Game Pricing, Look Out Below

I have always thought game prices have been too high, and I have put my money where my mouth is. At Dynamix, I pushed to have an entire line of casual products come out at the then unheard of price point of $19.95 instead of the industry standard of $40-50. When we first started the GarageGames Game download store, I advocated for, and won, a $14.95 price point. For the next six years I constantly advocated that we should blow away pricing friction and come out with some games at $1-3, as it was my belief that these rock bottom prices were inevitable.

Game prices are falling, and they won't go back up.

Game prices are falling, and they won't go back up.


There is an old saying that being too early is the same as being wrong, and I was way too early in all of these cases. Customers did not appreciate the $19.95 price point in 1997, instead thinking the games were probably not good (although they were great front line casual titles (like RC Racers, Mini Golf Mania, and Cool Pool), although the under $20 price point did eventually become the standard for boxed casual titles. There was not enough traffic to the GG store to justify the $14.95 price point, so we raised the price to $20, and saw increased revenue, if not greater unit sales. And, finally, GG just never got around to the $1 games, but we did set new industry pricing with the $100 Torque Game Engine.

One of the first successes in lower priced games came from XBLA, where Microsoft went out and did huge surveys of gamers, and found they would be much more receptive to downloading games at lower price points, so they came up with the $5, $10, and $15 price points (further disguised by using Gamer Points) seen today. Our Marble Blast Ultra was one of the first games in the store at a $10 price point, and it made us hundreds of thousands of dollars in revenue, so I finally felt vindicated for my years of lower price point pontification.

Now the flood gates have been opened, and I am telling you to look out below. Today Reflexive, recently acquired by Amazon, opened their new download store, with lowered front tier pricing of $9.99 and second tier pricing of $6.99 for Indie casual games. All of the other casual portals like Big Fish Games and Yahoo games have pricing of of $6.95 by joining their “clubs”. It is my belief that even these prices will not hold up over time.

As an example of the future, look at the game section of the iPhone App Store. In this market, the right price for a game is $0, and I believe that is where all game prices are heading. For a while, there will be successes at $3.99 to $1, but eventually, I think you will see capitulation to the $0 price point.

Why are games going to what many see as absurdly low price points? It is a simple answer. Supply and demand. It used to be difficult and expensive to make games, so few people had the knowledge to create a game, and even if you could figure out how to make a game, there were only a few distribution outlets. There was no Internet, so only a few games could be brought to the few shelves open to selling them. With relatively few games being made, and fewer being distributed via hard media, games were scarce, resulting in high price points.

Contrast that to today, with an uncountable number of inexpensive or free game engines and tools, game development schools and thousands of web sites that teach people how to make games resulting in tens of thousands of game developers and games competing in the market. I always compare game development to music, and I will again. People want to be in bands even though there is no exact way to make money, let alone make enough money to make a living. As proof, there are over four million bands on MySpace alone. In the future, I am sure there will be millions of games developers, and all of them will be putting downward pressure on price points.

This is already happening in the Flash game market, with even a cursory look showing Kongregate, a single Flash games portal, with over 11,000 free games on their site. These games are already fun, but watch for them to get more polished with more features as more sophisticated Flash development gets easier with tools like our upcoming Push Button Engine as well as the foundation of Flash itself getting better. As there are more and more games on the market, developers will have little chance if they do not keep up with bigger and better productions. These great, creative, free games will put tremendous downward price pressure on all other categories and distribution channels.

What about consoles, and big game publishers, and the $60 price points of AAA titles? In depth analysis of this market is another article, but suffice it to say that prices will come down on all of them. Of course, all of this will take time, but it will be an excruciating fall. All you have to do is watch what is going on in the music industry to get a feel for how it will play out. There will be fights, finger pointing, lawsuits, and tons of press while the incumbents attempt to hold onto old business models while thousands of new competitors ravage the old way of doing things.

How will you survive in a market with a $0 price point and millions of competitors? I have ideas, and I can’t say for sure, but I do know there will be no one way of succeeding. I’ll explore different strategies such as ad supported games, micro-transactions, etc. in future articles. Don’t get me wrong, if you are already an Indie with nothing to lose, and you are following my Foundational Five ways of running your company, you should be excited about the changes.

-Jeff Tunnell, Game Maker
Make It Big In Games
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  • aschearer

    I think there is something wrong with this thesis. Take the economic appeal to supply and demand. But let's look at this from the supply side. As the market becomes more competitive and the means to generating profit less clear can we really assume that new developers will enter the fray? Discounting the people who will do it for the love of it I think that this line of thought would generate some sort of equilibrium, and that the balance would have to stick somewhere greater than $0 in order to attract new developers. That is, at a certain price point the number of developers making games will go down thus impacting supply, at that point demand cannot fall further without undermining the consumer.

    Granted, this is the old way of thinking, and I suppose you'll counter with promises of productization and spin offs. Still, I think we need to wait and see how those strategies work for the music industry.

    • http://www.makeitbigingames.com Jeff Tunnell

      Alright, the first post is exactly what I expect to hear as an argument. The supply of developers will not stop. If the marginal price for music is $0, which it is, why are there four million bands on MySpace? People will not make games just for the money, they will be chasing a dream as well. Another article for this series is that $0 for your game does not mean that you don't make money in other ways for your game. There will be some games that make a “zillion” dollars from micro-transactions or some other method, and there will be enough of these hits to push the love of making games with an economic incentive.

      • aschearer

        Tried to do a trackback since this ended up being longer than a comment…

        In a nutshell I think that games will continue to sell for some price above $0 as long as there are consoles and other locked platforms. These create an excludable good which I think solves the problem facing the music industry. Anyhow, feel free to read more.

  • http://www.gameproducer.net Juuso

    Nice post Jeff.

    You are bit off-the-mark here though. We will be heading towards a pricing point where we actually PAY users to play the game… :)

    > “When we first started the GarageGames Game download store, I advocated for, and won, a $14.95 price point.”
    Gotta tease a bit, but did you actually test that price point – or was it won over by argumenting? ;)

    • http://www.makeitbigingames.com Jeff Tunnell

      We did put out our first batch of games at $14.95. We raised them to $19.95 about six months later. GarageGames simply did not have enough traffic to make the lower price point work. We didn't have enough games or critical mass to change the games market the way we changed the price point of game engines.

  • http://www.redthumbgames.com joshuadallman

    It's about damn time!!!

    A game dev team is not unlike a small band, and a single small game (Flash-sized) is not unlike a song, both in what it offers (a quick enjoyable replayable experience) and what it takes to create (a few people and a few months).

    Most casual games are more than Flash-sized / “song-sized” games, but they are also well short of being an “album” worth $20. With casual games it's like you get one song (one level / central game mechanic), then a bunch of “re-mixes” of that song (further levels with small variations, like a euro-mix variation of a song). So $10 is a great price point to go – more than a song, less than an album of unique songs.

    To go outside of gaming and compare to other forms of entertainment (a point we sometimes forget!), it seems like DVD's are at about that $10 price-point, and a casual game definitely doesn't have the production value and quality of a multimillion dollar Hollywood movie (even the indie movies are MM's), so it's a good price. Casual games at $20 are selling at a price higher than many Hollywood DVD's!

    The recession only underscores the need to price things at a point that is competitive with other things that consumers can do with their $10 as they'll be far more choosy how they spend their money now that they have less of it.

    Hard times force innovation. At $20 we've gotten lazy. The feeling of entitlement is high. Instead of feeling entitled to certain prices and profits, we should be bootstrapping and shooting for the best designed content (good game design does not cost money), best development practices (reducing inefficiencies saves money), and being more competitive with other forms of media entertainment and diversion.

    I see this price reduction as nothing but opportunity. Opportunity for new customers, broader reach, greater acceptance… heck, if casual game budgets have been spiraling out of control (following a parallel path to their AAA big budget counterparts, now up to $60 a game retail), maybe this will put a check on that, reducing budgets, which put indies more in the game and more competitive with the big studios.

    One last point, this one regarding global markets. The US is not the only country buying and playing games — ok, it's one of the biggest markets, but there's still a whole huge world of people out there, and casual games more than most are “games for everyone.” Consider that here in South Africa, the largest bill is 200 Rand, or $20. To put that into context, we were previously selling casual games at such a high price that you have to use the biggest bank note in South Africa to buy one. That's expensive. Maybe not to a US audience, but certainly to a South African audience, and to a global audience whose pockets are not as rich as American ones. Consider yet another side effect of the price drop is an increase in the adoption of the market to worldwide markets. 200 Rand can buy a lot of food here. It should be able to buy more than one downloaded Diner Dash.

    Bravo to Reflexive / Amazon for taking the leap!

    By the way, there's a great thread of discussion on this topic on the IndieGamer forums: http://forums.indiegamer.com/showthread.php?t=1

    Josh

    • http://www.makeitbigingames.com Jeff Tunnell

      I'm with you Josh. It takes 4-5 guys a year to make an “album” worth of music. Games are not much different. One big point here is that even when your game or album is complete, there is no guarantee it will sell. That is why you should not quit your day job.

      Just to be clear, Reflexive was actually one of the last to adopt this pricing structure. Yahoo Games, BFG, etc. already had it, but disguised as a “club” you could join.

  • Andrej Vojtas

    I definitely agree that 20$ for casual clones is not a good price.

    While supply and demand works this way, there are also other factors in play:
    in the casual space it's the portal price war started by BFG, while web games were always expected to be free.

    Still it doesn't mean every niche of the market is over-saturated. And indie games are very well suited to address a niche audience.

    $0 is not a syndrome in the book market, even with lower technology barrier to entry and a very very high supply and lots of free stuff to read created centuries ago.

    For certain kind of games (e.g. story based games) a flat price will be always the best way to make money.

  • jgostylo

    I always thought game prices were too high as well, but I thought that was because I was a cheap bastard.

    To pull some differences from starting a band with making a game, I think making a game is still much more difficult conceptually for most people. I agree that prices are going to $0 but I think that will be driven more by alternative revenue streams than oversupply where a band is the opposite. I think the difficulty of games lies in the idea of a finished product vs. a gig. In a band you can make some money relatively quickly along the way as you progress. With a game you have to finish the game. Most people see that last 75% of the work to be done and decide it's not worth it to put in the rest of the effort to see if it pans out.

    The second point I want to make is that I believe piracy is forcing this issue just as much as supply. World of Goo was reported to have something like a 25% purchase rate vs. full version games being played. It is already important to think of alternative revenue streams because the supply of your software is not controlled by you and counting on initial sales won't cut it. The real winners in this situation will be the ones that can give people what they want (games for free) and think of a different way to get money out of them.

    • http://www.makeitbigingames.com Jeff Tunnell

      You may be a musician yourself, and you are certainly entitled to your own opinion, but I have to disagree here. As a former professinal musician myself, and the father of a son that is currently attempting to make a living as a professional musician, I don't agree at all with your statement that it is conceptually easier to make a game than to make great music. I find that statement elitist and ill informed. It is kind of like saying it is easier to write a book than create a painting. Creating great music is every bit as hard as making a great game. It takes dedication, determination, guts, practice, and sacrifice. In fact, most of my observations of the game business come from comparisons of my experiences in the world of music and games.

      I agree with your observation about piracy. I think piracy is a straw man problem held up by big publishers that are in trouble and need to point fingers for their failures to reasons beyond their control. If you set up the correct business model there will be no such thing as piracy. You will want people to “pirate” your game in order to get them in to the paying parts of your game.

      • jgostylo

        I think you assumed something that I was not. I never said anything about making great music or even making a living playing music. There are 4 million bands on MySpace but how many of them make a living at it? I thought we were talking about the aggregate community. I am saying that the reason so many people make a band and have a go at it is because they can find small, fruitful, and closely spaced activities as a reward for their efforts. Very true that so few of them will make it big because that is really hard.

        I think the confusion was that my wording was off. I did not mean making a game is more conceptually difficult, but I think THE IDEA of making a game is. Most people don't get even rudimentary training with computer programming or
        design concepts when they do get some music training. I think it is hard for people to conceptualize what really goes into make a game because they have never seen a game get made. Many people still consider the computer to be a “magic” box when they innately understand the most basic concepts of musical instruments. And while being able to play an instrument is different than making money in a band, most people know someone who started a band while few know someone who tried making a game.

        Mastery of both requires exactly what you have stated but I am trying to say that most aspiring game developers get stopped at the door while 3.999 million MySpace bands spend years getting nowhere with dreams kept on life support by small gigs. I think that is because the idea that I can make a game is more conceptually difficult.

        My opinion is that it is easier to make a living making games than being a musician, but I still think more people believe they can be a musician than a game maker.

  • http://www.flashgamesretreat.com Leroy Frederick

    Very interesting post this one.

    I don't know if I fully agree with the movement though. I agree with a non fixed price point based on content, platform and delivery (ie less for dload version, smaller price for less content/game type etc).

    But I think some indie games/indie brands are underpriced and don't differentiate themselves from mass market flash/casual (and some core) games. A lot of pricing is perception and content. I mean while the iphone games are cheap (although now there doing a higher tier), that can certainly cannot be said for Apple's products and they get away with it via new ideas, content, delivery and unmatched execution. The perception is higher value. Everyone talks about pricing down, where are the indies where you actually say, 'whoa, that's expensive' or 'man, that's high priced', as I'm sure many say with about the Mac or iPod compared to it's cheaper/standard price competitors.

    I think there are types of indie (and AAA) games that can (and should be) like Apple, a higher price product that despite perhaps being available in cheaper forms/clones elsewhere, the customer sees value in paying more. I think this is a great opportunity to stand out in pricing and perception of product by NOT pricing down your (assuming it is) unique independent creation like every other portal/mass game producer and desperate indie out there currently is. Yes, even in this climate!

    Maybe I'm crazy, but it seems to work for Apple, fashion brands, Nike, AAA, Other independent goods providers etc. It's especially true in a show I watched about an expert helping independent store owners deal with supermarkets mass low pricing. 8 out of 10 times it was about perception and differentiating yourself from mass products that helped then gain more profit and customers, before they were shorthanding themselves and playing their game by pricing the same as them or offering the same mass amount of products as them (how many indies sites have I been to where it's hard to tell which games are theirs and which are the same c*ap I see on 100's of the same sort of sites).

    Maybe you just need to set the right perception regarding your brand and product, of course, you'll need a good product too.

    I don't really like the idea of $0 and we all go and starting charging via MMO methods alone, although I not opposed to new methods of getting paid for your work. That's not to say it's not happening…

    • http://www.makeitbigingames.com Jeff Tunnell

      I think you have a point here and do not disagree at all. If I understand your post, you are saying that one way to survive in this market of incredibly low priced games is to make some great games and establish your studio as a high end brand. That will be one way to be successful. This is definitely not an approach that will be available to everybody, but it is one method that will work. This is already happening with developers like Jonathan Blow, 2D Boy, Jenova Chen, etc. As a developer you can attempt to set your brand at the high end, but in the end you will have to create products that deliver on the promise, and users will have to agree. If you do achieve this status, you are golden, because people will look forward to, and seek out, your next games.

      • http://www.flashgamesretreat.com Leroy Frederick

        **Sorry, this is longer then intended :-)
        That precisely what I mean. A big part of the reason this price drop is happening is because a lot of games and game developers are becoming too monochrome (I could say the same for myself up until now). They look similar, they have the same sh*tload of other portals games on their site so you can't find their own games, they price the products the same as everyone else, they don't experiment with the status quo, they have same graphics style, they create average versions of games you can get on the shelf etc. Just too samey, not really independent (like those you mention above and below) other then the fact that they do most of the work themselves and bootstrap. In other words as Seth Godin would say, their unremarkable. In that respect unremarkable products should be commoditized and set at fixed/lower price I suppose.

        The audience of portals seem to take their games as a commodity rather then a luxury. When that happens (combined with an increase in volume of cooks in the kitchen) the value/price perception naturally drops. If you can get your product or brand to stand out as an unique piece of independent work (much like successful independent boutiques/store owners do), it doesn't matter how many supermarkets or similar genre products you have around you, you can still sell your brand of product at your set price (provided your customers believe in it as you said).

        It's just a shame that those products that deserve more or better may to be just put into the bunch because most people do what everyone else does rather then what is right or works. It's gonna take some balls and confidence in these times to price your game accordingly when everything else is telling you to give it away or price it the same as Amazon and the like.

        I believe some of my criticisms is true of myself also, so hopefully I can take some of my own and other's (like yourself) wise words and use them effectively, because I don't really want to be what I see as a commodity cog-wheel developer. Of course this is no criticism to those that do.

        • http://www.makeitbigingames.com Jeff Tunnell

          I am right there with you on this, Leroy. The eventual goal of Push Button Labs is to have out own portal filled with our own games that people are willing to buy from us at a higher price or at least conversion rate than we can get at generic portals. I will be writing blog posts about this in the future. Great observation!

          • http://www.flashgamesretreat.com Leroy Frederick

            Yeah, I got the sense that you guys were attempting to take web gaming to the web 2.0 so to speak so I'm looking forwarding to seeing what you guys come out with, especially considering that I moved to flash & a more web strategy myself about 6-8 months ago. Engine sounds interesting too (Box2D was a bit of a pain to get working for the game I have in development currently). I look forward to hearing/seeing more! :-)

  • http://www.flashgamesretreat.com Leroy Frederick

    Very interesting post this one.

    I don't know if I fully agree with the movement though. I agree with a non fixed price point based on content, platform and delivery (ie less for dload version, smaller price for less content/game type etc).

    But I think some indie games/indie brands are underpriced and don't differentiate themselves from mass market flash/casual (and some core) games. A lot of pricing is perception and content. I mean while the iphone games are cheap (although now there doing a higher tier), that can certainly cannot be said for Apple's products and they get away with it via new ideas, content, delivery and unmatched execution. The perception is higher value. Everyone talks about pricing down, where are the indies where you actually say, 'whoa, that's expensive' or 'man, that's high priced', as I'm sure many say with about the Mac or iPod compared to it's cheaper/standard price competitors.

    I think there are types of indie (and AAA) games that can (and should be) like Apple, a higher price product that despite perhaps being available in cheaper forms/clones elsewhere, the customer sees value in paying more. I think this is a great opportunity to stand out in pricing and perception of product by NOT pricing down your (assuming it is) unique independent creation like every other portal/mass game producer and desperate indie out there currently is. Yes, even in this climate!

    Maybe I'm crazy, but it seems to work for Apple, fashion brands, Nike, AAA, Other independent goods providers etc. It's especially true in a show I watched about an expert helping independent store owners deal with supermarkets mass low pricing. 8 out of 10 times it was about perception and differentiating yourself from mass products that helped then gain more profit and customers, before they were shorthanding themselves and playing their game by pricing the same as them or offering the same mass amount of products as them (how many indies sites have I been to where it's hard to tell which games are theirs and which are the same c*ap I see on 100's of the same sort of sites).

    Maybe you just need to set the right perception regarding your brand and product, of course, you'll need a good product too.

    I don't really like the idea of $0 and we all go and starting charging via MMO methods alone, although I not opposed to new methods of getting paid for your work. That's not to say it's not happening…

  • http://www.gamedevigner.com/ Paolo

    I think that one of the major points that are missing is that development teams will get smaller as more technology and better integrated development tools become available. IDEs like Flash, Torque and Unity already shrink the size of the development team by providing incredibly accessible tools at the onset.

    Even AAA titles like “Little Big Planet” had a relatively small team of 31 persons. And currently the artistic push is away from realism to more artistic expressionism in games and focus on gameplay. Games like “Aquaria” and. “World of Goo” were made with 2 people.

    The “garage band” of a small number of developers is become a more apt analogy because it is getting increasingly easier for a small number of people to create what used to take teams of people with highly specialized knowledge.

    What it comes down to in the end is that people will pay for quality work and entertainment.

    Game creation will become akin to being a street musician. There will be many onlookers who enjoy what you do but won't pay a cent. There will be many who will be generous and give some money for your performance – and may even pick up a CD that you published yourself.

    But the Internet is a much much bigger street with millions of onlookers. If you are able to garner their attention, even a few coins tossed your way could be work a lot to a small band.

    • http://www.makeitbigingames.com Jeff Tunnell

      Great post, but actually I don't think i missed the point of smaller teams using better technology and techniques to make better and better games. In fact, that was kind of my point for the entire article. I think a team of 2-3 great game developers using modern tools and augmented by a world wide system of contractors can beat the huge teams imprisoned in the halls of the big publishers. World of Goo, Flow, Braid, and Castle Crashers is just the start. Out of the millions of people that will want to make games, we will see superstars emerge, and, you are right, the few pennies a certain percentage of the world wide audience throws their way will make them rich and famous. This noticed fame and fortune will be a big driver of all those that love making games and hope that someday they can can money too.

      • http://www.gamedevigner.com/ Paolo

        Ah – what I gathered from this particular post was that the entry point for making games was getting lower and lower – not that a small number of people could viably compete with AAA-titles. You do make that point a lot in some of your other posts which is very inspiring to start-up indies like me.

        Though much can be blamed on the economy, I think it's another scapegoat (like piracy) for bad and unsustainable business models. Metal Gear Solid 4 had to sell on 50% of all PS3s within the first couple of days to make back it's production costs. I believe that Final Fantasy XIII is looking more and more like the arranging the chairs on the deck of the Titanic in terms of production cost versus profitability.

        I think that despite lower price points, in terms of profitability, small developers are killing the big companies not in sheer profit gross, but in profit margins. PopCapGames for instance is rolling in it while the big companies like EA are cutting jobs like crazy.

      • http://www.gamedevigner.com/ Paolo

        Ah – what I gathered from this particular post was that the entry point for making games was getting lower and lower – not that a small number of people could viably compete with AAA-titles. You do make that point a lot in some of your other posts which is very inspiring to start-up indies like me.

        Though much can be blamed on the economy, I think it's another scapegoat (like piracy) for bad and unsustainable business models. Metal Gear Solid 4 had to sell on 50% of all PS3s within the first couple of days to make back it's production costs. I believe that Final Fantasy XIII is looking more and more like the arranging the chairs on the deck of the Titanic in terms of production cost versus profitability.

        I think that despite lower price points, in terms of profitability, small developers are killing the big companies not in sheer profit gross, but in profit margins. PopCapGames for instance is rolling in it while the big companies like EA are cutting jobs like crazy.

  • Russell Carroll

    You make some good points here Jeff. I appreciated your thoughts.

    • http://www.makeitbigingames.com Jeff Tunnell

      Hey, Russ, nice to see you out here. I bet things are crazy for you getting things tied in at Amazon. I think you guys will be able to do a lot for Indies, and I look forward to seeing how this all plays out.

  • http://www.thestillofthenightcausesastorminthemind.com Jeremy Alessi

    All technology starts out sparse, expensive, and unpolished. I agree with your assessment. However, there will always be room for straight up paid games as long as we have money and a free market.

  • http://blog.IgenOukan.com Steven Egan

    There is a form of in-game advertising that could be a big deal, if done right. The idea is to look at your game and see if there is anyplace where you could make the game better with real things being used properly. Then, see if you can get some interest. John Deer isn't likely to be interested in an Indie Farming game, but Texas Instruments might be interested in product placement in a game where math is a big deal. Product placement is just the tip of the ice burg, however it needs to be worth it for the people you approach.

    This is not making games for others. This is not designing a game around a product. This is seeing how your design parallels reality, and asking if related companies would be interested in helping out. Maybe it isn't money. Research can be a great source of design ideas and direction.

    Obviously you would want to have something to show that you are serious and will do a good job.

  • EricPreisz

    I think the $0 price tag will be really powerful when PC prices drop more and the middle class of India and China grow some more. Advertising may be more valuable than the up-selling of premium services.

  • http://www.scarsofwargame.com Gareth Fouche

    Hmmm, I think this post probably applies to casual games, I haven't really got my finger on the pulse of that market, but from what I see it doesn't apply to another type of indie market and won't in the near future. The market for hardcore, under-served, ex-mainstream niches.

    Me, I hang around some fan sites built around old school, hardcore RPGs, it's what I'm making myself. The type of game that takes a long time to make, the ones that are so costly and time consuming to make that the mainstream is once again moving away from them (as they did a decade ago before Baldur's Gate revived the genre). On the sites I hang around there are large numbers of fanatical fans who sit twiddling their thumbs for 2-3 years at a stretch waiting for new titles and complaining about the drought. Then when one comes out, they finish them in 2 months and go back to waiting and complaining. The mainstream is always looking for bigger markets, when these niches don't have the numbers to support them they move on and it remains under-served. Similar niches exist for flight sims, wargames, etc. And I'm seeing indies start to move into those spaces to varying degrees.

    But I'm not seeing any evidence of those niches becoming saturated to the point of titles being so interchangeable as to be worth $0. These games are simply too costly to make. Tools can only help to some degree, the huge volume of things like writing and content creation means you can't just whip one up in 6 months easily. And you can't just reskin the old game and expect people to buy it, it would be like expecting people to buy a book when it becomes obvious you've just changed the names of the main characters. Like books, the “soul” that the author puts into it seems to be really important and not easily exchanged or shared across mass produced titles.

    I suppose they could end up that way, eventually, but I'd estimate that as being more than 20 years off, at least. And I believe it will be far more likely to become like books are today. Rather than everyone selling for $1, popular studios will sell for $20 and unpopular ones just won't sell.

    • http://www.makeitbigingames.com Jeff Tunnell

      sadf

    • http://www.makeitbigingames.com Jeff Tunnell

      I am sure it will apply to much more than casual games. Already I am seeing people convert from paying $15 per month to play WoW to playing free Korean games. I am not saying that free does not mean you won't make money. Freemium is a marketing method and a business model that is taking over the old ways of doing things. If you use the free version of your game to gather in players and then have a method of making money by having them willingly purchase items or access or whatever, you will still succeed.

      I do agree this process will take years. In the meantime, if you have a defensible niche that allows you to charge more for your products, that is great.

  • http://www.scarsofwargame.com Gareth Fouche

    Sure, I can see how it would work.

    I would argue that MMOs are more inclined to this direction though due to the pressures of their unique market. MMO makers in the west have run into a wall. MMOs aren't like single player games, you're asking people to pay hefty subscriptions. But these games are designed to waste lots of time, to maximize the time you spend subscribed. End result : People choose one or two MMOs to subscribe to at a time then do so for long periods. It's not like an 8 hour shooter where the same shooter customer might enjoy a new title every month if they can get it.

    And then you introduce WoW into the equation, the 400 pound gorilla, the game that has 11.5 million subscribers. New MMO makers are realizing that competing with WoW is very difficult, you can't just appeal to that segment with a similar game, you actually have to pull them out of WoW. MMO player's inclination to only pay for one MMO at a time combined with the presence of WoW means you have a real problem as a new MMO trying to “break in”.

    The freemium method cunningly counters that. Your game is free so people are more likely to try it, you can get them to play your game without forcing them to decide to give up WoW, which is otherwise a huge mental barrier.

    The key point I'm trying to make is that, in my opinion, this downward pressure isn't due to a huge supply of MMO titles like it is with casual match-3 games. There are only a handful of MMOs on many westerner's radars. The pressure comes from the subscription payment model which means that the opportunity cost of playing game X is that you have to decide to give up game Y.

    I don't know if that translates to single player games directly, they don't have that kind of barrier to overcome. You can make shooter games similar to last year's popular title and expect the same segment to purchase it, assuming it's good. Players can enjoy two games in a short period without having to choose between them. If two good story based RPGs come out in a month I'll buy them both, even though I'd never subscribe to 2 or 3 MMOs at the same time. I don't have to choose to sacrifice one for the other.

    Maybe if the market was so saturated with RPGs that I simply didn't have the time to play all of them it would hold, but we are a long, long way from that I reckon. It's not like casual match 3 games. And I don't believe that the MMO model shifting towards free is a sign of imminent conversion to freemium for most of the mainstream genres, it's more due to the problems of the MMO model that I talked about.

    I DO think we'll see the rise of micro-transactions as a way to enhance income for the mainstream. Not necessarily replacing the current model altogether though.

  • http://biasedvideogamerblog.wikidot.com/gamerreview Gamer Review

    The current market can't handle non AAA console games at $60. That's why Call of Duty World at War went down to $50 a few weeks after launch. The lower prices are also caused by the used game market where Gamespot had a huge stockpile of used CoD WoW and they had to lower their prices to get them to sell. This means that Activision, the publisher, is getting less profit from the lower price point and is also getting no money from the reselling of the games by Gamestop for example.

  • http://www.coretalentgames.com CaRteR

    I think you're forgetting one thing. Games aren't a commodity or a piece of functional technology. Their entertainment. As long as entertainment has existed it's been hit-based. Go back one, two, three decades – there was slots of sludge, and yet there still managed to be those rare hits.

    It's about making hits. How do you make the hits? That's the question.

    • http://www.makeitbigingames.com Jeff Tunnell

      I didn't say there not be hits. There will be. How do you make hits? I don't know, nobody does. There are things you can do to improve your chances, but it is too much to put in a comment. Most of my blog is about what you can do to improve your chances.

  • lithander

    Money isn't the only price I pay when playing a game. The other resource I'm investing is time. People that have money to spare will always be willing to pay money for entertainment if that increases the fun/time ratio. The only risk for someone trying to sell his game is a comparable cheaper product. So in my opinion to earn money with creating games you either need to create a unique/niche game to avoid competition or a generic but high quality game to be more attractive then your competitors.

    To create a game that sticks out and is good to earn a profit you need a team of specialists. And tbh I don't agree that it has become easier to become such a specialist compared to 20y ago because with more sophisticated technology there's just a LOT more you need to learn to work with effectively.

    As for game pricings… I do think that the internet has an impact on game prices as it allows new generally cheaper ways of publishing & marketing games. Thanks to the internet it's possible to make a profit _despite_ having only a small amount of unit-sales or selling a copy for just a couple of dollars. But the classical way to sell your game – placing a boxed physical copy in thousands of stores – involves a big monetary effort that has nothing to do with the development of the actual game. So typically only BIG titles that suit the mass-market are profitable to be published that way.

    Bottomline: Thanks to the internet there will be more diverse business models but this doesn't mean that the big AAA titles will die out or become any cheaper.

  • http://www.nintendowiigames.us/ nintendowiigames

    Nice post Jeff.

    You are bit off-the-mark here though. We will be heading towards a pricing point where we actually PAY users to play the game… :)

    > “When we first started the GarageGames Game download store, I advocated for, and won, a $14.95 price point.”
    Gotta tease a bit, but did you actually test that price point – or was it won over by argumenting? ;)