XLA: The Price of Bitesize Games

here’s another bit i wrote in the joystiq.com comments that i should have just written over here. i guess, you just never know when the mood to “ponder” might strike.

here’s an interesting thing to ponder. so, how many copies would they have sold if it was priced at $10? not 45,000. but, the key question is would they have sold more than 22,500?

maybe i’m just a bonehead, but i’m a big fan of drop the price in half, sell three times as many. especially when there really is no distribution cost and your production cost is fixed.

how many outpost kaloki’s would they sell at $5? probably more than twice what they are selling at $10. i know i’d buy it for $5 (hell. that’s almost free!) but not for $10. same with joust. and, don’t even get me started for the price attached to a dumb billiards game.

i’m thinking all the arcade games should be $5. what’s the harm? devaluing “the zone?” well. last time i checked, yahoo games and pogo didn’t have an xbox live competitor. people who buy it on the pc aren’t going to buy it on live. and vice-versa. no matter the price difference.

so, microsoft, leave the pricing on the web games alone, but drop the pricing on xbox live. let’s just pretend it’s a loss leader to ride atop the popularity of something like geometry wars.

make the absolute highest price for an arcade game $10. drop the old arcade games to $5. (even street fighter 2) have your flagships like zuma and bejeweled stay at $10. in other words, use the same price ladder you do with retail boxed games.

of course, i guess with the ephimereal nature of live, they can just drop the prices at a whim if they don’t move product anyway, huh?

eh. i don’t know.

damn. i should be writing this on my site….

does “half the price, thrice the sellthrough” make sense in a digital distribution model? there’s just so little cost involved in the actual logistics of getting the piece to market (as opposed to traditional boxed retail games), but would it work?

i wish i had some hard numbers for steam or itunes or xbox live arcade.

m3mnoch.

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13 comments so far

  1. paradox on

    As logical as all this seems (and it really does) I think the actual matter is usually a lot more complicated somehow. Are you talking about downloadable content or what?

  2. vipnews on

    i guess he’s talking about downloadable content.. because he was talking about…ehm….naw…i’m confused:-(

  3. […] valve will start expanding. they’ll build in heavy steam support as they forge into the bleeding edge of all-digital publishing. they will, at first, press that they have a good engine, but, it also allows you to bypass any publishers. (is this a case of half the price, thrice the sellthrough?) more folks will license it and they’ll feed that cash back into engine development. it won’t be long before they are right on epic’s coattails as far as marketing as well as technology. […]

  4. m3mnoch on

    heh. sorry. i’m actually talking about distribution.

    part of the cost (and thus, price) of putting retail boxes on shelves are all of the logistical parts along the way — packaging, printing, physical media, shipping. even the intangibles, like retail shelf space actually add on to cost.

    all of those costs multiply with volume. digital distribution does not. there is no detriment to having virtual inventory still in the stock room. so, arguably, since it removes any impediments of ‘high volume’ manufacturing, there is no ‘risk.’

    your only risk is the proverbial ‘leaving money on the table’ by pricing your goods too low.

    lower costs mean equal or higher margin sales on lower pricing. lower pricing means greater sellthrough. even lower pricing means make it up on volume — volume that has no penalties.

    where, exactly then, is the balance?

    m3mnoch.

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