[casual_games] Different Payment Models

Mon Oct 9 18:45:51 EDT 2006

Good points Charles, thanks. I would be interested if you could elaborate on
your view why a cross industry payment platform would never fly or take off?
Would you see no room for such a solution inside the Casual Games segment?

I can really identify with your point on getting people to reach for their
credit cards. But, as I've seen it, people are more eager to submit their
card number to a vendor - or a central agency - that has some trust. With an
account that can be easily set to withdraw a certain amount each month,
even. This is a model that is known, for example, in the lottery business.
Also with Paypal. I would suggest that it is easier to get the client to
reach for his wallet once, rather than multiple times.

My view for a central system is not to turn the main monetary models upside
down. My aim would be to introduce alternative ways to monetize gameplay.

Regards,
Jónas B. Antonsson
COO (Chief Operating Officer)
--------------------------------
Gogogic ehf.
Fákafen 9, 108 Reykjavik, Iceland 
Mail jonas at gogogic.com
Mob +354 664 8600
Tel +354 534 7700
Fax +354 534 7701
Web www.gogogic.com
blog www.jonasantonsson.com 
--------------------------------

-----Original Message-----
From: casual_games-bounces at igda.org [mailto:casual_games-bounces at igda.org]
On Behalf Of Charles Merrin
Sent: 9. október 2006 22:09
To: casual_games at igda.org
Subject: RE: [casual_games] Different Payment Models

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
attachment (s) is intended only for the use of the intended recipient
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is confidential and privileged.

-----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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