I don’t know what’s going on with game pricing… but to me it looks like games stuff is becoming sort of free

Humble Bundle 4 averages currently about $5.32 or so. That’s like 4 euros. It includes 7 games. That means price per game about $0,76. Iphone apps cost $0.99.

I… honestly don’t know if this is good or bad thing. And for whom.

The good news is that the volume increases: much more people can now enjoy many different games. At least that what happens short-term, and I think it’s pretty evident. If I can buy a gaming bundle with $5, then I can get 10 times more games compared to if I buy one $50 game.

This means that instead of one developer getting my $50, several different developers now get the sum. Or, that I simply can choose to spend just $5 in games and use my $45 to buy whatever stuff I might need. Like shoes. (Since it’s damn wet here in Finland. Where’s the damn snow?)

Anyway.

Short-term, it’s quite obvious that players win in this system. They want games, and if you look at the Humble Bundle games… those are quality. They are highly polished production values. They are good games.

What are the long term effects?

That depends on volume. If volume increases so much, that the end revenues are higher than what bigger prices would generate, then this would be win-win for all (except of course for other industries, like shoe industry who would not get the money) . If a developer sells 1000 games, $10 each and gains $10 000 – then it would require 10 000 games sold at price of $1 to reach the same revenue (I am simplifying and not taking into account cost per transactions). If developer can generate same amount of revenue with games that cost $1 rather than $10, then more people will be able to enjoy fun games. I’m not saying that this would happen, I’m just stating that if this would happen then all would be goo.

If on the other hand the developer doesn’t reach that amount, it means he must do something else. He could not buy shoes. He might need to do other stuff that pays and so on. It might mean that he simply cannot produce enough to survive and would end up leaving the industry.

If there are other developers who can survive with smaller amount of money, and can produce enough volume to survive – meaning people are willing to pay for his products – then those chaps would join the industry.

End result is… that this is basic rules of economy. It’s the survival of the fittest. It might mean that some stuff is never made again. It might mean some gaming studios disappear, and all that is left are Click the Cow facebook game.

I think this would be okay, if that’s what players want.

This might sound capitalistic talk, but I believe in the market system. If players are not willing to pay such amounts, and if developers cannot produce quality stuff… then it’s good that the unproductive (by productive I mean “those who develop quality & fun games”) developers are lost.

Alternative would be some sort of group tax paid by all, which would then be used to support various genres in the field. We all would pay N dollars, and these dollars would be directed by the government to produce games. That would be pretty communistic system.

Currently our capitalistic system ensures that players get most out of everything and that each player can decide what they support.

(I’m not saying that communism is bad and capitalism is good, just pointing out that if people can decide what they do with their money, then individuals decide. If money is paid from taxes, then group of people – democratically or not – somehow would decide which developer gets your tax dollar. There are certain places where I like communism style more than capitalism, but that’s not the topic of this blog post, so carry on.)

If players don’t wanna pay anything for indie games, then indie games will die. Sure, that might be sad, but it’s also okay. If players don’t wanna pay for AAA games, that industry dies. If players don’t spend money on Facebook games, then that industry dies. (Again here, I’m taking for granted that we support games industry mainly by so that gamers decide what they buy).

Whatever happens, I like the idea that gamers have the ultimate decisive power in their hands.

It is up to you which industry you support. And it’s the industry’s responsibility to be flexible and introduce different systems that help generate revenue (to help produce more fun to the players, that’s what they are paying for anyway).

If you support stuff like Humble Bundles, then those bundles will appear more. If you support AAA games, then more of those will happen. If you like Facebook games and spend money on them, then more of those games will happen.

If bundles won’t get enough money long-term, then those will disappear. Humble Bundle has sold $1.5M. If devs get about 70% (the default split), and each game is equal, then 1M is shared between 7 games – that’s about $140 000 per game. If that $140k (minus taxes, transaction fees, bandwidth, salaries, pizzas, company expenses and whatnot) is enough for the devs to keep bringing more, then this humble bundle is good thing – and more will happen, bringing more quality games.

Group control (like for example: “let’s collect taxes to support adventure games”) to my opinion would not be a step in better direction. If we force money to certain group via taxes, then some group gains and some loses, and we lose our decisive vote on where our moeny goes. For example, if you would need to spend $50 yearly to support adventure games, then you would not be able to choose to spend those $50 to support indie bundles or shoe industry or whatever. Taxes mean we’d do collective decision on what to support. I believe that players must have the choice.

If players aren’t willing to pay anything, for example every player would become pirate 100%, then it is up to the industry to stop producing anything anymore – or figure out how to gain money. If players are willing to pay little amounts, then it’s up to the developers to figure out how to make it profitable, or stop producing.

Either way, the end result is that.

I think players must be in control, but also responsible. By pirating everything and giving 0 dollars to producers, the pirates are essentially stating “stop making more games” (or “stop making stupid DRM”).

And at that point the ball is in the developers’ court. It’s now up to us to:

  • Simply stop making games. That would stop piratism. If people don’t wanna pay, then we can simply stop making games and all go into shoe industry.
  • Or we can try stop making games more convenient (re-think DRM for example)
  • Or we can think alternative price models (humble bundle, f2p, and so on)

I think it’s bit pointless to try argue if the current system is “good”. We are working in a gaming industry. We devs are providing fun (and other) stuff for players. And different market forces affect this, whether we want or not.

We can bitch about the system and try not to adjust and vanish.

Or we can be flexible and perhaps survive.

6 thoughts on “I don’t know what’s going on with game pricing… but to me it looks like games stuff is becoming sort of free

  1. Really nice article Juuso. Actually I am thinking that players would respect games more, and play them more, make videos about them if they payed more. This way some great games are skipped. Even the game isn’t that good, its price could intrigue player to see what is that all about. Even to look closer at screens. :)

  2. Instead of worrying about reviews and whether or not I’m making the right decision buying certain games or not, I wish I could just pay $100/mnth subscription fee to have access to any and all games.

  3. You’re forgetting one thing though. The games included in those humble bundles are (almost) never new games. They’re games that have already sold numerous copies when they were released and are now available for a much lower price for those that don’t have it yet.

    It’s not just lowering your price from 10$ to 1$. It’s lowering your price from 10$ to 1$ after your initial sales have gone down and you’ve already made some money.

    • True. Seeing free2play model raising its head, and seeing more bundles appearing I would be surprised if this bargain bin model would become more and more familiar.

  4. One direction for game revenue models is in-game adds. Someone’s already done that. Though it did create some murmurs among gamers, it will eventually be accepted and it could become mainstream. Advertising is a big business, so why not?

  5. My question is, do people really play all these games? At some point I think people will realize they don’t need so many games. And just stop buying, even if it was 1 cent.
    What does it mean as a developer? Is there a point in making a long epic game if the average player don’t play more than 2 hours a game?