ummmm, k......This guy doesn't think CAGers are good for gaming.

Well sure. I acknowledge developers need games selling at full price to get buy and do make some effort to support my favorite developers, franchises etc. by buying at or near launch if I have time to play it then.

But games are pricey, so I'm not going to buy everything day one as a lot of games just aren't worth full price even if they're worth playing. If I buy some new IP cheap as I didn't want to take a chance on it, I'll try to buy the sequel day 1 to help keep the series going. So sales can help generate interest too--as long as they make enough to stay in business and/or warrant a sequel of course.
 
In a market were sales are important for the first few weeks, yeah, it does hurt.  All we hear about now is how many copies GTA V sold in 3 days, or how many xbox ones and ps4s were sold in the first month.  You look around on here and every post is usually filled with "I'll wait/buy it when its $10/20 bucks".  If a game doesn't do well right out of the gate, it's usually viewed as a weak IP or failure, and then no chance of sequels or continued stories.  So yes, I agree with him.

 
Well yeah I do think as well that for example Humble Bundles actually hurt the gaming industry. You get up to 10 games for the price of one or mostly even less, destroying the value of those games completely forever. And since most of the people buy bundles just for maybe 2 specific games in it, the other games will sit in their library forever without ever being played.

 
Kinda stupid article. Hate to break it to this guy since apparently he's been living in a cave forever but this act is done for literally everything that consumers buy. People wait out stores for anything hoping for sales as games are hardly the only thing this practice is used on. So he basically is saying people suck for not buying things immediately and waiting for price drops, whether those drops are permanent or temporary sales. No shit people do this, in other news the sky is blue and the grass is green.

I'm pretty cheap myself and have a lot of patience so I tend to wait on price drops for most of my games or movies. Of course some I simply cannot wait for and will buy first day release but that's not too often.

 
You know this guy doesnt buy his cars brand new, and waits for sales to buy clothes, food, etc. Paying full price for anything you know will be cheaper in a few weeks is just stupid. It is as simple as that.

 
He expects blockbuster success while putting out an indie/niche product. Good luck with that. If he wants that type of success and acclaim then maybe he should try making an amazing game or spending a ton of cash on marketing.

His statement shows a poor understanding of the industry business model. The majority of games make most of their money in the first 30 days. After that a game is put on sale to catch any stragglers who are waiting for a deal and the sales continue until the game hits fair market value, as dictated by the market. If he wants to buck the model more power to him but customer behavior says otherwise. 

 
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MushaOne said:
Paying full price for anything you know will be cheaper in a few weeks is just stupid. It is as simple as that.
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I don't mean to single you out, because it seems like most people in this thread didn't really read the article close enough, but this comment makes me think you didn't read what he said. Because what you just said is basically what Rohrer said.

If you read the article, he says that sales make people decide to wait and not buy a game at launch. His proposition is for games to go on sale pre-launch and then at launch for a slightly less good sale (and then go up to their full price after a week) so that early adopters don't feel burned later on and discouraged from buying things at release. Oh, and I guess I should add that preorder/launch sales would actually encourage people to buy at release instead of discouraging that, which is what Rohrer is trying to point out.

I personally like this scheme because I'd be willing to jump on more things at release this way. Sure, maybe you could combine this with the current way things work so that after a game has been out a while, it could go on sale again, but I do like the idea of rewarding early adopters with sales.

 
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ihadFG said:
I don't mean to single you out, because it seems like most people in this thread didn't really read the article close enough, but this comment makes me think you didn't read what he said. Because what you just said is basically what Rohrer said.

If you read the article, he says that sales make people decide to wait and not buy a game at launch. His proposition is for games to go on sale pre-launch and then at launch for a slightly less good sale (and then go up to their full price after a week) so that early adopters don't feel burned later on and discouraged from buying things at release.

I personally like this scheme because I'd be willing to jump on more things at release this way. Sure, maybe you could combine this with the current way things work so that after a game has been out a while, it could go on sale again, but I do like the idea of rewarding early adopters with sales.
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The problem with his plan lies in the fact that if the game fails to sell pre-launch it is doomed to fail because instead of dropping in price to meet market demand it would be doing the opposite. It's faulty logic by someone who doesn't understand how economics works.

 
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kill3r7 said:
The problem with his plan lies in the fact that if the game fails to sell pre-launch it is doomed to fail because instead of dropping in price to meet market demand it would be doing the opposite. It's faulty logic by someone who doesn't understand how economics works.
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I don't understand why you think he doesn't understand how economics works. He clearly shows an understanding of the current industry business model, and he's purposely throwing that out the window. Not every game has to follow the current model to be successful. Just look at Minecraft. That more or less followed the model Rohrer is talking about.

If a game completely fails to sell at pre-launch and launch, it's hard to come back from that no matter what the pricing model is. Rohrer's model seeks to increase pre-launch and launch sales by drawing in not only the big fans who will buy at launch no matter what, but also regular fans who want a good deal. If a game tries this model and fails at launch, there's always room to readjust the pricing model to try to make the best of a bad situation. But if a game succeeds with this model, not only have you rewarded your loyal fans, but you've drawn in some of the sale-buying crowd. Then, if the game is good, this can lead to word-of-mouth advertising becoming a powerful tool for drawing in the people that didn't know about the game.

Now obviously this model isn't appropriate for every game, and in particular it seems like a better fit for non-AAA PC games, but I also don't think the current model is necessarily what's best for every game either.

 
EdgeCrusher36 said:
In a market were sales are important for the first few weeks, yeah, it does hurt. All we hear about now is how many copies GTA V sold in 3 days, or how many xbox ones and ps4s were sold in the first month. You look around on here and every post is usually filled with "I'll wait/buy it when its $10/20 bucks". If a game doesn't do well right out of the gate, it's usually viewed as a weak IP or failure, and then no chance of sequels or continued stories. So yes, I agree with him.
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more like i will wait, when it is free on playstation plus, or less than $10 on gamefly

 
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Minecraft is an outlier. If you create models based on outliers you are bound to fail, hence the term outlier.

Rohrer thinks he can entice gamers/early adopters with a low price point then reap the benefits of their word of mouth advertising. The problem with this proposed model is that it limits your options in the sense that if the game doesn't sell well out of the gate then you have no way of changing course since you are refusing to reduce the price. This shows a lack of good economic understanding.

The market will ultimately determine the price. IMO, he would be better off letting people pay what they want for it rather than applying his pricing structure.

 
ihadFG said:
I don't understand why you think he doesn't understand how economics works. He clearly shows an understanding of the current industry business model, and he's purposely throwing that out the window. Not every game has to follow the current model to be successful. Just look at Minecraft. That more or less followed the model Rohrer is talking about.

If a game completely fails to sell at pre-launch and launch, it's hard to come back from that no matter what the pricing model is. Rohrer's model seeks to increase pre-launch and launch sales by drawing in not only the big fans who will buy at launch no matter what, but also regular fans who want a good deal. If a game tries this model and fails at launch, there's always room to readjust the pricing model to try to make the best of a bad situation. But if a game succeeds with this model, not only have you rewarded your loyal fans, but you've drawn in some of the sale-buying crowd. Then, if the game is good, this can lead to word-of-mouth advertising becoming a powerful tool for drawing in the people that didn't know about the game.

Now obviously this model isn't appropriate for every game, and in particular it seems like a better fit for non-AAA PC games, but I also don't think the current model is necessarily what's best for every game either.
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since, you brought up minecraft, why is it so popular? i played it once, and was not really impressed, or drawn into it at all. just not my cup of tea.

 
He has a good idea.  The problem is if he keeps this model he will realize after 1 month he has zero sales as the full price is stuck and later adopters will want a sale to purchase it!

His model really needs to be a bell curve to be successful. 

Preorder   $8

Release  $12

1 Week later  $16

1 Month Later $15

2 Months Later $12

3 Months Later Sale 

If he does not offer a sale in the future his total sales number will be what he sells in 1 month time unless he creates a sleeper hit that receives rave revues and gets additional attention after launch. 

He makes a valid point about rewarding the people that preorder, however he's missing a point that the people with the greater amount of money to waste and pay full price at launch are going to get a discount and many of these rich gamers do not care that they saved $4. 

 
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kill3r7 said:
Minecraft is an outlier. If you create models based on outliers you are bound to fail, hence the term outlier.

Rohrer thinks he can entice gamers/early adopters with a low price point then reap the benefits of their word of mouth advertising. The problem with this proposed model is that it limits your options in the sense that if the game doesn't sell well out of the gate then you have no way of changing course since you are refusing to reduce the price. This shows a lack of good economic understanding.

The market will ultimately determine the price. IMO, he would be better off letting people pay what they want for it rather than applying his pricing structure.
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You're argument against this price structure is based around this idea that your game might not sell well initially. However, this pricing model is set up specifically to spur early sales. So if your game pulls a hardcore flop out of the gate, it's a failure of marketing and/or perceived quality, instead of being the result of the "culture of waiting" that Rohrer describes. And at that point, it may be best to give up on Rohrer's pricing model and try something else. Rohrer isn't saying that you can't change course if you've failed during the first steps. But honestly, even with the established pricing model, if you fail out of the gate, it's going to be extremely difficult to turn that around.

 
ihadFG said:
You're argument against this price structure is based around this idea that your game might not sell well initially. However, this pricing model is set up specifically to spur early sales. So if your game pulls a hardcore flop out of the gate, it's a failure of marketing and/or perceived quality, instead of being the result of the "culture of waiting" that Rohrer describes. And at that point, it may be best to give up on Rohrer's pricing model and try something else. Rohrer isn't saying that you can't change course if you've failed during the first steps. But honestly, even with the established pricing model, if you fail out of the gate, it's going to be extremely difficult to turn that around.
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There are many pricing strategies out there but my response to Rohrer and you.... is to read up on PED (price elasticity of demand). That answers the question why his proposed "penetration pricing" model is flawed. He is assuming that by pricing his game at 50%off he will drive up sales and eradicate the "culture of waiting". This is fallacy since the low entry price does not assure one of anything more than possible greater sales at a lower price. Keep in mind that we are talking about an industry where the bulk of your sales occurs in the first 30 days after release. I would challenge Rohrer to implement the following model. He can release his game at full price for the first month or two and drop the price by 75% or more for a weekend. I can almost assure him that his sales figures would be better than starting out at low price point.

I'm basing this assertion on what happen with Random House and Rob Reid's Year Zero ebook when it dropped in price to $1 fifteen months after the initial release and it ended back up on the NYT bestsellers list and has continued to sell strongly after that. You can cause sales spikes by manipulating the price but one must understand the nature of the their industry as well as human nature. At the end of the day the market will pay for the perceived value of the product. The fact that Apple sits on $150 billion cash is proof that a luxury price model can work as long as the market sees value in your product.

 
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kill3r7 said:
There are many pricing strategies out there but my response to Rohrer and you.... is to read up on PED (price elasticity of demand). That answers the question why his proposed "penetration pricing" model is flawed. He is assuming that by pricing his game at 50%off he will drive up sales and eradicate the "culture of waiting". This is fallacy since the low entry price does not assure one of anything more than possible greater sales at a lower price. Keep in mind that we are talking about an industry where the bulk of your sales occurs in the first 30 days after release. I would challenge Rohrer to implement the following model. He can release his game at full price for the first month or two and drop the price to $1 after that for a couple of weeks. I can almost assure him that his sales figures would be better than starting out at low price point.

I'm basing this assertion on what happen with Random House and Rob Reid's Year Zero ebook when it dropped in price to $1 fifteen months after the initial release and it ended back up on the NYT bestsellers list and has continued to sell strongly after that. You can cause sales spikes by manipulating the price but one must understand the nature of the their industry as well as human nature. At the end of the day the market will pay for the perceived value of the product. The fact that Apple sits on $150 billion cash is proof that a luxury price model can work as long as the market sees value in your product.
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Well one thing you have to take into account for Rohrer's pricing model is that he isn't claiming that his model will outdo the traditional model in terms of lifetime sales. His reason for this model is that he wants a financially sustainable model that reward the fans that buy a game early, instead of spurning them by putting the game on sale shortly after they buy it. He also wants to maximize the amount of people that play the game once they buy it. So his strategy is to try to maximize sales early on among the people that are already fans of his. This way, the initial community for the game is strong (which is rewarding for those early adopters), and those loyal fans don't have to feel conflicted about buying the game instead of waiting for a sale because they are getting a sale. Then, after the price has increased, people aren't being psychologically pushed into buying the game because of a sale. Instead, the only people buying the game are one's that actually want to play it. And people that do want to play it at that point won't be waiting for a sale because a sale isn't coming. So this model isn't designed to get the most profit overall (although I do think it could do that for certain games that are aiming to grow a community over time), but it is designed to discourage people from waiting to purchase the game if they are interested. And most importantly to Rohrer, it doesn't involve the moral issues of 1. making early adopters feel stupid for not waiting and 2. luring in sales from people who only bought it because it was on sale and will never actually get around to playing it.

 
ihadFG said:
Well one thing you have to take into account for Rohrer's pricing model is that he isn't claiming that his model will outdo the traditional model in terms of lifetime sales. His reason for this model is that he wants a financially sustainable model that reward the fans that buy a game early, instead of spurning them by putting the game on sale shortly after they buy it. He also wants to maximize the amount of people that play the game once they buy it. So his strategy is to try to maximize sales early on among the people that are already fans of his. This way, the initial community for the game is strong (which is rewarding for those early adopters), and those loyal fans don't have to feel conflicted about buying the game instead of waiting for a sale because they are getting a sale. Then, after the price has increased, people aren't being psychologically pushed into buying the game because of a sale. Instead, the only people buying the game are one's that actually want to play it. And people that do want to play it at that point won't be waiting for a sale because a sale isn't coming. So this model isn't designed to get the most profit overall (although I do think it could do that for certain games that are aiming to grow a community over time), but it is designed to discourage people from waiting to purchase the game if they are interested. And most importantly to Rohrer, it doesn't involve the moral issues of 1. making early adopters feel stupid for not waiting and 2. luring in sales from people who only bought it because it was on sale and will never actually get around to playing it.
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His model is way too complicated for its own good. I wish him the best of luck and I hope he proves all of us wrong but at the end of the day game development is work and people like to make money.

 
He goes on at length about how he wants good launch sales and doesn't want to screw over early adopters, but we don't care about that, and neither should he; that problem was already solved by offering early access/launch day discounts. What people want to know is: "why are you NEVER planning to discount your game?" It doesn't have any real bearing on the previous two issues: early adopters aren't going to be miffed if the game drops in price by $4 during a weekend sale six months after launch... so what's the point?

From reading his post, there appear to be two answers: 1) People will buy it anyway if they know that is the only price (i.e. "Minecraft logic") and 2) He is saving people from themselves by preventing them from buying a game they won't actually play. In other words: he wants to simultaneously encourage AND discourage impulse purchases. Interesting. Also, forgive me if I'm incredulous when a developer tells me "I don't want you to buy my game unless I know that you REALLY want to play it."

Launch sales are a perfectly good idea. What I DON'T need are high-pressure sales tactics thrown in to the ever-expanding drama that is buying an indie game. Between Kickstarter, Early Access and now this, it feels that more and more developers want cash up-front before I actually have a good idea of what I am buying. "The culture of waiting" isn't just about saving money, it's also about making sure you didn't piss said money away on a terrible game.

 
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I've actually considered this before. I'm planning on eventually experimenting with a possible sales model based around a similar concept.

I want to make a game that starts at a given price, let's say $10. (just as an example) Whenever I add some manner of new content or DLC, I don't charge separately for that content, I just increase the cost of the base game by $5. If you had already purchased the game, you get the new content for free, no additional charge. If you hadn't already bought the game, the base game now costs more.

This manner of system wouldn't really work with traditional retail titles. But it would work just fine with downloadable games. Modern technology makes this manner of approach possible. A system like this one actively encourages and rewards early purchasers with the lowest possible price, while gently punishing anyone who insisted on waiting.

It isn't necessarily an anti-CAG approach. The initial price is still quite low. And if the game continues to be in active development for several years, anyone who buys it day one could easily end up saving quite a bit of money. Instead of paying $60+ down the line, they get access to the game immediately, for the lowest price that the game is ever available for.

With the current retail model and DLC-scheme, early adopters often end up getting screwed over, and games tend to plummet in price quickly. Since games are beginning to be treated as more of a long-term service, it makes sense for their pricing models to also adapt.

 
Richard Kain said:
I've actually considered this before. I'm planning on eventually experimenting with a possible sales model based around a similar concept.

I want to make a game that starts at a given price, let's say $10. (just as an example) Whenever I add some manner of new content or DLC, I don't charge separately for that content, I just increase the cost of the base game by $5. If you had already purchased the game, you get the new content for free, no additional charge. If you hadn't already bought the game, the base game now costs more.

This manner of system wouldn't really work with traditional retail titles. But it would work just fine with downloadable games. Modern technology makes this manner of approach possible. A system like this one actively encourages and rewards early purchasers with the lowest possible price, while gently punishing anyone who insisted on waiting.

It isn't necessarily an anti-CAG approach. The initial price is still quite low. And if the game continues to be in active development for several years, anyone who buys it day one could easily end up saving quite a bit of money. Instead of paying $60+ down the line, they get access to the game immediately, for the lowest price that the game is ever available for.

With the current retail model and DLC-scheme, early adopters often end up getting screwed over, and games tend to plummet in price quickly. Since games are beginning to be treated as more of a long-term service, it makes sense for their pricing models to also adapt.
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There is no early adopter (EA) problem because these folks will be there day one regardless of your pricing scheme. You want to make sure that the advertising is there so they know and want your product. Also, you want to make sure that the product is priced correctly to maximize profits. EAs are going to be there day one no matter what. EAs don't care that Apple releases a new iPhone every year because they'll be in line to buy the next one. That's how MS and Sony sold 1 million PS4s and X1s on the first day of release. These are the folks who will put up with high failure rates and unfinished products. EAs are driven by three factors/motivations: information, novelty and status.

It would be an interesting experiment to reward EAs but most gaming companies and stores have implemented this marketing tactic in the form of pre-order bonuses. I would be interested to see if there is a correlation between pre-order bonuses and high sales figures.

Here's a pretty good diagram showing a products lifecycle (Diffusion of Innovation by Everrett Rogers).
DiffusionOfInnovation-1.png


IMO, you want to maximize your sales for the early and late majority. You can always get the laggards (most of CAG) a year after release.

 
kill3r7 said:
IMO, you want to maximize your sales for the early and late majority. You can always get the laggards (most of CAG) a year after release.
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Your sales projections are based on an obsolete market concept. The laws of supply and demand can't be used identically with digital goods. They have no finite supply. When a digital game is made available, as many people who want to buy it can. The physical restraints of the typical retail model have to be adapted when dealing with a digital storefront.

Given the current swing in the industry, where digital sales are becoming more and more prominent while retail presence is steadily dwindling, coming up with a different approach to how video games are purchased, monetized, and marketed is becoming more important than ever.

It's not a matter of how to sell to and appeal to different consumers. That isn't he issue. Especially if you start your game out at a price that makes it accessible to the vast majority of consumers. The issue is how you think of games themselves. Treating them as though they were a boxed product that is shipped to stores is nonsensical when that scenario no longer applies. Pricing them identically is also silly.

A game that remains in constant development over time accrues value. As it improves and gains additional content, it becomes a better, larger game. It makes sense that for such an experience, the price would go up over time instead of constantly decreasing.

The kind of pricing scheme I'm proposing works for most people. Enthusiastic fans get the game as early as possible, get to pay the lowest price the game ever sees, and enjoy all the benefits of post-launch additions for no extra cost. Late adopters would have to pay more, but they would also be getting more.

It is a pricing scheme that would obviously not work with traditional retail products. But many games are no longer traditional retail products. It's time to start looking toward the future of the medium.

 
I think your model isn't bad.  However I think you would be better off giving the DLC for free to everyone and hoping that it just sells more of your game because the newer version of your game is now better.  I really think that raising the price of a game after it's sold for a lower price is going to hurt sales not help them. 

 
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The model that works is this:  If you want me to pay full price, then thrill me.  Knock my socks off and make me excited.  I'll blow full price on something that really grabs my attention.  If you don't make me have to have it right away, then I wait until the price is right.  If you don't want me to buy it at all, then keep the price up high.  So many games come out these days that aren't worth $60.  Don't complain when you aren't making a product that demands my attention enough for me to buy it at full price.  That's your fault, not mine.

I wanted to play Deadpool, Metal Gear Rising, DmC, etc.  But not for $60.  If they didn't drop in price, I would have just skipped them and then they get $0.  As a result, I had to wait many months before getting to enjoy them.

 
Get out of my mind, Charles. I've been saying this for years.

defpally said:
The model that works is this: If you want me to pay full price, then thrill me. Knock my socks off and make me excited. I'll blow full price on something that really grabs my attention. If you don't make me have to have it right away, then I wait until the price is right. If you don't want me to buy it at all, then keep the price up high. So many games come out these days that aren't worth $60. Don't complain when you aren't making a product that demands my attention enough for me to buy it at full price. That's your fault, not mine.

I wanted to play Deadpool, Metal Gear Rising, DmC, etc. But not for $60. If they didn't drop in price, I would have just skipped them and then they get $0. As a result, I had to wait many months before getting to enjoy them.
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I fully agree with not burning early adopters with a sale too soon but there comes a point where your numbers stagnate and a sale can cause a massive influx of new players which then proceed to further promote your game on forums and social sites which then leads to even more people buying the game and often when it's no longer on sale. (basically all of the data says as much)

I kinda wonder if this is just a stunt to get people to not wait and then 3-6 month down the line once most everyone has forgotten about his stance on sales = *poof* Steam sale. I applaud him for taking a stand but the realities of the market simply aren't on his side.

 
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