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.”

@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? ;)

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.

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 …

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.
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People aren’t going to start buying flash games, they don’t consider them, ‘real games’ to begin with – sorry.
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If this post isn’t about flash games, then ignore everything i just said.

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.

http://video.google.com/videoplay?docid=-3755718939216161559

And it makes sense. Nice article…

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

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.

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…)