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Indie Game Pricing – Minecraft Creator Weighs In

Posted by Rampant Coyote on February 25, 2011

So how much SHOULD an indie game cost?

There’s a fun interview interview with the indie dude who’s made perhaps the biggest splash on the indie scene since a bunch of guys released a game called Doom on the unsuspecting public 17 years ago. You can check it out at Gamasutra:

Markus Persson on Bringing Achievements to Minecraft

He comments on a number of ideas – including adding achievements to Minecraft, and the possibility of moving it to the XBox. But I was particularly interested on his point about the price change. He notes, “We thought that when we moved the price up from 10 to 15 euros, we thought sales would decline by a third. But it was like the opposite — it went up from four to five thousand sales a day to ten thousand sales a day. It kind of went against everything that I’d be told by other developers.

Which developers? As counter-intuitive as it might seem, what I’ve heard from the veteran developers in the scene – the ones that actually, you know, produce and sell games – pretty much match this observation. As a customer, of course, I like to see prices come down. And temporary sale pricing – that works wonders.  I bought an insane number of indie games in November & December because of the holiday sales.

But for permanent pricing — within a certain “indie” range, it’s been demonstrated time and time again that lower prices often don’t often yield anything close to proportionally equivalent sales numbers. In general, after an initial flurry of new purchases, things often settle down to being just a little higher than they had been before.  And some developers have reported similar results to Persson’s … price increases astonishingly yielded higher sales.

I guess this explains why Jeff Vogel’s earlier Geneforge and Avernum games aren’t selling for $5 now. But then he’s talked about indie game pricing a few times before.

But this is really murky territory. I know people selling higher-quality, higher-priced games on the iPhone usually found themselves clobbered on sales.  Terry Cavenagh of Distractionware has expressed his regrets over the initial, overly-high price point of $15 for VVVVVV, and seems to feel it cost him sales in the long run.  And I’ve known some indie RPGs (besides Vogels) that seemed to get mired because they charged too much, in spite of having pretty high production values and targeting a niche audience.

So what accounts for the difference? I wish I had the answer, but I doubt anyone does – at least not the complete answer. I think to some degree, there may be something like the sale price idea here. A game that is undergoing changes and improvements, and receives an increase in price, may be perceived similarly to a game that has gone on sale. Get it now before the price goes up again, right?

There’s also a psychological effect people have based on price – it sends signals as to quality. If you see two games that appear similar, but one is $25 and the other is $5, what is your assumption on quality? We tend to make assumptions that there is a very good reason one game costs 1/5th as much as the other. I think that way too, and I should know better! I’ve worked for a “network marketing” company that sold a nutritional supplement that was – in my opinion – a quality product but WAY overpriced.

I guess in the end, suggesting the best price for an indie game is about like suggesting the best length for a piece of string. It really depends on the type and quality of the game, the size of the audience, type of distribution (and monetization, for that matter), and the market realities. While $15 might be too much for a retro-8-bit styled game like VVVVVV, it’d be a major bargain for a role-playing game like Eschalon: Book 2. But even though it’d be a tremendous bargain as low as $10, Eschalon: Book 2 probably wouldn’t sell on the iPhone at that price. At least not yet.

But as for me — well, I jumped in and bought Minecraft right before beta, because I heard that the price (and terms) were about to change. It often takes a time-limited bargain to get me to take action, too.

Filed Under: Biz - Comments: 8 Comments to Read

  • Andy_Panthro said,

    Pricing doesn’t tend to factor into my decisions as much as it used to, if I really want a game I’d pay good money for it. Mind you, I rarely buy new games, so the lower price point for indie and older titles isn’t going to hurt my pocket as much.

    Minecraft I bought pretty much as soon as I’d heard of it, and have never regretted that decision.

    I think your point about short-term pricing are the most important here though.

    I often see people in comments threads on this subject suggest that if every game was $5 or so, they’d buy far more games.

    However, with a short-time reduction in price often comes a burst of marketing, which will draw in plenty of people to see a game. If all games were at a reduced price, that burst of marketing would be gone, and all you’d have is a lower profit per sale.

    There’s also the fact that if you decide to sell a game that was $20 for $10, you have to sell twice as many copies just to make the same amount! If your potential market is only a few thousand people (who would probably buy your game at any reasonable price) then it is sheer folly to reduce your price unnecessarily.

    As far as mobile gaming goes, I have an Android based phone, and none of the games I’ve seen are worth any significant amount of money. They all seem to be rather basic, and indeed many tend to be the sort of thing you could find for free at places like Kongregate.

    I would happily pay $5-10 for a decent RPG or adventure game, but have found none.

    Perhaps the potential market for such things is not in the right place at the moment, since such phones are not as widespread as the attention from the media would lead you to believe.

  • Mark said,

    I would hazard a guess about the cause of that phenomenon. The exact price point doesn’t matter, and the implications about quality are not relevant to Minecraft in particular.

    Raising the price from €10 to €15 sent a signal. Specifically, it said “The price is going to increase further.” Suddenly, people have a stronger incentive to buy now rather than put it off.

    I think that the element of a game most relevant to its price point is visual fidelity. If a game looks expensive – lots of high-quality, unique assets – then people are going to feel better paying more for it. But I haven’t really developed this idea further.

  • Felix Pleșoianu said,

    Minecraft was already crazy popular when the price increased. People knew what to expect. Try that with a game that isn’t already selling like hot bread, and you’ll have a big nasty surprise.

    No, I don’t think people believe a game is better just because it costs more. They will read reviews, ask their friends, play the demo, and make a real decision. And some of them will decide the game is worth the money, but they can’t justify the expense. That is a fan you have lost. But that will be true for any price point, even $0.01.

    Don’t follow a formula blindly. Just as with anything else in game development, pricing is an art.

  • spate said,

    I think there are three reasons why sales increased. In order of relevance:

    1) The price increase signaled lowered risk. The game is closer to completion, and people still like it. The developer feels confident enough in his product being close to finished that he’s raised the price. And most importantly, people are still enjoying the product. All of this signals a lowered risk on the investment you make in the purchase price.

    2) Psychologically, a higher price means you get more stuff. “I spend more, I get more.” Since they’re always adding content, it’s also true in a way–you’re getting more today than you did a year ago.

    3) It went up once; it could go higher! Buy now before it goes up again!

  • SteelRiverSavior said,

    Just imagine all of the awesome games that would be made if somehow the entirety of humanity morphed to some neo-socialist paradise, where money was meaningless, yet somehow this never devalued people’s motivations or supplies. A world where anyone who wanted to make the game they wanted to make could get other people who shared his interest to make any kind of game they wanted, without being restricted by money….

  • Rampant Coyote said,

    Maybe if there are video games in heaven, that’s how it’ll work.

  • aa said,

    Gabe Newell on pricing (about 7 mins in)

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