For my first blogpost in english, let’s first thank my kindle touch and the klip me plugin allowing me to send quickly any article I find on the web to my kindle touch. I’m not fond at all of reading long articles on my computer screen so these two change things a lot !
As a wannabe producer and now junior associate producer, I come from an economics background and, as such, I’m fascinated by interactions between elements, human or not. So, when you begin in an industry, you want to understand it, right? Well at least for me, even if there’s never one answer, I love to discuss possible explanations.
It all started 3 years ago when 2D Boy did their « Pay what you want » operation for the first anniversary of World of Goo. I wrote about it (here, only if you want to practice your french) and was very excited about this new way of selling games. I felt at the time that things were changing but I had no idea where it would go. Now I think I understand better what is going on and please feel free to comment to feed my curiosity or show me something I missed!
FM 2012 requires Steam to play – Eurogamer
« Make no mistake, if a quarter of the people that usually pirate the game switch to purchasing Football Manager 2012, the sales of the game worldwide would more than double. This would lead to increased development budgets and more benefits for all of you who do buy the game.
The Android piracy problem – Gamasutra
« The piracy rate for Shadowgun was actually even higher, » she tells us. « It reached 90 percent, then after a few months decreased to 80 percent and now it is falling bit by bit and averaging at 78 percent. Being sold for $8 and $5 later, there was no effective way of defending against piracy. »
(…)
« Piracy will never go away though – it hasn’t on any format in the last 30 years. »
So, it seems like some people are not really satisfied with the actual situation with piracy, hu? One thing that I keep from my economics studies is that if one market isn’t functioning right then another one naturally puts itself in place, as in « if everyone in this market were satisfied, then their wouldn’t go elsewhere making things another way ». With this in mind, let’s focus on this:
A simple demand curve. This shows how a reasonable person reacts when choosing to decide or not to buy products. The lower the price, the more you buy, right? If your price (the price you are OK with buying this game) is 10$ and now you can buy the game for 5$, will you buy two of it? Not necessarily but it is not impossible you would buy multiple copies for friends or families, because we love to share what we love! « Here, I got you this game which is awesome, try it and let me know! »
Even if you don’t buy two games (because you don’t like to share or you don’t have any friends), the cheaper the game is the more incented you are to buy it. If we take a quick look on the datas of pay-what-you-want with World of Goo, we kind of have the same curve:
First graph showing downloads for prices between 0 to 10$ – click to enlarge
Second graph showing downloads for prices over 10$ – click to enlarge
Spikes are due that I had to take the medium each time as they didn’t release über specific datas. I guess with specifics it would be a bit smoother but not much more, most important spikes are at 10cts (minimum), between 1 and 2$ (so 1.5$ here), 5.5$, 10.5$, 15.5$ and 20.5$… That cleary shows how used to some prices we are when we buy games!
My point here is that depending on a lot of parameters, we are willing to pay a certain price for each game at some point. Sometimes we don’t even want to pay as we just want to try! Stories of R4 DS cards full of games never played…
So, how is that a problem for the industry? Well…
E3: How to Find Out the Key Facts – GI.Biz
In the end, not every product will succeed despite the expenditure of vast marketing budgets. Massive marketing money can help a mediocre game, but it can’t turn a dog into a show horse. Game quality will ultimately determine the maximum potential sales of a game. Marketing can help the game reach that maximum, but never to exceed it.
The Indie Reality in 2012 and Beyond, According to Arkedo – Gamasutra
There’s never been so many indie successes, and people are still trying to do the same old thing with more money and more boobs. Well, boobs are awesome, I personally think, but that doesn’t make a game.
Is cloud gaming the future? – Eurogamer
A lot of the businesses in this industry, their whole business model is defined around predicting how many units they’re going to sell. It’s all about their forecast. That’s how they decide on what investments to make and how big the investment is.
(…)
« We have moved away from having set release dates, which are largely announced for to kick-off presales, or for shareholders and retail distributors. Now we don’t plan a release date until the game has reached a quality level where we feel comfortable doing so. « Retailers require a six-month lead-in to reserve shelf space for indies, and that’s if you can get in. By contrast, with Sins of a Solar Empire: Rebellion, we didn’t set a release date until after the public beta feedback was universally positive. »
Video game developers are frustrated by something that, I guess, could be summarized like that:
But sales’ predictions is kind of biased or missing something, right? « This all piracy thing is really shrinking sales and thus games’ budget, we just need more marketing and more boobs to secure revenues! » I mean that’s really the only way we could address piracy… DRM and boobs?
Steam sales: How deep discounts really affect your games – Gamasutra
His 2D dungeon crawler The Binding of Isaac, for example, saw sales multiply by five when it was marked down by 50 percent, and once it hit the front page as a temporary « Flash Deal » (for 75 percent off), sales multiplied by sixty.
Believe it or not, those figures aren’t all that unusual. Valve’s director of business development, Jason Holtman, says plenty of developers have seen their sales increase exponentially, giving them a very healthy boost in revenue.
« It’s not uncommon for our partners to see [a] 10-20 times revenue increase on games they run as a ‘Daily Deal.’ Some titles really take off and see as much [as a] 70-80 times increase in revenue, » Holtman said.
So, by moving the price down we are actually making more money? Ok that was a captain obvious one. Keep in mind the curve.
GameStop to game devs: Please love us – Gamasutra
Company president Paul Raines draws the stats from his holster, saying that 70 percent of income that gets handed over to consumers for traded goods is immediately spent on new games. That’s a $1.8 billion injection into the games industry.(…) People generally hang on to new games for at least six weeks, the execs say.
Second hand market is also often pointed as the bad guy but turns out it really helps players buying new games cheaper. Again, a malfunctioning market creates a new one here, a cheaper one. But still, not cheap enough as the highest point in the world of goo chart was 0$… Making games for free?
GDCE: Companies ‘too attached’ to business models - Develop
« When you set up any price there are only a certain amount of people who are ready to pay this price. It’s a very narrow corridor. »
For Victor Kislyi, this amounts to building a barrier between consumers and your game.
« The people who are not willing to pay $60 or $10 a month for subscription or 99 cents per mobile app, you lose them, » he said.
« They don’t enter, ever. They never have a chance to look at your game, to enjoy it for a day or a week. The set price does not cater to those who are willing to pay less, but interestingly you also reject those that are willing to pay more. There are people who would pay for a box of Starcraft for $300 but you’ve lost them. »
The advantage of free-to-play is that by removing this barrier of entry, your audience is automatically widened, and even if only a small fraction pay, it’s still going to be a good harvest for any developer.
What is said is that, basically, free to play allows your game to reach any point of the demand curve.
Freemium is not shareware – Gamasutra
Not unlike the old arcades, some players spend lots of money and some endlessly eke out the value of one credit. Some even actually want to give you their money just because they like you, but if you haven’t set up a way for them to do that then that money is just lost. Why charge $2.99 for an upgrade when you could charge $19.99, for example? Why, if it bothers you that much, not have a flexible pricing scale where they can buy the upgrade at whatever level they desire?
So now players can pay whatever they want for a game they like. Sounds too magical?
This might be Steam Greenlight’s biggest problem – Gamasutra
We’ve seen on multiple digital storefronts what happens if discoverability isn’t tackled. If your game isn’t in a top 25 list, or if, when your game first launches, no one instantly notices it, it is likely doomed to sit at the bottom of a huge pile of titles, festering away, garnering one or two downloads here and there.
Steam’s storefront already has a number of options in place that do a fairly OK job of bringing lesser-known titles to light, from its daily deals to its top-sellers lists. Yet hundreds of titles — most prominently indie games — still sit in the Steam library and are barely touched, whether they are enjoyable experiences or not.
Valve’s Robert Walker recently said at the Develop conference in Brighton that discoverability is a problem that Steam has always had, adding that Valve « [doesn't] think it’ll ever be solved. »
Jason Holtman, Valve’s business development director, added that with Greenlight, he hopes that the community will help solve the discoverability problem through suggestions and a willingness to go a little deeper into the store. « We’re hoping you’re all going to solve that for us… it’s going to be interesting to see what happens, » he said.
Discoverability is one of the biggest issue nowadays. That’s why we have boobs and millions in marketing, to make sure players hear from the game and a part of these players will then buy the game.
What shall we do then?
Benchmark’s Mitch Lasky: The value of publishers « isn’t clear » – GI.Biz
« Everyone talks about discovery, but I really believe that great content finds its audience. »
Let’s just… hope? Like there would be a mysterious god helping great content?
Opinion: Embrace piracy as a joyful social activity – Gamasutra
Yes, players love sharing, playing and talking about free games. What a wonderful (and powerful) thing.
What I think is that we should use piracy as a way of communication and one tool for discoverability. Some did it, some are trying again now. 
I think in the long run, piracy can help. Yeah, it’s hard to be long term today in this industry, but I believe that if someone loved the game than one day he will pay, either for this specific game or the next one.
Plus, fighting it is definitely a lost battle and waste of money. It’s like fighting the thermometer when you’re being sick. Piracy is a response to something, as second market is, another market in place because the first one is not satisfying, At some point Valve said that piracy rates dropped in Russia when they started Russian localisation and local ways of billing. It is about pricing but also providing a service (ways of payment, localisation, backups, drm, cloud saving etc…).
I’ll let you with these two awesome articles and quotes as conclusions:
Lost Humanity 6: Killing Pirates – Eurogamer
1. HERE IS A THING I LIKE
2. DO I WANT IT? (YES)
3. DO I HAVE TO PAY FOR IT? (NO)
4. DO I WANT TO PAY FOR IT? (YES/NO)
5. YES: PAY FOR IT
6. NO: JUST TAKE IT FOR FREE
END
That’s it in a nutshell. And here’s the fundamental problem with the whole piracy issue. Publishers are focusing on dismantling Stage 6 of that process when they should be analysing decisions made at Stage 4.
(…)
We’re talking about people here, and people only pay for stuff if they love it, love the people who made it, or it’s so cheap that they don’t even question it.
Wait, Why’s Pirate Bay promoting an indie game? – RPS
“If people pirate games, it means they want to play it regardless of anything. Pirate Bay is one of the most visited sites in the Internet, and just having a torrent there is promotion for the game. I left a comment there, because I wanted people to know that I make games for a living, and that they are directly supporting me with each purchase.
I also realised that some people are unable to do that, since PayPal is not accessible in their country, or they don’t have a credit card, or just cannot afford it, because it’s worth their daily or weekly wage. So I went ahead and left few gift codes. It was not much, but I wanted to show that I understand. Some people contacted me asking for different means of supporting me too. I was really happy to hear that people actually care, and i think it shows that piracy is not bad at all. It’s just mis-perceived.”
(…)
“Piracy is a response, like a rebellion,” opined Sosowski. “When there is rebellion in an unspecified country, it has its reasons. These reasons should be identified and dealt with – not the rebellion itself. Major publishers should ask, ‘Why? What do you want? What can we change?’ I can see that they might be reluctant thinking that ‘talking to barbarians who steal our stuff is not an option’. But it is in their interest to do so. They could gather a lot of fans and satisfied customers if they took the right approach – aka, not fighting to death.”
