[casual_games] Price as Signal

[Sean Ryan]

The Joelonsoftware.com reference below may be one side of the equation
(price sends a signal, so don't lower the price because it will signal
lower quality), but the movie theater example is, in my opinion, an
incorrect example to use since there are a limited number of seats in
each theater and a limited number of showings per day, as well as fixed
cost of having the theater - we don't have that problem in casual games,
with zero inventory costs and zero marginal cost - so, this is a price
elasticity question, as detailed here.
http://www.sharkjumping.com/2005/12/casual_game_pri.html

As to the music analogy, we spent a lot of time on this at Listen.com
where we did extensive price elasticity testing on download sales,
coming to the conclusion that dropping the price of all music downloads
to $.50 would increase overall revenue by 350% over a sustained period
of time, but the labels wouldn't go for it.  The game price shouldn't
matter within a certain range for one product such as Battle Castles,
but it should matter over a period of time over a range of products if
the distributor can prove that the product category is elastic. 

Sean Ryan
CEO, Donnerwood Media
sean at donnerwood.com

 


-----Original Message-----
From: casual_games-bounces at igda.org
[mailto:casual_games-bounces at igda.org] On Behalf Of Tom Park
Sent: Tuesday, December 13, 2005 2:39 PM
To: IGDA Casual Games SIG Mailing List
Subject: Re: [casual_games] Price as Signal

http://joelonsoftware.com/items/2005/11/18.html


----- Original Message ----- 
From: "Lennard Feddersen" <lennard at RustyAxe.com>
To: "IGDA Casual Games SIG Mailing List" <casual_games at igda.org>
Sent: Tuesday, December 13, 2005 1:12 PM
Subject: Re: [casual_games] pricing


> /When I worked at Pogo, we would sell our download games for $19.99
online 
> but
> $9.99 at retail because those were the most effective price points for
> us in those channels.
>
> /That's really interesting to me - I had always assumed that you would

> cannibalize sales if you did that - or deal with a bunch of cranky 
> consumers demanding money back.
>
>
> Lennard Feddersen
> CEO, Rusty Axe Games, Inc.
> www.RustyAxe.com
>
> Lennard at RustyAxe.com
> P. 250-635-7623 F. 1-309-422-2466
> 3521 Dogwood, Terrace, BC, Canada, V8G-4Y7
>
>
>
> Dave Rohrl wrote:
>
>>The right price is one at which a willing buyer and a willing seller
>>meet and it varies not only by product but also by channel.  When I
>>worked at Pogo, we would sell our download games for $19.99 online but
>>$9.99 at retail because those were the most effective price points for
>>us in those channels.  If possible, I would encourage you to test
>>multiple price points in a limited release - maybe through your own
web
>>site - to see where you will make the most money with your current
game.
>>
>>And as far as the Doom 3 argument goes, I don't think it's terribly
>>valid.  Doom 3 isn't worth $50 to your target customer - it has no
value
>>whatsoever to them.  I do think that argument is valid where people
try
>>to do hard-core games and genres in the download space, which is one
of
>>the reasons that people haven't seen much success with combat flight
>>sims, core sports, etc. in the download space.
>>
>>As far as "just moving the mouse and clicking the button", that's
pretty
>>much what I did in Diablo as far as I can recall ;)  Simplicity of
>>interface is never a bad things for a game - think of Katamari - but
it
>>may be that the reviewer is trying to call out other issues for you.
>>
>>- DaveR
>>
>>-----Original Message-----
>>From: casual_games-bounces at igda.org
>>[mailto:casual_games-bounces at igda.org] On Behalf Of Lennard Feddersen
>>Sent: Tuesday, December 13, 2005 10:37 AM
>>To: casual_games at igda.org
>>Subject: [casual_games] pricing
>>
>>My companies latest game, Battle Castles, has been venturing out of
the 
>>casual space sandbox where reviewers often ask the same question I do 
>>about what we make.
>>
>>How come $20 for this game where I just move my mouse and click the
>>button?
>>
>>I know that people either like what you make and buy it or they don't
and 
>>that often those who are complaining wouldn't pony up $10 either.  I
>>
>>know from personal experience that games priced at $24.99 can vastly
out
>>
>>perform titles at $14.99 - perceived value is a real thing.  That
said, my 
>>game didn't cost 1/3 of what Doom 3 cost to make and there are lots of

>>multi-million dollar titles down at the local video store on sale, in
>>
>>shiny packages for $20.
>>
>>Anybody have a fresh new take on this one?
>>
>> 


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