Price Means Nothing

This is pretty different compared to the post about how to make games free to play, and I wrote this post last week before seeing any entries to that post (in case you missed the post, it might be a good idea to check out the post).

Now I want to state one point into this price discussion.

I’m about 107% certain that in the end, price means nothing if you really want something. Some time ago, I wanted an Apple’s laptop. I checked the price that went around 1000+ euros or something. My brain started giving me reasons why I really need that thing. After a long sales speech (so to speak) made by the right side of my brain, the left side of my brain pointed out that I really wanted the thing to (1) surf a bit and (2) do iPhone games with that laptop – all the rest is just sales talk crap. Both of those two things aren’t relevant right now.

The right side of my brain wasn’t convinced and started coming up with more reasons to buy a Mac… but in the end I decided not to buy the thing.

Price wasn’t an issue. I realized that the reason I didn’t put 1000+ euros wasn’t the price. It was that fact that deep down I really didn’t want the thing enough.

If I would have wanted (not really needed, but wanted) to buy the Mac, I would have found a way.

Some gamers keep saying how games are too expensive. That’s like the oldest phenomenon in the world of trading. Of course people want things cheaper (to a point). If you could have a 20,000 eur car by paying only 15,000 eur – you’d choose the latter one if you would have to pick either 20k or 15k to pay. You would gladly pay 10% less for a new iPhone. Or 20%, or 50% less. You’d gladly double your own money, or halve all your costs.

If you would get a magic coupon that would halve the costs of everything you buy, you’d take the coupon.

That’s natural. People want things that are good for them. If games would be cheaper, we could buy more of them.

But… people still say and do different things. People pay loads of money for things like ice cream. They buy expensive shoes (that they don’t wear). People buy stupid useless trash that it’s piled in their closets (At least I do).

The bottom line is that if people really want something, then the price isn’t the problem. If people think that the price is the problem, then they really don’t want the product enough.

At that point, the problem isn’t the price. The challenge is to get people to want that product.

Thoughts?

11 thoughts on “Price Means Nothing

  1. Brian 'Psychochild' Green

    You’re right. Pricing psychology is a very odd thing, and people do a lot of work to convince themselves that they aren’t wasting money. My favorite example is when people say that the $10.95/month for Meridian 59 is “almost the same amount” as $14.95 for other games. That’s some interesting math there. It’s also funny how people don’t consider things like paying for expansions as part of the price of buying a game.

    I think another important part of price is comparison. Apple is in an interesting position because they control the hardware for Macs. So, there aren’t other companies competing with Macs like there are for PCs. If you want a Mac, Apple sets the price and you pay it or you don’t.

    There’s also what is considered “standard”. Someone on another blog said that MMO subscription prices are dominated by WoW. The funny thing is that subscriptions used to be around $10/month instead of $15. If memory serves right, it was Anarchy Online that raised the price and lead to the slow creep up to $15. Charging more than the standard is hard to do since people need too see it as significantly better. Charging less can help, but as I point out above funny math skills can justify quite a bit.

    And, as Carrasco points out, comparison is important. For many Americans, $15 is pretty insignificant. So, saving $4 doesn’t seem like a big deal to many to play another game. If the average monthly price for MMOs was much higher, I think we’d see a lot more people eager to save 33% off their bill.

    Finally, games are interesting since there isn’t much variety in price. It’s rare to have a “premium” game that costs more for doing more. There are some games that just aren’t perceived as valuable, such as Flash games as mentioned in a previous comment. I’ve played Flash games that are better than some commercial games, but it’s hard too get people to actually pull out the wallet for them.

    Not an easy nut to crack. So, I wouldn’t say price means nothing, but it’s not always as simple as “cheaper = more customers.”

    Reply
  2. Juuso Post author

    @psycho – price is too high when you don’t want the product enough…

    @Carrasco: good point: I do agree on this matter.

    @Rui: :)

    @Jörgen: indeed, indeed…

    @edobaka: thanks for the link. good video!

    @phu: It’s part of the issue, but the main thing is whether you want the stuff enough. I think if you’d want Apple enough… you’d buy the $1500 piece. Well, who knows…

    @Dom: Of course things like competitors and stuff affect… but I’m pretty convinced that emotions are really the key things that make decicions. Then we justify with reason.

    @Bob: Perhaps you could consider working more or alternative payment model (like skip some $6.99 games) to buy some $50 game… if you really wanted? ;)

    Reply
  3. Bob

    Sure, in theory, if you could make me want a game as much as I want to avoid homelessness, I might pay as much for that game as I pay in rent. But that’s a mirage — I have price points mentally assigned to the role games play in my life.

    I’m into casual hidden object/adventure games. Typically, I can complete the games I like in an evening, and often don’t replay them. The US$6.99 I pay at Big Fish Games is a good price for an evening’s entertainment, considering the risk that I may not like the game. I’ve paid the US$19.95 that’s the typical list price on a few occasions. I suppose that I’d come up with about $30 for a game that I could be pretty sure I’d really love. $40? Perhaps, for a game I was sure I would love and had HUGE replay value. $50? No — that’s too much for the need to be entertained for me. Even if I REALLY wanted a particular title (a “Serpent of Isis” sequel, for example), there’s no way a vendor could create desire as strong as my desire for rent, groceries, and avoiding credit problems.

    Reply
  4. Dom

    I am not sure if the “emotion makes the decision” is omni-valid. If you need tools or other ingredients for production and if they cost too much to make the product affordable for a bigger audience, then less products will be build (smaller audience).

    If your 3d engine costs a lot, then you can’t offer solutions for a certain budget range. And limited budgets they have. Just imagine the high-tech 3D engine you really want to have! ;P

    It’s not all about premium markets. Both are valid strategies (premiums vs mass) – especially premium for early adopter until production costs become less due tech advancements.

    Just look at the interactive/real-time 3D market …

    Reply
  5. Mario Gonzalez

    Flash games should be free.
    Flash games will never survive a pay model, they can’t, people are too used to not paying for them.

    What we expect for free (as a society) grows over time.

    - Previously you used to expect to have to pay for an email program, now you dont.
    - Previously you had to pay good money for a word processing app, now you can use a web version for free and it works plenty well.
    - To get news you used to have to buy the paper, now you get way more news than that for free
    - Domestic phone calls used to cost money, now they don’t.
    —-

    People aren’t going to start buying flash games, they don’t consider them, ‘real games’ to begin with – sorry.

    If this post isn’t about flash games, then ignore everything i just said.

    Reply
  6. phu

    Not on board with this one. I want an Apple laptop too… to put Gentoo on (I loathe Apple and OS X)… and if a MacBook Pro sold around $500 instead of $1500, I would already have it next to me, compiling away happily.

    Yes, people can use price as an excuse — but to say that it’s never or even rarely part or all of the reason misses the fact that currency really is a scarcity for about 95% of us. I’d really love to have a Wrangler in addition to my GTI; I don’t because I can’t afford two cars (hell, I can barely afford one).

    Price is definitely important; I suggest you review the recent “race to the bottom” as far as the iPhone app store (funny, another instance of Apple involving ridiculous economics). Consumers may love $1 games, but developers have an EXTREMELY slim chance of making any reasonable kind of money at such a pathetic price point: Not only does price mean something, it’s critical when you consider that the consumer isn’t the only one it affects.

    But to your point, from the consumer’s point of view… if Windows cost $5 instead of whatever moronic fee they actually charge, I know for a fact that at least some people who currently pirate it would actually purchase a license. If Lamborghinis cost $20,000, you’d see a lot more of them on the road. Yes, there are many factors — but price certainly is a valid and common consideration.

    Reply
  7. Jörgen

    Yes, I think you are onto something. This matter seems connected to the basic needs we have (sleep, food etc). If we can make games that is as important as food for the gamers, we will be zillionairs!

    The real question is; how do we create the need?

    Reply
  8. Rui Ferreira

    Hi,

    I’m an iPhone developer and the interesting bit is that I actually bought a Mac because I REALLY wanted it. Curiously enough the reasons behind it were exactly the ones you give, mostly I think I’ve followed through on that developing thing but most of all my turning point was my utter despise of Windows and with the welcoming of the Mac world the deep impact on my computational efforts were changed mid-night. Mac is Amazing and it pays itself with less headaches solving system issues, its actually a pleasure every time and I’ve never got into what psychologists say is the Adaptation Phase, so Apple is a freak show in this regards, you are just wowed constantly and with this you can say it provides an additional service beyond the call of duty.

    I think people but because they want, because if not, if money DID matter you would not have the tremendous amount of people out there with credit cards busting out of their wallets.

    Reply
  9. Carrasco

    I’m Brazilian, and at least in my country, games are too expensive for most people. Here, our local currency is Reals (R$). We tend to treat salary as multiples of a “minimum salary” that the Brazilian goverment defines. So, we say that someone earn two salaries, and so on. (I don’t know if another countries do this as well)

    A minimum salary is R$ 465. The great majority of the Brazilians earn one or two (R$ 930) salaries. And a new game cost about R$200. An older game re-released cost about R$40.

    Now, add the fact that most brazilians pay rent for their homes, and that this rent is about R$200, and you will notive that a new game cost a month of rent.

    The old games normally are games wich have at least four years since it’s realease. They cost little less than 10% of average monthly income, what I think that still pricey, but that can be bought once in a while.

    Also, those extremely cheap $9.9 games cost about R$20. I think that this price is good, but mostly games charges much more.

    (hey, excuse me for my terrible English…)

    Reply
  10. psycho

    Yeah, I mostly agree. The price is only problem when it’s too high. For example I really wanted to buy a projector, but I couldn’t decide because they were so expensive (however if you calculate $$$/hour, it’s pretty cheap- I did buy it in the end).

    “If games would be cheaper, we could buy more of them.” – …from competitors. ;)
    Maybe you’ve got a point here. Maybe the sellers should give you a better price for their new game, if you already have 3 games from them.

    Reply

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