Game Devigner » economy

The Debate

Paolo — Sat, 18 Jul 2009 05:21:43 +0000

Jack Thompson vs. Mark Menthenitis

I don’t know about you, but Jack Thompson sounds the most reasonable when not filtered through the liberal media like Kotaku.

Neither liberty nor the free market can be sustained without a virtuous people.

The Price is Right

Paolo — Sat, 21 Feb 2009 01:21:08 +0000

The Escapist Magazine (of Zero Punctuation fame) recently put out a series of articles about piracy. One of the articles I thought that was very interesting was one about the culture in Brazil where practically every piece of software available for sale is pirated. This is very true in Asia as well. But it was the price point that caught my eye:

The asking price is ridiculously small – usually around R$10 to R$15 (or $5 to $7.50) – but after a little negotiation, you can easily end up paying half that. You won’t, of course, receive a receipt; instead you might be giving a business card with the name of the game you purchased written on the back, with the promise that you’ll be able to exchange the game in that store if it proves to be faulty.

In general, there is speculation that the price of software – even AAA title software is too high. Valve experiemented with Left4Dead by lowering it’s price point to see how much sales increases occurred at different price points:

10% Price Reduction – 35% Revenue increase
25% Price Reduction – 245% Revenue increase
50% Price Reduction – 320% Revenue increase
75% Price Reduction – 1470% Revenue increase

Note: This is revenue increase – not number of units sold. The profits shot through the roof as the price came down.

I’m estimating that the correct price point for indie games is somewhere in the $3-$5 range. This undercuts pirate prices.

In a bad economy, people will be seeking the most value for their dollar. Games offer far more value than a movie because of replayability. Therefore, a game that outprices books, comics, and even rental movies will do very well in this downturn economy.

Trying Too Much?

Paolo — Fri, 20 Feb 2009 06:04:37 +0000

One of the major setbacks about the big-AAA gaming companies is the risk of increasing production values with little return on investment. The obsession with movie-quality realism in games comes to a screeching halt the moment it comes to the question of whether or not the wrinkle detail on your character’s face (which took an artist a week to perfect) ultimately makes a difference when it comes to the profitability of your game.

In the words of the recently deceased “Ensemble Studios” creator of “Age of Empires” and “Halo Wars”:

“I think we may have tried to do too much with each game,” Shelley admitted, saying designers tend to suffer from that mentality across the board. The company used its last game, Halo Wars, as a chance to try and take a more stripped-down design approach.

Admittedly, high production values do sell in numbers. The question is whether it sells enough.

The question becomes even more embarassing when you check the profitability vs. production cost ratio of games that look like this:

Bejewelled 2 by PopCap Games