[casual_games] Different Payment Models

Mon Oct 9 18:09:01 EDT 2006

The $20 price point / 60 minute trial was arrived at by several companies
simultaneously.  No one company created it.  I personally tested different
time limits and prices.  Lower prices didn't work because there is not
enough price elasticity in our market.  The hard part is getting the credit
card out - after that, $10 or $20 doesn't matter.  This has obvious
ramifications for any micro-transaction or alternative pricing model we
consider.  Different time limits and models (level locking, feature locking,
etc.) were either not universally applicable or were too complicated to
message.

As Dave points out and Vladimir reiterates, the world is always changing so
we should constantly re-evaluate our decisions.  RealArcade is always
testing...

Different games may have different characteristics, even between regions.
Zylom charges 30 euros for the same games that cost $20 in the US, with
minimal negative price elasticity.  Some sites / publishers have sold their
US games at $30, although the results have been mixed and not always
positive.  Some companies offer 30 minutes of free play on games, which may
be too much or too little depending on the game.

With this in mind, design your games for the world in which we live.  The
most successful games are designed with the 60 minute trial, regardless of
what you believe.  Players should be engaged and "peaking" at minute 59...
This is always going to be a hits business.

Cross site "hopping" isn't a major factor.  Studies show that most buyers
aren't savvy (or motivated) enough to do this.  Further, I believe people
that work so hard to play for free weren't going to buy anyway.  I
personally wouldn't (and don't) devote my energies to this issue.

Finally, never stop considering new ideas and new models, but work with the
major distribution portals.  I can (humbly) suggest that the idea of a
cross-industry payment model, micro-transaction-based or not, will never
fly.  But there are other models worthy of consideration.  Real is actively
experimenting with advertising-based models.  Other sites are trying
different models.

Our industry is evolving.  Exciting times are ahead.  Here's to finding a
better mousetrap.

Charles S. Merrin
Vice President, North America Games
RealNetworks, Inc.

P:  +1 (206) 892-6208
M:  +1 (650) 787-2394
E:  cmerrin at real.com 

-----Original Message-----
From: casual_games-bounces at igda.org [mailto:casual_games-bounces at igda.org]
On Behalf Of Cole, Vladimir
Sent: Monday, October 09, 2006 10:50 AM
To: IGDA Casual Games SIG Mailing List
Subject: RE: [casual_games] Different Payment Models

Is anyone able to please share more information about these studies from
the early years of the download business (date, author, sponsoring
organizations, etc)? I'd love to understand the methodology better.

Can a one-size-fits-all solution work for every game (or even for most
games)? For example, most potential customers know what Pac-Man is at
this point, so 120 seconds of "demo play" should be plenty of time to
evaluate the quality of a given build of the game. They'd probably grow
bored of the title after a full hour of pellets and ghosts. At the
opposite end of the scale, the demo period for World of Warcraft lasts
10 days.

Maybe there's something to be said for simplicity of demo models (makes
it easier to explain to customers how the demo period works), but maybe
some portion of XBLA's conversion success can be attributed to the
variety of demo modes used for XBLA games?

More broadly: shouldn't old studies be occasionally re-evaluated for
ongoing validity?

-----Original Message-----
From: casual_games-bounces at igda.org
[mailto:casual_games-bounces at igda.org] On Behalf Of Dave Rohrl
Sent: Monday, October 09, 2006 1:33 PM
To: IGDA Casual Games SIG Mailing List
Subject: RE: [casual_games] Different Payment Models

Likewise, the 60-minute duration is not a randomly chosen trial
criterion.  In its early history the download game industry experimented
with a wide range of trial criteria including level locks, feature
locks, number of executions, etc.  The reason that the 60-minute
full-game trial stuck was that it optimized revenue for the most games.

That said, I think any developer with meaningful traffic to their site
should be doing some game-by-game experimentation with price points and
trial criteria to see what works best for their game and their audience.
But for the broad audience and most current downloadable games,
$19.99/60 seems to be the sweet spot.

Dave Rohrl
GM- PopCap SF

-----Original Message-----
From: casual_games-bounces at igda.org
[mailto:casual_games-bounces at igda.org] On Behalf Of Michael Mei
Sent: Monday, October 09, 2006 9:41 AM
To: IGDA Casual Games SIG Mailing List
Subject: RE: [casual_games] Different Payment Models

Regarding the evolution of the $19.95 price point. Long ago Real
Networks
did some customer research and found that there's little price point
elasticity below $19.95.  There wasn't any significant increase in
purchases
when the price point was reduced as a standard pricing.  And price
points
above $19.95 for the average casual games caused a significant reduction
in
purchases.

Some of the "more seasoned" veterans of the casual game space, please
jump
in if I got this wrong.

Also, Reflexive actually saw a reduction in purchases when we reduced
the
price point of Ricochet Xtreme to $9.95 for a significant time period.
In
my opinion, the user may feel that the game is of lesser quality because
of
the lower price point.  A $19.95 price point may inherently give the
game
the feeling of higher quality.  Remember...it's not from the perspective
of
a Developer.  It's from the perspective of a 38yr old female who is the
target market and not on this distribution list.

I will shout out the disclaimer that the strategy for the $19.95 price
point
may have been great for the past and current, and I'm not sure what it
holds
for the future.

Michael Mei
Business Development
Reflexive Entertainment
www.Reflexive.com
949-830-1903  x30

NOTICE:  The information contained in this e-mail & any accompanying
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-----Original Message-----
From: casual_games-bounces at igda.org
[mailto:casual_games-bounces at igda.org]On Behalf Of Alex Amsel
Sent: Monday, October 09, 2006 9:23 AM
To: IGDA Casual Games SIG Mailing List
Subject: Re: [casual_games] Different Payment Models

$19.99 seems like a good price point to me. Once you get much under that
price, some developers will struggle to make a return (overall), and you
also don't give the publisher/portal far to go when trying to bump
sales/special offers. As things stand, the rrp is $19.99 but many
portals offer various schemes to get games cheaper.

Having worked extensively in the retail sector of games, the last thing
you want is to have a low rrp followed by even lower discounting. I've
seen where that goes and it isn't pretty, for developers or many
publishers. Sure you may grab some extra sales if the rrp of all games
was $9.99, but double average game sales across the board? I doubt it
you'd get anywhere close.

Also, I know that many companies have researched the time limit/product
content/price ratios very carefully and, generally speaking, the 1 hour
+ $20 + feature unrestricted has worked best for mainstream casual
titles. Like many of you, we'd also wondered how they'd arrived here and
had planned a series of tests. While we may still do some, I've seen
enough data to be convinced that it works as a general rule of thumb. I
would still like to be able to disable certain features and detect if a
game has been bought though, and I think certain games benefit from
slightly different models (less time, feature restrictions).

I'm very much a fan of micro-payments, but you need a critical mass of
people who use them or it just doesn't work. That's probably just a
matter of time, but whether it'll be next year or in 5 years is unclear.
Every year people say it will happen, and every year it doesn't, except
for on very specific games. Micro payments need to be global and either
for your entire market - e.g. XBLA, or much bigger than your market -
e.g. through paypal or a similarly known and accepted payment system.

Also, I don't feel pay per play is compatible with the casual world in
many cases. The casual demo model works because it draws people into the
game, and keeps things easy for a considerable amount of time. The pay
per play model requires repeated plays, so each game can't be too long.

Pay per time playing could work but I'm not sure if there is a
psychological element to get over. I'm working with a pay-per-play model
at the moment but that's more along the lines of if you play for an
hour, you a subsequently billed accordingly, and the product revenue is
split according to the time spent on each product during that hour.

Advertising within the download is an interesting one. It would be nice
to generate a little revenue from each download, especially if people
play for more than a few minutes.

I also agree completely that there is no good reason players should be
able to cheat the DRMs by downloading the game from another provider -
that's plain daft and an easy fix, although I'm unsure how many sales
are really lost through this.

Just my random thoughts...

lharrick at san.rr.com wrote:
> Also, how did the standard of $20 per game come about?
>
> Personally, I think the price point is too high.
>
> I am one of those people who would almost never pay $20 for a game
> (compared to other forms of media and entertainment, I feel the price
> is not a good value)... but there are many games that I would buy if
> the price were lower ($5 -$10 range).
>
> - Liz
>
>

--

Alex Amsel
Tuna Technologies Ltd (Sheffield, UK)
Cross Platform Game Development
Tel: +44 (0)114 266 2211  Mob: +44(0)7771 524 632

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