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 World Of Goo  'Pay What You Want' Experiment A 'Huge Success'
World Of Goo 'Pay What You Want' Experiment A 'Huge Success'
October 20, 2009 | By Kris Graft

October 20, 2009 | By Kris Graft
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For the one-year anniversary of 2D Boy's World of Goo, the studio held a pricing experiment that had customers paying whatever price they wanted for the game -- and the results are revealing.

In a blog post this week, 2D Boy's Ron Carmel said there was a definite discrepancy between what people thought the game was worth, and what they were willing to pay for it.

"Few people chose their price based on the perceived value of the game," Carmel wrote. "How much the person feels they can afford seems to play a much larger role in the decision than how much the game is worth."

Out of about 2,300 people who took part in a post-purchase poll, when asked "Why did you choose that amount?", only 5.4 percent answered "That's what the game is worth to me." But 22.7 percent answered, "That's all I can afford right now."

In all, Carmel said that the "Pay-What-You-Want" birthday experiment was a "huge success," drumming up total unit sales of 57,000 through 2D Boy's website. The reception was so strong that Carmel said 2D Boy would extend the "experiment" until October 25.

So what prices were people willing to pay for charming physics-based puzzler World of Goo? The average price paid was $2.03, Carmel said. Most purchases, about 17,000, were made at the 1 cent mark. The second-largest pricing category was $1-$1.99 with nearly 16,000 buys. The game, a 2008 multi-award winner at the Independent Games Festival, normally retails on 2D Boy's website for $20.

According to graphs released by 2D Boy, customers paid anywhere in the range of 1 cent to $50 -- the studio sold four copies of World of Goo at $50 during the week. Carmel said that the average selling price went up in the opening days of the program before eventually leveling off by day five.

Carmel attributed the wide press coverage about the World of Goo "Pay-What-You-Want" experiment for its success. In the wake of that coverage, sales of the game -- "shockingly," according to Carmel -- rose dramatically on Valve Software's Steam digital distribution store.

"Steam sales rose 40 percent relative to the previous week," he said. "Our Steam sales tend to fluctuate, and it’s not unheard of for there to be a 25 percent difference from one week to the next (up or down), but the 40 percent increase came after a week that saw a 25 percent increase. It has been several months since we’ve seen this number of sales in a single week on Steam."

World of Goo is also available on WiiWare, where sales of the game rose 9 percent week-on-week. "Nine percent seems like it’s large enough to have not been entirely caused by normal fluctuations," Carmel said.

[UPDATE: Carmel additionally told Gamasutra that he's not certain yet how this experiment's data is applicable to a real-world business model outside of limited-time promotions. But the wheels are turning.

"I do get a sense ... that there is a lot of room for improvement in how games, and in fact, all digital products, are priced," he said in an email. "I think the optimal pricing strategy for any digital product is one in which every person pays what they feel is a fair price that they can afford, based on their economic situation, their perception of the value of the product, the balance of their bank account on that particular day, etc."

"If a strategy that yields this result can be devised, I think the product creators would make more money AND people would feel better about their purchase (the latter being something that companies like Apple realize is extremely important)."

Carmel added, "Neither fixed pricing nor pay-what-you-want even come close to achieving this, however. The answer is elsewhere, but this was our first step in exploring alternative pricing models, not sure what our next step might be yet."]


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Comments


David Delanty
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Five minutes. I've been trying for the last five minutes to come up with a clever 'Flexible Prices / Goo Physics' word play to make a witty colorful comment to brighten the bottom of the article, and I'm coming up with nothing. Absolutely nothing.



Any help, gents?



Also, I hope this experiment revolutionizes the way people market and purchase games. I foresee the success of this venture being done again in several different avenues. I see a lot of financial institutions making fiscal transactions on a 'per person' basis, creating budget systems particular for each consumer. Maybe mass media like games and movies can follow suit. Considering we're in the digital download age, where the only tangible capital is bandwidth, we can take advantage of the current (some-what recovering but not quite) economy by having gamers decide their own prices for games.



Radical, I know. But if it worked for 2dboy...

Glenn Storm
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This experiment is awesome.



@David : "Goo ahead and pay what you want" ?

E Zachary Knight
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This reminds me of the Radiohead Experiment. They did the Pay what you want model for one of their albums and by most accounts it was relatively successful. But they never released any hard numbers.



Trent Reznor from NIN posted some comments about music and selling as an indie and here are his thoughts on this model:

-----------

Pay-what-you-want model

This is where you offer tracks or albums for a user-determined price. I hate this concept, and here's why.

Some have argued that giving music away free devalues music. I disagree. Asking people what they think music is worth devalues music. Don't believe me? Write and record something you really believe is great and release it to the public as a "pay-what-you-think-it's-worth" model and then let's talk. Read a BB entry from a "fan" rationalizing why your whole album is worth 50 cents because he only likes 5 songs on it. Trust me on this one - you will be disappointed, disheartened and find yourself resenting a faction of your audience. This is your art! This is your life! It has a value and you the artist are not putting that power in the hands of the audience - doing so creates a dangerous perception issue. If the FEE you are charging is zero, you are not empowering the fan to say this is only worth an insultingly low monetary value. Don't be misled by Radiohead's In Rainbows stunt. That works one time for one band once - and you are not Radiohead.

------------------



I think that 2d Boy had as much success doing this because they had that name recognition they needed to succeed. It also helped because it was a limited time offer. A sale.



I agree with Trent that this model is not one that would succeed as a primary payment model.

Adam Bishop
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@Andre



The only thing I think it tells us about pricing is that people like to get things for [next to] free. It doesn't tell us anything about price points for big budget games. It's also not at all clear that this experiment would have increased sales (and certainly not revenues) when the game was new. 2D Boy were able to do this precisely *because* the full price game has done so well for them.

Jesse Manning
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As a consumer I love the idea of "pay what you want" and I applaud these devs for trying it. However based on the numbers I see in the article I can't imagine the people that created the game aren't a little disappointed. Of course they can't say that with public opinion and such, so they put a nice spin on it.



Most people bought the game for 1 cent. That is atrocious and signals to me that people really don't want to pay anything for the hard work of others. All the talk is usually about publishers and devs being greedy (which I side with sometimes), but this experiment says the same about consumers. Even if they did sell a lot more in a short period of time it is going to be almost impossible to sell enough at the 1 cent mark to make up for the price difference. And whose to say that this experiment has any correlation to dropping a $60 game to $25. Try doing the "pay what you want" with a $60 game and I expect the numbers will look similar (most getting it for as close to free as possible). Also most of the people cited their price with "thats all I can afford" which I find hard to believe that 1 cent is all that most can afford. Bottom line based on the numbers in this article good games and good developers will cease to exist if consumers were allowed to "pay what they want" all the time.



Programming and game development in particular is not easy, if it was everyone and their mother would have a game out. We as consumers should be rewarding developers that produce a quality product and the developers gave us that chance by asking how much we want to pay. Based on the numbers I see in the article I say we blew the opportunity.

Daniel Baulig
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Isn't the really interesting thing, that most people claim to can't afford anymore? Especially games, that tend to be directed to a younger audience might be able to boost sales by a significant amount by adjusting their prices down to the gap where more kids can actually afford the game.

Robert Casey
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I also take note the influence that Steam had on the game's ability to sell. I bought a game on Steam just this weekend because it advertised in a not so obnoxious way and got my attention. Ads and sales channels through the game experience pipeline seems to be a good way to go, but it has to not interfere with the game experience itself (e.g. no in-game ads).

Wyatt Epp
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I'd rather like to see how the numbers on OS use stack up against this. We had a thread over on the Phoronix forums about this sale, and it seemed that most of the people there were in the $10-$15 range... I'd be rather amused to find that the average Linux or Mac user will pay more for good games (even as I acknowledge that, at least in the West, we're in the minority by far).

David Wesley
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This form of distribution is not new (see my blog post titled "Nine Inch Nails in a Fundamental Revision of Marketing Paradigms" that discusses the efforts of the popular music group to distribute its albums for free). The issue is not whether the strategy works, but in what context. Those who are buying the game are not the same as those who are downloading it from file sharing sites.



Developers need to recognize several points:



1. Piracy is almost impossible to thwart through DRM.

2. DRM can make products more difficult to use for legitimate customers.

3. Some pirated games that have DRM stripped are better than official versions (making them more attractive to download from file sharing sites).

4. Many people will pay for something even though they can get it for free.

Samuel Wissler
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I'm surprised they are saying this was a success when the majority of people were paying less than a 10th of the game's listed price. All this showed is that when you give people the option of reducing the opportunity cost of a purchase to practically 0, they'll take advantage of it.



I have to agree with that NIN quote in that no amount of value in a product will inspire the majority of people to pay a fair price for it. I bought the game a while ago and I felt it was had a lot of value, but if I was being honest I would probably pay only 10-15 for it, which is still lower than it's worth.



I think this was a really interesting social experiment though, and thought provoking.

Samuel Wissler
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I really disagree with that Andre.



1. Developers should definitely be rewarded and even though we may not like it, $60 for a game is probably a more legitimate price than we'd like to admit considering the movie-like cost of production. Games generally have a smaller audience and have more requirements/expectations to fulfill than movies. It follows that the price is much higher as a result.



2. In many cases the DLC content would be free except for the console services which host the DLC force the developers to put a price on it. Much of the DLC you pay for is free on the PC.



3. 2DBoy was hardly a rip off artist seeing as their game was only $20 to begin with. I think this is a case where the entitlement, greed, recession, and a lack of appreciation for (imo) art runs riot in gamer culture and lets people feel free to exploit to their heart's content.

Jesse Manning
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@andre



That flawed piece of logic you speak of is capitalism. You produce a superior product to your competitor you are rewarded for it because people will pay the asking price.



The beauty of the system is you as a customer have the choice. If you think a game is overpriced you choose not to buy it and if enough people follow suit that developer will be forced to make a choice between lowering the price or going out of business. Just because you don't think a game is worth $60 doesn't mean the masses agree. If it is out of your price range you simply don't buy it and move on. Just because I want a nice sports car doesn't mean i am entitled to it. I cannot afford it so I do not own one, but there are people out there that can afford it and they are willing to pay the asking price. If there was no consumer for the asking price there would be no market.



No one is forcing you to spend $60 on a game. There are free alternative games, and you could create your own, or just choose to do something else with your time.

Adam Flutie
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I think this was a good way to get something out of the people that typically pirate games. I mean, even at .01 that was more than those people probably would have paid for it. Who actually would know how much they want to pay for something before they play it anyhow?



Also, this is much better than letting it retail lower and lower until you can't get anything at all for it. They made their upfront money, by doing this it jump started Steam and Wiiware again, and still made a little off a game everyone should have played by now. It's a better system than letting Game Stop pawn shop your game and you get nothing.



This is what I would like to see DL games become. Something the consumer wants that still benefits the dev studio very late in the the games lifespan.

Danny Pampel
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@Samuel



Sorry bud, but I'm with Andre, and not just coz my brother has the same name :)



I actually do vote with my wallet. I buy a lot of games, pretty much exclusively on my 360 as every other console is either gathering dust or I've got rid of it. Regardless, I have a number of games still in their shrink wrap because to be quite honest there are a lot of games out there that are not worth $60. I wait until these games are on sale on Amazon or until I can pick up a used copy on there for what I think it is worth.



Conan was a perfect example of that, I played the demo and liked it enough to want to play the entire game but no way was it worth full asking price. I think I eventually got it for around the $10 mark. I completed it the first day and enjoyed the game despite some of the flaws because I didn't pay full price. If I had paid full price I would have not been as happy. My most recent example is Call of Juarez: BIB which I paid around $35 new for. Playing through the game (haven't finished it yet) so far I'm not sure if I got my money's worth, feels more of a $20 game to me.



When I was more involved with the PC side of things, game prices used to drop really quickly if a game wasn't a AAA title but more than that, the original price wasn't that of a AAA title. Have worked at smaller developers and very large publishers, I really dislike console pricing. A good percentage of titles are way over priced, it is the reason that ebay/gamestop have gained such a foothold in my mind.



I don't think anyone "deserves" anything. If you've made a great game people will usually buy it, but just because you worked hard does not mean it "deserves" to be a success.

Chris Dunson
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I have to say sales like this are quite enticing. While I've played World of Goo before and liked it I never had any intention of purchasing it due to the price. With the pay-as-you-want model I have no problem playing $1 for this quirky game. Though I highly believe the game is worth more then that I just can't see myself purchasing it at full price within a few years time frame. Thus while the game was sold cheaper then its worth you gotta admit getting $1 from me must be better then me not purchasing it at all.

Alexander Bruce
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I'm not sure how anyone can look at this sale as being anything other than a success. You can't just focus on the people who paid 1 cent. I don't even think piracy is a valid argument here. There are many people who, like myself, knew about the game, but would have never purchased it, nor would have pirated the game. They may have wanted the game, or been interested in trying it some day, but simply never got around to doing it. I don't generally buy a lot of games at full price, and if I do, it's purely at launch because it's something I really wanted.



As a result of this sale, however, I was enticed by the fact that it was available (on their site) for whatever I wanted. I was going to pay $1, I told a lot of people about the sale, and after some rethinking, I paid $5. That's $5 that they would have never received from me, even if they had the game for sale for $5. People I told (who also told more people) also went off and bought the game. Many paid 1 cent, many others paid several dollars. Either way, none of these people would have owned the game, even though they could have just as easily pirated it.



If you go through their survey comments, you can also see people admitting that they had bought it for $0.01 initially, but had since gone back to buy it again for something reasonable. Essentially removing the issue of "how do I know what the game is worth before I've played it?". They knew exactly what it was worth, as they'd finished it, and then donated based on how much they enjoyed it. I told some of my friends about the game, they were like "nah not interested", and I even suggested paying 1 cent and then paying more if they liked it, and some of them were like "oh yeah good idea... but I'll pay $1". This kind of sale was all about getting in the people who were never going to buy it in the first place.

Scott Edgar
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This promotion was good for 2D boy.



After a games sales start declining a drop in retail price is almost always a good option. It almost forces the people that did not get this game to try it out. This drop may have been a bit too drastic, but 2D boy got a lot more out of this promotion than a mostly small amount of money.



For one I think it is important for a relatively unknown developer to get there name out there. For every game that is "purchased" that is one more potential fan that could buy their next game on day one for full price. A reasonable exchange for a small loss in money IMO.

Peter Young
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Andre's comment is a perfect example of how little the typical consumer understands true pricing mechanics. In summary:



1. Lower price does not guarantee higher sales. There are lots of factors that can lead the majority (> 50%) of consumers to purchase at a higher price while feeling good about it, and a lot of those factors are under the seller's control.



2. More sales does not guarantee higher profit. Using the numbers from this experiment, 2D Boy only needed 9 sales at regular price to BEAT the profits from those 17,000 sales @ $0.01. Anyone with a good understanding of the sales channels could find those 9 customers, easy... And probably a lot more.



Pricing is probably one of the most misunderstood topics in this business, as it's much, much more complex than most people (even developers) realize. Those interested in educating themselves further should check out the books Harvard Business Review on Pricing and Predictably Irrational. The basic gist of things is that while all consumers see themselves as rational spenders, the statistics clearly show that the vast majority of us are not.

Andrei Dumitrescu
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And coming from the angle of behavioral economics I think that 2D Boy would have gotten a higher price for World of Goo if it has put the question "How much do you think the game is worth to you?" to all those interested before they actually made the purchase. The idea is that if you declare a value to yourself and an outside source you are more likely to work towards it when actively making the purchase.

Samuel Wissler
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@Danny



No problem pal.



Unfortunately, you didn't really address any of my points. All you said was that in your opinion some games aren't worth the asking price. While it's definitely true that many games aren't $60 good, it doesn't defend paying less for games that *are* worth the asking price, which is what I was driving at.



It also doesn't excuse saying that if a game is worth $60 to you, that the developer doesn't deserve to get their $60 when you get the game. What I'm trying to say is the system isn't as broken or as villainous as you make it out to be. In your own example you show how you wait for price drops and pay less for games that aren't worth $60 to you. It just seems to me that you're either impatient at how slow the price drops happen, or unhappy that you can't buy more games.

Shaun Greene
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Digitally distributed items throw a real stick in to the wheel of classic economic thinking. The whole idea of supply vs demand is thrown for a whirl when you have nigh infinite supply.

Nabil Maynard
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People who are stuck on the 17,000 people who paid $.01 are missing the averaged cost across all 57,000 purchases in their surveyed window: $2.03. For an indie developer who already recouped the cost of development, $115,000+ in 5 days would definitely count as a success, and go a long way towards helping fund their next project.



$115,000 may be a drop in the bucket for some AAA mainstream developers, but we're not talking about them, are we?

Danny Pampel
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@Samuel



Sorry man, wasn't trying to avoid anything, I was just adding my 2 cents to what I think games are worth and how I don't like current pricing models for consoles (I actually think PC pricing is much more reasonable).



I would actually prefer buying direct from a developer and would love to be able to buy brand new games for my console the day they launch and download them. I'd love for developer x to get 70% of my money and the host to get 30% as in the Apple model. I have even been known to buy a game a full price just because I want to support a developer. Anyway, back to your points:



1. Developers should definitely be rewarded and even though we may not like it, $60 for a game is probably a more legitimate price than we'd like to admit considering the movie-like cost of production.



Have to strongly, strongly disagree with this. You do realize that most of the $60 is going to the publisher and the distributor, right? The developer is seeing a pittance of that $60. That's why I'd love to buy direct from the dev (I buy XBL titles because of this) as they're the ones that should be rewarded, not Gamestop, Amazon, or the publisher. I haven't been around that side of the business for years but the ratio is not in favor of the developer 99% of the time.



2. In many cases the DLC content would be free except for the console services which host the DLC force the developers to put a price on it. Much of the DLC you pay for is free on the PC.



I agree here, I hate how Microsoft have put prices on DLC (according to Epic etc) that in the PC world we get for free.



3. 2DBoy was hardly a rip off artist seeing as their game was only $20 to begin with. I think this is a case where the entitlement, greed, recession, and a lack of appreciation for (imo) art runs riot in gamer culture and lets people feel free to exploit to their heart's content.



No arguments from me on this point.

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