that consumers will get more entertainment-hours per dollar spent than a first-run 3D movie ($14+), but netflix streaming at $8/month undercuts you. By a lot. With cable TV's hundreds of channels, netflix/amazon/etc streaming, etc, let alone public libraries, the average entertainment-hours per dollar spent is NOT biased in favor of most full price games.

You can try and put yourself up as some luxury good worth paying a higher price than others -- nice free marketing for yourself in publishing this -- but if you don't succeed, you're going to be worse off than if you hadn't.

Kyle Redd
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That is a good point. Jason's outline only considers the cost of games in dollars, without any consideration to the cost of time needed to play them. Right now, he is selling an $8 game that is competing against x number of other games consumers are trying to find the time to play. When he raises the price to $16 in a month, he will be competing against that same amount, plus every other game consumers have purchased in the interim.

Sam Derboo
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This is of course individually different, but as a fan of a game/developer I gladly pay the full price, well knowing that I could get it for half or quarter the price a few months later. Isn't that what fans do, give full support to the products/creators they like?

I think equally as important (and not at all ethically questionable) as the horders are those customers who are not totally sold by the concept of a game and don't consider it worth buying for full price, but would gladly at 50%. In theory you got things covered for those, but those are also the customers who don't follow all the news about your game and are not likely to even notice until it comes up in a Steam sale. Also mind that you've forever(?) excluded all customers who would have bought the game later at 60%, 66% or 75% discount.

For example: I was mildly intrigued by the concept and the art of Shelter, but the full price was simply a no-go for me. I gladly picked it up at 75% discount and enjoyed what I've played so far, but I find my intuition confirmed, at full price it no doubt would have left me with mixed feelings whether or not my money was well spent. I probably wouldn't have regretted buying it at 50%, but I'm not sure if that would have been enough for me to dare buying it.

But well, without really good statistics (so good even Valve will have a hard time to collect) this is all just wild guessing.

Ron Dippold
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Obviously, this is personal, but every game has a personal mental value. If it falls below that, I will buy it - sometimes that's full $60 at launch day. If it never falls below that I will never buy it. Some games I don't even 'buy' for free (not worth the time). I don't feel bad if I see it later cheaper. The only question is if I got my money worth when I play it. I can still feel somewhat 'cheated' on a $3 game. Sometimes I feel bad because I way underestimated how good the game would be (Defender's Quest).

That this is shared by at least some other people is somewhat backed up by Community Choice games seeing their sales spike even before voting was over. People are buying something right now at twice the price than they can (possibly) get it for in four hours. I suspect visibility is far more important than a 'mere' 20% off sale, and it's the combination of visibility + falling below mental value threshold that gives you the huge sale spikes.

There are also people who don't buy Early Access since it's such a time waster, so will miss the $8, but might buy at the $12 price if they see it during that first week. Once it hits $16, if the game never goes on sale, they may never buy it barring any publicity that really increases your visibility.

But! I don't have any hard data to back this up, other than the occasional article on here ( like http://gamasutra.com/blogs/BradCarney/20140110/208432/The_Impact_
of_Launching_a_Game_on_Steam.php ) and personal behavior. You should absolutely do what you feel is right and it'll be very interesting to see your results.

Bob Johnson
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Yeah I think this system gets people to buy a ton of games they never end up playing just because the prices are so cheap. And I can't help but think it trains consumers to wait for a sale. And that it might devalue IP.

At the same time some of us just are never going to pay $50-$60 for some games. IF your product costs next to nothing to distribute shouldn't you eventually find a pricepoint that will cause those non-customers to say yes?

But then you look at Nintendo and they don't like to drop the price of their games. They think it teaches consumers that games aren't worth much. Then I can only think that quality will follow pricing. If you train consumers to expect lower price then you start delivering games made for those lower prices.

John Owens
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I think all it requires is balancing.

Generally the people who buy your game on sale are people who would only buy your game on sale and the people at full price would buy it at both price points.

i.e. The two are different.

What you have to make sure of is that the frequency of the sales doesn't cause the full price gamers to just wait for the sale because you may even find that by the time of the sale they may even have moved on completely as they're generally time poor but cash rich.

Have regular sales is similar to just setting a low price and telling people it's on sale. Having no sales causes you to miss out on a lot of money that generally doesn't really effect the full price sales unless you do it too much.

Adam Bishop
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"Generally the people who buy your game on sale are people who would only buy your game on sale and the people at full price would buy it at both price points."

I can only speak for myself, but I've only paid full price for one AAA PC game since Steam started doing its sales because I know I can get them cheaper if I'm willing to be patient. In my mind the ceiling on the cost of a PC game is about $30. I have bought smaller indie PC games at full price ($10-15) because I want to ensure that smaller developers get more revenue, but not with big budget games.

Conversely, on consoles I still buy several $60 games per year because that expectation of an eventual sale isn't there. That said, the fact that I can get so many great games at lower prices on PC has shifted a lot of my gaming away from consoles and toward that platform, so it cuts both ways.

Trevor Florence
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Please excuse the scattered thoughts.

The race to the bottom effect of mobile game pricing has left us with an ecosystem where all the top-grossing games are "free". I think the PC gaming community has not quite come to this point. Indie games seem to suffer from this somewhat. It seemed like 5 years ago $20 was a pretty common price point. These days, $10 or $15 seems to be more common.

While I can understand many of these points, trading higher costs for less players has the side effect of limiting the growth of your player and future-fan base. For many people, they may be familiar with a game but not be really willing to purchase it until it drops to impulse-buy territory. While developers tend to interact with the most rabid fans, there is a much larger group of players who never engage with the online community though still enjoy the games. It seems to me that many developers make games because they want as many people as possible to enjoy the experiences they have tailored not especially to become rich.

There's also the issue of quality and customer perceived value. Presumably players will purchase an item once it drops to or below the value they think it's worth. By lowering a price as time goes on, you expand your audience of people willing to invest financially and temporally in a game.

I think it's still possible to increase your player base while keeping quality constant but I think it takes a very excellent game to achieve that. No one wants to be told their baby is ugly, but not all games are created equal. I'm not sure this model would work as well for fun but not monumental games.

Biz W
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the problem with sales is more related to how developers are forced to adapt

when some stakeholder doesn't see enough revenue from product sales, there isn't enough pressure to make a better game next time. it's resulting in pressure to do better marketing or change the business model to free-to-play + micro-transactions which doesn't suit every game

John Trauger
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You can devalue your product with too many sales. Steam can devalue their entire system if they run too many sales.

I'm not sure Minecraft is a good example to work from. if your game isn't as successful as theirs you could end up pricing yourself out of the market.

So players feel screwed if you put the game up for sale a few weeks after launch. Who can blame them? not me. Maybe you just don't want to do that.

What's a proper grace period after which it's cool to run a price drop or sale? The gamer who bought at launch would want to have played the game long enough to feel he got enough out of it that he wouldn't mind seeing someone else coming in for less.

A price drop or sale only weeks after launch means those who waited get essentially the same experience as the gamer who bought on launch. What about 3 months? Would a gamer who played since launch feel that he was far enough 'ahead" of the new players who came in on the sale? Six months? maybe a month or two after your sales spike at launch calms down?

It's not that you don't ever run a sale or drop the price. It's that you do it in a way that respects your playerbase, it seems to me. There will always be those who were unlucky enough to buy a day/week/month before such an event and regret it some. But a good game ought win most of those players over.

Michael Stevens
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"This waiting game is likely decimating your player base and critical mass at launch by spreading new players out over time."

I've been thinking about this a lot lately, as we convert our tabletop game to an app. I feel like there are still a lot of unnecessary barriers to really making online games work in the long term, particularly when it comes to cross platform play. Many of my favorite multiplayer games of the last five years (especially on console) essentially don't exist anymore or are in situations where the ship has sailed for new players and that just wouldn't be the case if we could get everybody swimming in the same pool. I'm *never* going to find someone to play Senko no Ronde with.

Part of our solution is going to be running a kickstarter so that we have a big ball of players invested and waiting for us at launch, and we can probably get away with asynchronous play, but that's still going to be a huge uncontrolled force effecting player's experiences. The hoarders don't help in that scenario.

John Wallace
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Eugen Systems and Wargame : Airland Battle is almost a great example.

They started with a pre-order and early beta access.

"Pre-Purchase now and receive access to the beta! Users that own Wargame: European Escalation receive 25% off the Pre-Purchase of Wargame: Airland Battle as well."

So customers who previously bought European Escalation are rewarded with a substantial discount while having access to the beta. Other users have to purchase at full price.

Three months later though they had a steam "mid-week madness" sale for 66% off...

That 25% discount suddenly feels a bit less sweet.

Jason Rohrer
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I'm not so worried about the plight of hoarders who can't control themselves, nor do I think we should babysit anyone.

But a lot of my developer friends brag about how much they made during this or that sale as if it is unquestionably a good thing. I recall asking a few of them about the fact that many impulse buyers don't actually play the game. They kinda shrug and act like that doesn't matter. The attitude is like, "As long as I get some money from them, who cares if they play the game?"

But from my perspective, in terms of how I want to interact with my audience and make a living for myself and my family, it DOES matter.

I'm not doing this to make money at any cost. I'm doing this to make the most amazing game that I know how to make, and get it into the hands of people who are going to play it and benefit from it, and get financial support from those people so I can continue doing what I'm doing.

I don't want you to buy my game if you're not going to play it. If you want to give me money in exchange for nothing, please use the Donate button on my website. :-)

Also, I've worked for two years full time on this thing, and poured my soul into it, and it comes with a lifetime account that I will be maintaining until I die (and making arrangements to keep it going after I die). It has a fundamental, irreducible value that really can't be discounted.

For folks who don't think it's worth $8, but would try it for $4.... those people clearly don't get my game, and it's probably not for them. I'm doing something weird, and it's not for everyone. They're probably not going to like it, and we might both be better off if they saved their $4 for something else.

There are people who watch the trailer and say, "Holy crap, that looks amazing." Those are the people that I really want to connect with.

I saw a lot of this with Inside a Star-filled Sky after various Steam sales. People going WTF in the forums, and hating the game after buying it for cheap and only playing it briefly (I could see their hours played) because they paid so little for it.

Trevor Florence
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Thanks for the well articulated explanations Jason. Good luck on your release!

Ron Dippold
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This makes a lot more sense to me than the economic argument in the main article. Thanks for clarifying - I'll definitely give it a look.

Hugo Cardoso
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I think you're under the impression that everyone who buys games on sale do so because it's better than paying full price. But what about all the people who simply can't afford your high price?

$16 for someone in the US (avg wage $3.7k) is a lot different to $16 for someone in Portugal (avg wage $1k). What about all the people in Portugal who would love to play your game based on the videos/reviews but can only afford $4?

By never having sales what happens is, the people who wait for a sale because they don't want to pay full price will eventually buy it for full price but the people who wait for a sale because they can't afford the full price will never play your game and in doing that you miss out on revenue and potential new fans.

Ricky Bankemper
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@Jason Rohrer

This is complete passion for video games and their creation. I have been putting off developing a game of mine for a long time because gamers are way to hateful. It seems like they would crush my passion with their seemingly spiteful judgement.

Thanks for the article and specifically this comment. I have never really given it any thought before. Definitely eye opening.

Sam Derboo
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Saying not being convinced by a trailer means people won't like the game seems a bit like a stretch, but let's assume your exception is almost entirely correct and 95% of people who'd buy it on sale for $4 wouldn't like it. That would mean there were short burst of a lot of people who try it once and never come back, but there's also that hypothetical 5% that might really like it. Are you convinced that this would make things worse for the game and its userbase?

Also, if your game is "something weird", I wouldn't be too concerned with people who buy for cheap and end up not liking it. At least they've had the experience and know games like that can and do exist. Informs their appreciation of the medium for the future. I wasn't particularly happy with the experience of Papers, Please for example, yet I'm really, really glad that I had the chance to play it.

Mitchell Fujino
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Your arguments are conflicting with each other. So what about the gamer who doesn't follow a lot of gaming news, and doesn't hear about your game until after launch?

Maybe he thinks it's only worth 8$ (it was worth that much a month ago, right?) but the current price is 16$, and he doesn't want to spend that much.

Has the requirement to understand ("get") your game suddenly increased? Have you connected with enough people that you don't want to connect with this new guy?

And value of money is relative.. why are you giving the middle finger to people who can't afford 8$, with the argument that the inherent value of your game is absolute, but then not being consistent with that, and saying 8$ isn't good enough a month later?

Richard Urich
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The reality is my game purchases are limited by my time, and not my money. So sales mean I spend less dollars on games to keep a steady supply. Sales are good for me as a customer, but obviously bad for developers since they're competing over fewer of my dollars. I also know for a fact I save more from sales than I spent on my vast collection of unplayed games, so I don't buy the idea that sales are bad for customers.

As a developer, you have to convince me your game is a better value proposition than other games. More important, you have to actually get me to know your game exists. A sale draws attention to your game and ensures your value proposition is artificially inflated, so it is simultaneously giving you the exposure required and making your game sound like a good buy.

I think you'll find that not putting a game on sale is a bad idea for almost everyone. Minecraft probably wants long-term customers, so they want friends to convince other friends to play so they have social ties keeping them interested in the game. An impulse buyer is a lot less valuable for Minecraft. Minecraft also gets tons of free advertising. Most games are not Minecraft.

Kenneth Blaney
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"Even in economic terms, the extra utility of playing the game early, at release, is not big enough to offset the extra cost for most people."

That is completely incorrect in economic terms. If playing the game early was not a factor, your early buyers would not buy early (because they are not foolish in general). In fact, very many of your die hard fans would probably pay more than full price given the opportunity to do so. This is why special editions of games that come with little add ons (books, statues, variant cases, etc) or higher level tiers on a Kickstarter exist. This is also why some companies can even charge a premium for early access. (Consider if the next Call of Duty offered access a month early at $300. How many do you think that would sell even though all those purchasing are 100% guaranteed they could buy the game eventually for a fifth of the price?)

Every potential customer has a price at which they will buy your game. For the super fans of your past work, this might be quite high (and it is fair to recognize their fandom in some way with bonus content). For others, however, it might be somewhat lower. Sales seek 2 things with respect to this: first, they seek to raise the profile of your product (if someone hasn't heard about your game at all, their buying price is $0) and second, they seek to lower the price to at or below the purchase price of some of your potential market.

Robert Green
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Kenneth has a point here. It may seem irrational to place such a high value on getting something on day one, but we know that many people DO place a high value on it, so pretending there's no utility to those people in buying it early would be foolish. After all, we live in a world where people will pirate a movie or TV show just because it won't be available legally in their country for another few days.

Having said that, I agree with Jason's bigger point, because I've seen it happening in myself. I have never bought a lot of games at launch prices, but especially where AAA games are concerned, now even when I see them at half price on steam, I find myself thinking "another few months and a steam sale and it might be half that again". The surplus of games available, in addition to the ones I've already purchased and haven't finished, means I can always afford to wait. And for the stranger, indie stuff, it's almost a matter of principle - if I feel like I'm taking a risk on buying a game, and I'm in no hurry, then why not wait for a decent discount? In this context, the price it's normally selling for is almost completely irrelevant. I know it'll be less, and I can wait.

I should note though, that I almost exclusively play single-play games, and look to the board/card game world for my multiplayer fix. If I played a lot of multiplayer games, then the utility of having them sooner would be much higher.

Andrew Pellerano
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What you're really talking about here is a more general concept I call "rewarding the faithful." There are already many manifestations of this in gaming: collector's editions at launch, pre-order bonuses, day-one DLC rewards, kickstarter early bird specials, etc.

Pricing your game lower at launch seems like one of the more risky maneuvers because while it does reward the faithful you are also selling your game at a discounted price to your biggest fans who are some of your most price insensitive customers.

Maybe an alternative thing to ask from Steam is that if games create launch bonuses that promote early adoption then Steam will have special surfacing on the storefront for those games.

George Blott
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I'd set your final price at 20$, and just have it permanently on sale 20% off!

C L
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I play a lot of games, but I don't consider myself an avid fan. What I mean is that, I don't have a passion for just about any game. The last one I paid full price for was SW:TOR but for a non-MMO, Mass Effect 2. Frankly, I have no "burning passion" to play just about any new game, with the one current exception of Star Citizen, which I bought in at the lowest price I could without getting frills like ships, etc.

Essentially, I don't buy any games until they are under $10. Period. That includes even "blockbusters" like Skyrim. On the other hand, once they get into that territory, and more so as they get lower, I'll just buy on general interest. If there weren't the steam sales, I would probably buy less. A lot less, as like many Steam customers, I have a ton of games sitting unplayed. I also have a ton of games I've never finished. If I had to pay a lot more, then I would only buy games where I feel the price is "worth it".

Overall, I'm guessing that I currently have spent far more by buying "cheap" in aggregate than I would ever have bought at full price.

Brian Milligan
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Personally, when I'm a fan I don't mind paying full price to play the game fresh, give a little more to the developer that I trust, and play it throughout its lifetime. Steam sales make me buy and play games I wouldn't usually buy, often making me a fan that will pay full price for the next project coming from that studio.

The Witcher games are prime examples, I bought Witcher 1 & 2 on big sale, fell in love and will pre-order or day 1 the next CD Projekt Red release at full price and won't feel "screwed" when the sales come.

Robert Crouch
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I would consider something when you think about sales though.

These sales are advertised. There's a lot of stuff on steam. If I don't know about a game, say Inside a Star Filled Sky, but I feel like playing a new game and unbeknownst to me a procedural infinite shooter would fit the bill, how do I find one? More specifically, how would I find your game?

If there's no sale, I go to the games menu in the store. Well am I looking for action? casual? This takes me through the top 100 new releases for each. None scratch that itch. After scrolling through those 200 titles I realize that I do want a shooter, but not a typical one, so I type shooter into the search, and get 21 pages of results. And if I haven't seen anything that tickled my fancy in the first 12 pages, I stumble across it by the 13th. That said, I have to have some reason to actually look at the game's description to find out that it's actually what I do want. If I've been reading info on all of the games in the first 12 pages, by this point I'm already tired of searching and will have given up.

So then you either have to already know about the game and find it by name, see a friend playing it, or some other method of discovery.

Say on the other hand you have a sale on, it shows up on the store's front page, people click on it, it looks interesting and they buy it. Some want it, some don't.

Sure, there an effect on the decision based on price, but there's also an effect on decision simply based on visibility and marketing that is implicit with sales.

Today, Darkness II is listed as Today's Deal. I don't think I will buy it, it doesn't look appealing to me. But I've seen it, I've at least seen the cover art. I've judged that it isn't interesting to me. It's 75% off sure, and if I was on the fence, maybe I would buy it. However, even if I really really would love that game and would be happy to pay full price, there's a very very high chance that I would never even see it except that I saw it on the front page. I wouldn't find it by search or by the games list. There's just too much there.

Andrej Bjelakovic
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There are gamers, like me, for whom, most of the time, it's either 75% sale, or piracy.

I am never buying Minecraft, now that it's reached its full price.

Dominic Camus
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And this is the big downside with starting at 50% and going up. Most gamers on limited budgets will just never play the game.

Game designers have to make enough money to pay the bills, but most of us want as many people as possible to play our games, too. Personally, I wouldn't feel happy ever releasing a game under a strictly increasing price model, knowing I'd locked some players out of playing.

Carl Chavez
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I think it should be pointed out that Minecraft has (at the time of this post) has sold over 12,000 copies within the last 24 hours at full price. That means that it has raised more money in the past 24 hours --at full price and years after its release-- than many indie games that appear frequently on sales and in bundles ever make. That's a pretty powerful number to look at.

(You can always get Minecraft's latest sales stats here: https://minecraft.net/stats)

Steven Kilpatrick
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That is tough, because that's like pointing at World of Warcraft's subscription numbers and trying to use them to pitch the market value of a month-to-month pay cycle for an MMO.

Some people love to talk about how their game will get traction because WoW has dumped 5 million subs in the last few years. Others, like SWtOR and Elder Scrolls Online will tell you that the giant 7 million strong subscribers mean that there's still a huge market for the 15 dollar per month cycle.

In reality, WoW is not a healthy rubric to build a business model on--which studio after studio has learned.

Likewise, comparing a traditional Indie experience with a game like Minecraft, which has been consistently managed and updated, is a quick way down the path to false equivalence.

Notch and his team did a lot of things right AND hit lightning in a bottle with Minecraft. That won't happen for everyone--and to plan for that is like turning out your pockets ahead of time.

The reality is, most games launch, they have a nonexistent tail, and without updates, they fall quickly from our minds--there are enough options that if you present a model that doesn't offer long term value--which means added value over time--then you can stand on an island of principle and everyone else will be playing an 8 dollar copy of Deus Ex: Human Revolution, Saints Row 4, or Skyrim.

Obviously, if you can do the added value thing, it makes total sense to charge based on the notion that it's a constant value and not a single shot value--but for that model to work, you have to have the community involved and you have to earn that trust.

Notch earned the trust of gamers and didn't treat them like adversaries out for a free ride. That earned him loyalty. That, in turn, earned him dollars.

Adam Dmytriw
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Big fan of your stuff, Jason. I think perhaps that you misunderstand the hoarding phenomenon for at least some people. When I purchase a game (on sale or not), I genuinely want to play it and delusionally believe that I will do so imminently. But then, life can often get in the way.

I purchased Minecraft in the early days in exactly the way that you describe, knowing that it was going to go up in price eventually. It took me a full three years to get around to booting it up with my doctoral degree in the way, and yet I was confident enough in the game to know that it would be worth saving some money and I was not disappointed.

Now, I have just purchased the Alpha of The Castle Doctrine. I sincerely hope that you will not regard me as someone who should have just hit Donate on your webpage in the three years it might or might not take me to find a moment's respite during a medical specialty training program. My situation might not be the most common, but I assure you that the inadvertent-hoarder phenomenon is.

Jacob Liechty
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So, you don't give a whole lot of reasons to actually accept your conclusion that Steam sales decrease total revenue, since you doesn't have two opposing cases to compare. Basically every game ever uses sales, and you only shows one (yours) where revenue decreases over time and another (Garry's Mod) where it increases over time. And... both use sales. What you don't discuss, is whether people actually want to play your game, price aside. Whether there's even a reason to enter your game's community, to get in early, and for the game to be more fun when more people are playing. Is it? Could you make it so?

It seems to me that you're playing a PR game of "I totally care about the player" while hoping as quietly as possible that the universe will reward you for it with cash. I think you're projecting his mind, which endlessly tracks sales and feels gipped, onto the average gamer who looks at a price and vaguely says, day of sale, "looks like the fun is now worth not eating sushi today."

Minecraft didn't have an "increasing price model," the game got better and started costing more. With Castle Doctrine, it's like you're trying to say to the world: "Look! My game is fun, I can prove it by the fact that the price will go up!" But you're just raising the price.

You should sell your game at a price that will allow the right size of community to grow, and for the game to be fun. For the entire life of your game. The rest is just PR: Do you want people to think you planned a price increase when it takes off, or can you bill your initial price as a "discount"?

Christopher Abreu
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The problem with your game is that it didn't have controller support which would have made it more fun.

Tobiah Marks
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Even if you make a solid argument as to why it is better for players not to have sales (which, you do make solid points), it doesn't matter. Players want sales.

Just look at what happened to JC Penny's when they did the "Fair and Square" pricing. On paper, you can easily argue that it was "better" for the consumer. In practice, everybody hated it. Not just JC Penny's profit margin, but the customers hated it too.

People want to feel like they're getting a deal. People like "hunting" for games. It's just our nature.

I wrote a blog explaining my thoughts here: http://www.tobiahmarks.com/2014/01/rohrer-says-rampant-sales-are-
bad-players/

Jonathan Jones
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I think it's a great post, and a very useful insight for other indies. Although I think one thing that Jason might be overlooking is that The Castle Doctrine is competing with a TON of other games out there (not just commercially but in "mindshare" to use a trite business term, as well), and that's an important consideration to keep in mind.

What I'm trying to say is, people might be waiting for sales, because they already have a huge list of games that they're hoping to get to play, or they know that it will sit on their virtual Shelf of Shame before they'll have time to even install it. So they stick it on their wishlist and wait for a sale, just to assure they'll be able to play it at some point in the future. I'm not talking about hoarders, just normal people who maybe are keeping tabs on a ton of other games and platforms.

For die hard "Jason Rohrer fans" it's not really an issue so much as you'd think, perhaps. They'll be looking forward to The Castle Doctrine or anything else that has his name stamped on it and while they're not "happy" to pay more, they want to be a part of the Jason Rohrer conversation, and I think for them that's probably enough. It's not fair to the fans yes, but, like "early adopters" of technology, I don't think they end up feeling that burned, when all is said and done. In fact, they probably feel it's a good thing to give the developer more money.

I agree, constant sales are a bad thing, though, especially if the potential customer realizes it's happening, but it is undeniable that sales in general are effective because it taps into that element of human nature that makes us feel good when we felt we got "a good deal".

All that being said, I think the Minecraft pricing model is a good way for Rohrer to go, and for other Indies who have made names for themselves as well.


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