Today we have a special treat: Jeff Vogel is providing a guest editorial on game pricing. Vogel is the founder, CEO, and primary developer of Spiderweb Software – a company that was making ‘old school’ RPGs before it was hip to do so, and from the very start using the ‘shareware’ model of a generous demo with paid unlocking that we see so often now under the guise of ‘in-app purchases’. Many of the games Mac & PC RPG fans love now – such as “Eschalon Book 1 & 2” from Basilisk Games, “Depths of Peril” and “Din’s Curse” from Soldak Entertainment, and “Frayed Knights” from Rampant Games – come from people who were inspired by some extent by the dedicated efforts and loyal fans of Jeff Vogel and Spiderweb Games … and that they saw it was possible to actually make a living doing what you love.
I wanted to set up some context for the discussion, but to keep the focus on what Jeff has to say, my introduction is in italics.
Just over two years ago, Apple marked the first anniversary of the iTunes App Store, and touted how they had over 21,000 apps while the DS and PSP had ~4,000 and ~700 respectively. While writing about this I said that Phil Schiller spouted “arrogance, hubris, and cluelessness when it came to serious portable gaming” … but also that “it is clear that Apple has changed the game completely around the content and pricing expectations for mobile phone games”.
At that point, there was just the iPhone and iPod Touch, and the games available were generally trivialities, ports from the DS or PSP or older PC games, or games from other mobile devices (often Pocket PC games such as Arvale). The point I was making at the time was that those games have already ‘earned their keep’, so it was OK to price them extremely low since the associated costs were those of porting, not development.
In that article I pointed to a series of blog articles about “Creating the Expectation of Insulting Cheapness” – then as now I start with the end because it is easier to work back to the beginning that way. The articles were written in the spring and summer of 2009 by Jeff Vogel, the head of Spiderweb Software. If that name or the company name sounds familiar, it is because I have written over 40 articles associated with Spiderweb in one way or another since joining Gear Diary in 2009. I wrote about pricing and deals, referenced the games in a variety of reviews and editorials about pricing and indie games. Last year I reviewed Avernum VI the final entry in that franchise. More recently I reviewed the Mac, PC and iPad versions of his latest game Avadon: The Black Fortress and even wrote about the hardcore PC gaming backlash over the pricing of the iPad version.
Recently I highlighted the annual Spiderweb Games sale, which came along with an explanation of why they were dropping prices across the board and adopting a standard pricing scheme … for now.
Here is a bit of information on the author:
Jeff Vogel is the founder of Spiderweb Software, a small company in Seattle that makes Indie fantasy role-playing games for Windows, Mac, and the iPad. Its next game, Avernum: Escape From the Pit, will be out for all three platforms in the next few months, unless he gets hit by a bus or something.
Now we are fortunate to have Jeff Vogel here to further discuss the dynamic world of pricing and video games!
You Can’t Have Every Game For a Dollar
by Jeff Vogel
I started writing Indie games for a living in 1995. A cute little company in my basement called Spiderweb Software, writing role-playing games with a teeny budget. This was a long time ago, and it gets longer all the time.
A lot has changed since then, enough things to give me an awe-inspiring list of tedious, “This is what things were like when I was young!” stories. I’ve been surprised a lot over the years. But the thing that amazes me the most is that we live in a world where it is possible to release a game for ten dollars (Or five dollars. Or three!) and get a ton of complaints about how expensive your game is.
The rise of iPhones and iPads as premiere platforms for gaming caught just about everyone by surprise. Tons of companies joined the gold rush, charging tiny prices for their games to build a user base. Some of them even got rich selling games for ninety-nine cents, which is a great trick if you can pull it off.
But things are changing. The platforms are starting to mature. Indie developers are creating all sorts of cool games for small, niche markets. For example, I just released one of the first old school hardcore role-playing games for the iPad, and it’s doing great. Selling for ten dollars. That’s right. The princely sum of ten whole dollars.
As you browse the app stores of the world, alongside the really cheap and free games, you are going to start seeing a lot of more expensive games sitting next to the cheap stuff. You might as well start hating it now. The purpose of this article is to explain why some games have to have actual prices that are actual money. You can complain about it. Hey, it’s a free country. Complain all you want. But you might also find out why developers pick the prices they do, and why they will often need to charge much more than a dollar to stay in business.
(Of course, you might point out that it is very self-serving for a developer who charges more for games to explain why it is OK to charge more for games. And you would be correct. That doesn’t mean that what I say is wrong.)
There Are Two Sorts Of Prices
There are two sorts of prices we developers figure can charge for a game: You can charge an amount of money that feels like money, or an amount of money that doesn’t. In other words, you can charge an amount of money that is so low that most people will feel like they aren’t spending anything, or an amount of money that makes you go, “Hmmm. Do I want to spend this?”
Where is the line? How much money feels like money? Well, in my own mind, I use what I call the Frappuccino Rule. A frappuccino is one of those super-sweet caffeinated milkshakes they sell at the many Starbucks that have infected our Earth. The rule is that the price for a large frappuccino is the maximum amount you can charge and have your customers not think twice about it. This means that, once your game is around five bucks, it feels like spending money. Three or less, than it doesn’t.
Within these two ranges (cheap and expensive), there isn’t a huge amount of difference. Your game will make pretty close to the same amount if you charge a dollar or two dollars. (At $2, you only need to sell half of the copies to make the same amount of money as if you charge $1. Not difficult.) Similarly, the difference between a game selling for $10 and $15 isn’t huge. But the thinking process that goes into deciding to spend $1 on a game versus spending $10 on a game is entirely different. Before people spend $10, they will think about it. At $1, they won’t.
So why would anyone ever charge $10? People just clicking a button and buying your game without thinking about it sounds pretty good. I love it when people give me money without thinking!!! Why would you ever do anything else?
The answer to this is that the sort of price you charge depends on the sort of product you are selling. This is why some developers have to charge more for a game, no matter how many complaints they receive.
Casual Versus Niche
Just as there are two sorts of prices, there are two sort of games.
First, there are the casual games. These are simple, cartoony, fun, cheap, disposable, and aimed at a wide audience. Not just gamers, but so-called ordinary people. Your grandparents, say. Think Bejeweled, or Angry Birds, or anything with cute zombies.
These are the titles that pioneered games for a dollar. They need a huge audience, and they are designed to appeal to the mass market. They want to make their money off of a million (or ten million) impulse buys. This is the sort of game that you will always be able to get cheap.
But then there are niche titles. Games for gamers, or games aimed at a smaller audience. Adventure games. Strategy games. Games like what I write: old school, low budget role-playing games. Games like this will never have a huge audience, and they aren’t trying for one. They are aimed to serve a small, dedicated audience.
Games like this have to charge an actual price. They just have to, if the developer wants to stay in business. Why? Because if I charge a dollar for one of my old school role-playing games, even if everyone who could possibly be interested buys one, I would go out of business. So I have to charge more. Games in this category will be five dollars minimum, possibly more, and if you complain that the price is too high, that is like saying, “I want you to go out of business to please me.”
Of course, in reality it’s a bit more complex than this. There is actually spectrum between casual and niche games, just as there is a wide range in the price you can actually pick. Also, I’m neglecting games that are free on the surface but charge you for goodies inside the game.
But the basic facts of the industry are this: Not every game should have to appeal to every person. So some games will aim for smaller, more focused audiences. So, to make a living selling to a smaller audience, you have to charge higher prices. If you don’t want every game to have cute fuzzy animals, don’t fight this process.
Hey, It’s a Free Country
Look. It is your money. You can spend it on what you want. If the free games and dollar games keep you happy, buy those. If you refuse to pay more than three bucks for a game, ever, that is your right.
But if you want there to be more games? If you want a vibrant, varied market for games on the iPhone and Android and whatever similar platforms emerge in the future? If you want games with more than just cute cartoon animals? Then the people who write those games need to make enough money to stay in business. And that means they have to charge more than a dollar. It’s pure math.
Somewhere out there, there is the perfect game for you. It’s not popular. It doesn’t have a huge following. But you will love it. It’s an exact match for your tastes and your brain, and it’s the dream game for a small, select group of people like you.
That game is five dollars. (Or maybe even more.) When you find it, I hope you pay the price. You will get your money’s worth, and you will help a small group of Indie developers to stay in business doing what they love. In this economy, that’s no small thing. I’m sorry it won’t be a dollar, but it will be pretty cheap.
And look at the bright side: At least your perfect game will exist.
So what are your thoughts on game pricing and what Jeff had to say? Chime in with your comments!