Tuesday, October 4, 2011

Why All Our Games Are Now Cheaper Forever


Spiderweb Software just started our annual sale. It's ten percent off everything we sell for the whole month of October. That isn't really news. We do this every year, and people seem to like it.

But this year, there is much more. We permanently lowered the prices of everything we sell. At least 20% cheaper (in addition to the 10% for the sale). For some products, much more. The most expensive game we sell is now $20, and that is likely to last pretty much forever.

It's a big mental shift for us, and I thought it was worth blogging about. I write about game pricing on this blog a lot, and I'm not ashamed of it. Right now, most of the huge revolutions in the game biz are in the new crazy pricing models, and there are still a lot of questions out there about the most efficient way to make a game make money.

Why It Took So Long To Lower Our Prices

We released our first game in January, 1995. That is a long time ago, and much has changed. A few helpful comparisons.

Now: Huge distributors like Steam and iTunes sell massive numbers of copies for low prices, and Indie developers make good money on huge volume.
Then: The World Wide Web barely existed and we scraped by on a handful of sales from AOL.

Now: A quality Indie niche game sells on big portals for ten bucks at most. More than that and people think you're crazy and move on.
Then: Most good shareware games sold for $25. It took me a very long time just to realize that that price isn't normal anymore.

Now: Indie developers can make excellent livings selling lots of copies of cheap games.
Then: Indie game developers were called "shareware developers," and everyone thought they were losers and spat on them.

Now: Want to pirate a game? It just takes 3 seconds of searching on Pirate Bay.
Then: Took five minutes of searching instead of three seconds. This actually made a big difference.

Now: Many new games are given away for free and make their money on micro-transactions from a portion of their users.
Then: FREE games? With micro-WHAT? What are you? A SORCEROR?

(The shift to free games is arguably the most stunning development in the games biz in a very long time. My prediction: Within five years, there will be a successful game that pays you a small amount to play it and makes their cash selling better swords or whatever.)

I'm a dumb person in plenty of key ways, so it took me a while to observe the key fact:

A LOT of money is being made by selling games for cheap.

So now , instead of selling our games for $25 or $28 (!!!), we'll sell them for $20 or $15. I know this still seems like a lot, but I haven't backed off on the key thing I've long said ...

People Who Write Niche Games Can't Charge a Dollar

If you're making a pretty, shiny, highly casual game with cartoon squirrels and you think you can find a million fans for it, go ahead. Charge a dollar. You'll have to.

But if you write games like mine? Low budget, old school, hardcore RPGs with lots of content? If I charged a dollar for it, I'd have to sell a copy to pretty much every interested human everywhere to have a chance of making money.

So I still charge an actual price, an amount of money that still feels like money. Maybe I should have taken everything down to $15. Maybe I'm being too timid in the price drop. But, in a sense, that difference doesn't matter.

There are two sorts of prices you can pay for a game: An amount that is so small you don't care, and an amount high enough that you do. Our newest game, Avadon: The Black Fortress, is $20 on our site and $10 on Steam. That's a big difference, but, in a very real sense, they have the same price: an amount of money that actually feels like spending money. We will always charge actual money, as opposed to pocket change. All I have done is slightly tinkered with the level.

Bonus Point: Why Is Our Game Twice the Price On Our Site Than On Steam

I get asked this a lot, and it's a fair question. The answer:

In any place where your game is sold, pick the price that will maximize the profits. This ideal price changes depending on the nature of the place where it is being sold.

Steam is a big, sprawling gaming bazaar where practically all of the games are cheap. People see a game, spend a moderate amount of money on it, and try it out. People experiment there, and you need to charge a price that encourages customers to pick you as their experiment. Also, if you charge $20 for your game there, it will be on a list with ten good games at half the price, so you will get murdered.

Spiderweb Software's web site, on the other hand, only lists our games. It is generally only visited by fans of role-playing games. People on our site are generally really interested in the specific sorts of games we sell, and so the higher price doesn't scare them off.

This sort of logic isn't my weird invention. It's basic business. World of Goo is $20 on the company site, $10 on Steam, and $5 on iTunes. Each marketplace has its own norms, and you price your game to maximize your earnings there.

And that is why games are now at most $20 on our site. Because of the current standards of the game industry as a whole, I think that will most likely increase our earnings overall. It might not always have been that way, but I feel it is now.

(And, yes. I set game prices to maximize my earnings. Of course I do. Astonishingly, some people seem to take offense at this. I don't care. I'm not going to neglect to send my kids to college just so I can satisfy someone's arbitrary standards of Indie cred. I'm too old for that, and children persist in their irritating need to eat food.)

So. Anyway. A Sale.

Our games are cheaper forever, and even cheaper than that this month. We're getting a lot more sales, and I don't feel like the dumb jerk that still charges $28 for three year old games anymore. If you like old school role-playing games, you could certainly do worse.

And it will be a while before I write about pricing again. Believe it or not, I have other things to say (and make fun of). Time to get going on that ...

49 comments:

  1. While I understand the logic behind the Steam/website prices, it also seems like you're punishing the fans of your games. But hey, they're fans, they will want to support you anyway.

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  2. Sometimes you just have to move with the times.

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  3. Some parallels between your good self and the King of Dragon Pass guys. Your respective apps are the same price on iTunes (ten bucks) taking them outside the impulse buy range, but with niche markets that are probably less price conscious than the typical iTunes user.

    (It's not punishing fans, it's allowing fans the opportunity to pay the price they want. Unless they absolutely hate Steam or Apple and see it as an imposition, in which case a lower price makes sense.)

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  4. @Jan: Why is it punishing the fans? The fans have the opportunity to buy the game on Steam too; they're not restricted to buying from the site only.

    I'm going to continue buying games at the higher price from Jeff's site purely BECAUSE I'm a fan, and I want to keep feeding Jeff's children (hmm, that sentence came out strangely). But it's not as though I'm forced to do so.

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  5. IMO it's punishing the fans unless there's a disclaimer on the site saying 'these games cost less than half as much on steam, are you sure you want to buy them here?'

    I bought Avadon shortly before it was released on Steam, and 25$ vs 10$ is a huge difference. To be honest I feel kinda ripped off, even though I realize it wouldn't be possible to give all previous customers their 15 bucks back. Still.

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  6. @schuay When is the last time you saw a store -- ANY kind of store -- that had a sign next to the register saying, "Just so you know, you can buy our products way cheaper somewhere else"? It's a business, and Jeff's trying to make money. Why would he sabotage himself? If you're intent on paying less money, the onus is on you to research ways to pay less money.

    As for the price drop, all I can say is: that's life. The price of things will drop, sometimes dramatically. You can buy a bigname game on release day for $60, or you can wait a month for it to drop to $40 on Amazon, or you can wait 2 months for it to drop to $10-20 used on ebay. You're the one who ultimately decides the value of a game, because you're the one who pays the money. But it's not fair to consider yourself "ripped off" because you paid the price that was being asked by the vendor at that time.

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  7. I've been interested in Spiderweb games for a while now but was always put off by the price. I downloaded the Avadon demo, and got 1/2 way through, but couldn't justify 25$

    I considered it many times at 10$ when it appeared on Steam, but always had something else to play at the time.

    This weekend it was on sale for 5$, I bought it. Happy with it so far, and I'm wondering how the sale went from your end. Watching other indie devs, like Frictional games who made Amnesia, their blogs have said a couple times that the prominent Steam sales were their highest revenue days of the product. (Though, granted, they were involved in some of the biggest promotions.)

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  8. @ean5533-EEG many stores have a 'match the lowest price' policy.

    Anyways, just saying. I can't agree with the huge difference in pricing. It left a bad feeling for me and I suspect I might not be the only one.

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  9. Thanks for once again talking price,Jeff! I think you make some very reasoned arguments - and also remind us old RPG folks how much things have changed.

    At Gear Diary I constantly write about how the iTunes App Store has forever changed gaming, but in the last couple of years in-app purchases have even shifted THAT paradigm!

    I think the 'real money' distinction is important, and makes sense for these games.

    There are some who want level pricing - that just simply isn't realistic ... they are asking Jeff to intentionally lose sales (or money) in order to satisfy their need for a specific business model which I would describe as 'idiotic'.

    I live near the Finger Lakes of NY, and our work department had an event and hit a couple of wineries, where the price per bottle was higher than at local stores. Why? Because each makes sense! At the store they are competing with other product, and at the winery they are trying to find the balance that will enable tasters to buy.

    Similarly, PopCap is priced higher at their own store, and so on. It is reflective of a tiered business strategy.

    This approach - different prices for basically the same game through different shops on different platforms - is neither new nor unique, but instead reflects sound business practice. For some RPG fans, it is unacceptable, which is unfortunate.

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  10. Jeff, I'm pretty sure you can't talk exact Steam sales or anything. But has the game done well for Spiderweb on Steam? I have had my fingers crossed.

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  11. I am interested myself but the reason I have held off is that I don't want to spend real money to find out the game doesn't work through wine. If the game will run using wine in linux, is it even a possible option to use steam to download the game?

    I know I am one of the small segment of the market that people don't care about because we don't represent enough sales. I just am explaining my buyers reasoning for holding off, as relates to this discussion.

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  12. UbAh, couldn't you just download the demo and find out if it works?

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  13. @UbAh: I play spiderweb games exclusively on Linux via wine, and the worst bug I've ever experienced is that the sound sometimes dies and the game needs to be restarted to get it back. I've never had it crash or lose data on me. The graphics performance is usually lower, but that's to be expected with a compatibility layer in the way.

    And like Derek said, you can just download a demo from the site to try it out yourself.

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  14. @Derek Thanks for the response, I tend not to trust demo's as they usually are an early release and can have different bugs.

    @ean5533-EEG Good to hear you have not had trouble so I think I will give it a go.

    One last question remains though will I be able to order from steam or not without a windows box to do a steam install?

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  15. @Jan, @schuay: it's not "punishing" anyone. It's letting fans of the genre, and of SpiderWeb Software in particular, decide "I like the games here so much, I'm willing to throw extra money at them, so that more get made".

    Like Schuay, I bought Avadon directly from the website, at $25. Only now, reading this blog, did I even realise it's on Steam (my preferred online source of games) at all, and for 60% less.

    And you know what? I DON'T CARE. Avadon was worth $25, Avadon is _still_ worth $25, and IMO Avadon will be worth $25 in two years.

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  16. @UbAh I have Steam installed on my Linux machine via wine, and it's worked for the two games that I tried to play. I haven't specifically tried running Avadon through Steam on Linux, however.

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  17. @UbAh Spiderweb's demos are not the normal demo experience. It's kind of a throwback to a bygone era, but they are in good shape and representative of the final product. Indeed, the demo *is* the game, albeit content restricted until registration. I don't know if the Steam version works like that, mind.

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  18. @ean5533-EEG thanks you have reduced my excuses enough for me to give it a try.

    I have to admit to a little apprehension with using steam at all, but I really haven't done the research to see if my fears are still valid and this is probably not the right forum to hold a discussion about it.

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  19. Seems like the top reasons weren't mentioned:
    1) You now have real competition (the quality of the average indie title has skyrocketed)
    2) Nobody is buying much in this economy

    I would love to own all of your games, but as a result of #2 I have to pick my spots (usually a steam sale which hits when I have $)

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  20. Avadon was definitely worth $25, if you like this style of game, because of how much content is in the game. But for $25, I was holding off on buying it until I had a chance to play through the demo. When it showed up on Steam for $10, it WAS an impulse buy for me.

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  21. @UbAh: Here's a whole page dedicated purely to reviews, HOWTOs, and discussions about running Steam on Linux.

    http://appdb.winehq.org/objectManager.php?sClass=version&iId=19444

    In general, appdb.winehq.org will tell you everything you need to know about running something through wine.

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  22. I never spat on Shareware developers, and since I dislike steam for many reasons I won't get into, I like to support the actual producers of a game buy buying it directly from then. Personally, If I really like a game, genre, or producer that's releasing a new game, I won't minding paying more to get it through them instead of a middle man that doesn't understand the nostalgia of the old days.

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  23. I'm not sure you've ever mentioned it, but one reason to have different prices on different platforms is buy-in cost. $5 on iTunes really means $5 + plus the cost of buying into iTunes. Once you buy into a platform, you don't think about the extra cost. But suppose you don't have an iPad and had to choose between spending $5 + $500 for the hardware + whatever-your-time-is-worth to set up an iTunes account OR spending $20. Unless you have some other reason to get an iPad, the choice is easy.

    Steam is a little bit different, but it still requires some buy in. You don't need to buy new hardware, but you do need to install a somewhat invasive bit of software and set up an account. Once you've done it and opened up the world of possibilities, its obvious the cost was worthwhile. Until then, you might be better off paying a bit more to avoid the hassle if you only want to buy one game.

    What's more, there's a value to "being part of something". If you've ever bought a band's CD at their concert or a team's T-shirt at the stadium, you know that "being part of something" is worth some amount on money. When you buy from Steam or iTunes, you are just one of millions of customers buying one of thousands of games. When you come to a developer's website and buy directly, you are declaring yourself committed to their games. You are part of something bigger than yourself and it feels good. Maybe even $10 good.

    Finally, the low cost of Steam games reduces their value somewhat. This isn't a strictly rational thing, but since I have 18 games plus demos on Steam, adding another game to the list somehow is less valuable than if I bought the game directly. I have games that I never installed or only played for a few minutes because I bought them cheap on a weekend sale and forgot about them. If I were to buy Avadon: The Black Fortress direct, you can be sure I'd play the hell out of it to get my money's worth. As it is, I've downloaded the demo, but not bought the game since I don't currently have time to get into a deep, old-school RPG at the moment. (But maybe the sale will convince me before the end of the month.)

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  24. I will always buy stright from Jeff at spiderweb.. I dont mind paying more there as all the moenies goes to him and his family.. Keeps them eating and making games which keep them happy, which in turn keeps me happy as Ican continue to buy and play his games..:)

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  25. It's not punishing, it's economics. I don't plan to buy from Steam, and I don't mind paying $20. I think people should stop whining about prices and be grateful they can get a high quality game for less than $65.

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  26. Some of the arguments remind me of way back when I was struggling to make a living doing theatre and we had to charge 8-15 bucks per seat. people would complain they could go and watch a movie for that kind of money. Yeah, well. It's incredibly hard to attach a fixed price to anything to indicate its true value, sometimes it's even harmful.
    I will continue to support Jeff in his cause on his website for various reasons. First I am grateful that he's bee around for such a long time making awesome games for the Macintosh. Second, think about the huge discounts for any remake of a game you have purchased there. You're not very likely to get that through the App Store or Steam.

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  27. I'm playing Avadon now, and I'm glad you brought up this issue--it's been troubling me a great deal! I can get a steel broadsword from Charon in Holklanda for much less than at my base in the Black Fortress. You are punishing my game character! (lol)

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  28. The problem was, and maybe still is, that Jeff's games, until recently, were not available elsewhere, so how the hell where you supposed to know they were cheaper on those sites. I will not be purchasing from his website because I'm sure his kids are just fine with what they have, and you know, if we're all obsessed with capitalism, we really should care only about price. Jeff goes on about feeding his family, which is great, but why are you guys acting like giving him extra money is an act of charity. He's said so himself that it's all about the green, yet for his fans it's somehow all about riding his dick.

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  30. Anecdotal case of potential indie profit lost in the system: I found Avadon on Steam, saw it was an indie game and read some article mentioning money, thought, "Hey, maybe I can buy it direct from the Spiderweb website and all the profits will go to them," saw it was 2.5 times more expensive there, gave up and went back to Steam to buy it. My case might be unusual (?) but it can happen.

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  31. Hey Jeff, someone just found Geneforge 1-5 in the registry files for Steam. Any comment? *wink wink nudge nudge*

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  32. This comment has been removed by the author.

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  33. Avadon on iPad for three quid? Um, yes. So now I've bought it twice (well, will have bought it twice once I get home), once on Steam and once on iPad. Pfft, only having it available at your website? Madness - how was anyone supposed to buy your games multiple times?

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  34. I bought Avadon on Steam for $10 when it was first made available there.

    I haven't played it yet. It was an impulse purchase.

    I've been playing Spiderweb games since the first Exile demo when I was a kid too young to have real money to buy games. Avernum 3 was the first Spiderweb game I actually bought, followed much later by Geneforge 5 and Avernum 6.

    But for each of those games, I played the demo, and then played the game far beyond the demo. For a bunch of the other games, I played the demo for a while and didn't buy, or didn't even try the demo.

    Avadon is the first Spiderweb game I bought without playing, and still haven't played after I paid real money for it. I'm sure I'll play it sooner or layer, and I'll love it. But I bought it without even trying it.

    Make of that what you will.

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  35. You market segmenter you. LOL.

    Market segmentation works, as long as your customers don't find out about each other :P

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  36. what i think the formula is very simple the more quantity than demand means the cheaper price.

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  37. I'm glad I found this blog. I felt really awkward about the fact that I was impulsively drawn to Avadon on steam... and I totally missed the fact that it was a SPIDERWEB game. (no wonder it made my nerd-sense tingle). Love the games.

    But after seeing this blog, I'm sure to buy it from the website. (i get paid tomorrow!)

    My 2 cents on the cost differences: If I want the whole game, and nothing but the game, I can pay 20. If i want the game, but have to suck Valve's massive bloated... ego for the privilege? No thanks. Don't even get me started on iTunes. (long time apple fan)

    I'm still pissed at all the games on iOS devices that I can and will never play on my desktop. What a waste.

    Keep making awesome games, Jeff. Charge what makes sense and keep RPGs alive! (they are a dying beast)

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  38. I am glad you are reducing prices. I have looked at your games a number of times, played a number of the demos years ago, and and often considered buying them, but never have, for one reason: the price. $10 on Steam was definitely a move in the right direction. I play and enjoy games like Avadon, but I also play and enjoy many other games that are available for way less than Avadon, let alone at the same price.

    I have read some of your posts/articles on why niche game designers need to charge more for their games, and maybe you're right, or maybe you were right (and things are changing with the advent of Steam etc)--I don't know. But from a potential customer's perspective, the fact that your game is niche doesn't make it more valuable in his eyes (if anything the fact that he is less likely to meet other people who play it makes it less appealing), so why should he have to pay more?

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  39. That's the worst part to be a gamer. The prices of the games. We spend so much money upgrading our computer to they can run all kind of games and then we have to spend more money buying the games.
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  40. Watching other indie devs, like Frictional games who made Amnesia, their blogs have said a couple times that the prominent Steam sales were their highest revenue days of the product.
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