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Poll: How much pricing model is hurting MMORPG's?

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Comments

  • PhelcherPhelcher Boston, MAPosts: 1,053Member
    We don't want a better deal, we want better games...

    "No they are not charity. That is where the whales come in. (I play for free. Whales pays.) Devs get a business. That is how it works."


    -Nariusseldon

  • PhelcherPhelcher Boston, MAPosts: 1,053Member
    Originally posted by jpnz
    Originally posted by Phelcher
    Originally posted by jpnz
    If something cost less, more people will buy it. This isn't exactly rocket science. ROFL!

    No.. then more people CAN afford it.

    If a nice moist turd cost $600 bucks... would you buy it? OK, what if that was reduced to $6 bucks..?

      

    Only children and adolescent youth spend habitually on $7 turds...    (convincing themselves it isn't a turd)

     

    This is a pretty illogical ad hominem attack but lets see how far down the rabbit hole we can go. :)

    If a Ferrari cost $6, would people buy more Ferrari's? Yes? So... logic?

     

     

    Sorry, there is no constant in your argument. As a Ferrari cost more to make, so your rebuttal is illogical.

     

    Secondly, everyone wants a Ferrari for free... and it's not a sustainable business.  So why would anyone want to drive a turd.. just because they can't afford a Ferrari..?    Let-alone pay $5 for the turd ..? 

    (Why pay for anything in a free game... )

    "No they are not charity. That is where the whales come in. (I play for free. Whales pays.) Devs get a business. That is how it works."


    -Nariusseldon

  • VelocinoxVelocinox Old Folks Home, CAPosts: 808Member Uncommon
    Originally posted by Axehilt
    Originally posted by Velocinox

    If cost is always the primary factor in sales...

    I am sure Microsoft will skyrocket sales of the XBOX 360 by lowering its price to $199.99

    If you had some perfectly preserved beef from the time of mad cow disease, you would make a bundle selling it for $1.99 a pound instead of $6.99 a pound even if it is both fresh and healthy.

    Why is the Galaxy S4 still the best selling smartphone when Samsung slashed the price of the S3 to 20% of retail?

    Do some research and look up Salton Sea resort prices from the late 1950s. 

    Price drops do not universally increase sales. You are completely wrong in this. In the MMO industry game quality trumps price. You cannot sell a terrible game for $5 faster than a great game will sell for $50 plus $15 a month. 

    Luxury Good:

    Investopedia: "An item that is not necessary for living, but is deemed as highly-desired within a culture or society. The ability to purchase or finance a luxury item is directly proportionate to ones' income or assets. In other words, as people move into higher income brackets they are more able and more likely to purchase more expensive luxury goods.

    Luxury items are also known as "positional goods" because they signal that the owner has achieved a certain position or status within society to be able to afford them."

    Wikipedia: "Luxury goods are products and services that are not considered essential and are associated with affluence."

    BusinessDictionary.com: "Products which are not necessary but which tend to make life more pleasant for the consumer. In contrast with necessity goods, luxury goods are typically more costly and are often bought by individuals that have a higher disposable income or greater accumulated wealth than the average." 

    All of them include the fact that they are typically reserved for those with greater income than average. There is nothing affluent about MMO prices, which means they are optional expenses but not luxury goods (services). You are wrong on this as well. 

    You keep trying to prove what has already been established and incorrect, and instead of helping your argument, you add more things you are incorrect about. 

    A lot of what you're saying indicates you haven't been paying attention at all.  Please read what's being said.

    No, I have read every word of every post you have made in this discussion... EVERY. I have made counterpoints to everything you have said. I even broke your posts down into paragraphs and addressed each in detail. To make the claim that I haven't read your posts in the face of the plain evidence is commentary on the fact that YOU are the one that hasn't read this discussion and have just been making blind, uninformed, and in the end we discovered, incorrect assertions.

    To wit, here is my first post in reply to the OP...

    Originally posted by Velocinox

    Pricing doesn't make a difference. The game makes the difference. If it is fun and appeals to a wide audience it will succeed.

     

    Unfortunately, cash stores are here to stay. No matter the business model, Subs, F2P, or B2P it no longer matters. The industry will not pass up the revenues it has observed coming from the successful in-game cash stores.

    It simply comes down to how much of your life you are willing to hand over to publishers for a game, and how much it is worth to you.

    My point is clear from the start and I have never deviated. Game quality trumps price.

    And here is your reply...

    Originally posted by Axehilt
    Originally posted by Velocinox

    Pricing doesn't make a difference. The game makes the difference. If it is fun and appeals to a wide audience it will succeed. 

    Unfortunately, cash stores are here to stay. No matter the business model, Subs, F2P, or B2P it no longer matters. The industry will not pass up the revenues it has observed coming from the successful in-game cash stores.

    It simply comes down to how much of your life you are willing to hand over to publishers for a game, and how much it is worth to you.

    Pretending elasticity doesn't exist, forgetting it exists, or being ignorant of its effects, doesn't mean it isn't a factor.

    Price obviously has the potential to make a huge difference in MMORPG revenue.  The problem being that they can't easily test different price points with the exact same product, to find where the local maxima is for maximizing revenue.  So we can't say for sure that the increase in sale (count) from a lower price point would actually generate more total revenue, or that a higher price point would or wouldn't make more revenue despite fewer sales.  Not without actual experiment results on exactly the same product.

    Where you go on condescendingly about price elasticity, when as I have proven over the last dozen pages doesn't affect the sales more than game quality does. And you have made the attempt in the last half-dozen pages to weasel your point around to make it right, when you know your original post was wrong in reply to my point.... bottom line.

     

    For example, I don't know where you got this "primary factor" nonsense.  It's a factor, period.  Sometimes it's the primary factor, sometimes not.  But it's always a factor.  It always matters to some degree, because nobody has infinite money to be able to afford the good at every price.
     
    I addressed the 'some degree' aspect as well. when I mentioned the pebble in orbit affecting Earth's tides. everything affects everything else to some degree but we don't bring that up as a refute to an obvious point. Neutrinos from the sun affect the Earth's mass, but we don't spend hours figuring out their implications when we go to dig a ditch.
     
     
    Another example, you somehow thought someone in this thread was saying a lower price is always the best price.  Price always changes the number of people willing or able to make purchases, but lowering a price isn't universally the right choice.  Nobody claimed that.  Quite the opposite, I clearly stated my hunch is $7 wouldn't be worth it!  (But that we don't have enough information to know for sure either way.)
     
    YOU have made this point, over and over in this thread, not me. As in this post you are now saying you never made...
     
    Originally posted by Axehilt

    Do you think every player is plunking down $300 for a lifetime subscription?  Then obviously price matters.   Not everyone was interested in that product at that price.

    And that product (lifetime sub) is much different from a single month of subscription, so it doesn't represent sufficient price experimentation to figure out what the right price of a single month's subscription is.

    $15 vs. $1 subscription price would have a huge impact on subscription sales.  That's like the most basic of economics, man.  It matters, and it matters a lot!

    By the way it's rather ironic that the type of high-income consumer you're describing (who would be willing to pay very high sub fees) is a perfect example of price elasticity.

     

    But now you are saying you agree that the price wouldn't be a major aspect? What is your point? I don't think you have one other than winning an internet argument. The truth is, the audience is so starved for a fun MMO that pricing is the LAST of the publisher's concerns in the long run.

     
     
     
    Lastly, are you trying to imply that for the millions of people in the world living on or near the bread line MMORPG subscriptions are something they can  easily afford?  For many, possibly even most, it's a luxury good.  It's something where the price prevents the product from getting into the hands of people who -- were they able to play -- would be interested in playing.
     

    Nobody was talking about 'bread line' income. I stated early on that we're considering developed nation economies, as written in this post on the third page....

    Originally posted by Velocinox

    You're missing the point. More people would buy a $130,000 Maserati for $35,000 than both of your examples combined.

    The perceived value trumps minor (and MMO subscriptions are minor to most developed-world consumers) increases in price.

    A fun game will sell at any price point within current industry range. The deciding factor when the price difference is so minimal is quality of the game expressed in perceived value.

    This is just another in a long line of attempts by you to stretch the discussion into inconsequential hyperbole to try and help your already sunk point have merit.

     

    Now, obviously I HAVE read your posts. I know what this topic is about and I know when you are just making things up as you have in this latest post. Show some dignity and walk away with the lesson learned.

    'Sandbox MMO' is a PTSD trigger word for anyone who has the experience to know that anonymous players invariably use a 'sandbox' in the same manner a housecat does.


    When your head is stuck in the sand, your ass becomes the only recognizable part of you.


    No game is more fun than the one you can't play, and no game is more boring than one which you've become familiar.


    How to become a millionaire:
    Start with a billion dollars and make an MMO.

  • ShadanwolfShadanwolf Posts: 2,114Member Uncommon

    I'm playing a mmo atm that is nickle and dimeing me to death

    Small packs(unless you want to pay cash for some more slots) is making me crazy aas I have to discard items because I'm not near a shop to sell them.Sooo i'm stopping playing that game(which is currently in beta). I've posted my "concerns". We'll see what changes come at 9/18 launch.

    So..yes.There's pricing and then there's poor pricing decisions.

  • AxehiltAxehilt San Francisco, CAPosts: 8,682Member Uncommon
    Originally posted by Velocinox

    Now, obviously I HAVE read your posts. I know what this topic is about and I know when you are just making things up as you have in this latest post. Show some dignity and walk away with the lesson learned.

    No, you're not reading because you're either drawing completely incorrect conclusions (the two examples I listed last post) or you're missing the very basic core concept I've been trying to convey: that pricing matters.

    You: "Pricing doesn't make a difference."

    That's just a flat-out incorrect statement, as I've hammered on time and again.  At least now with your recent posts you've backslid into it not mattering "more than game quality", so at least I've been able to get you to concede that pricing matters.  Instead of trying to pridefully disagree with my first response to you, you should've simply agreed with it, "Oh yeah, you're right. Pricing does make a difference, but I feel like game quality is a bigger factor."  That would've been logical and been a pretty solid opinion to hold.

    Your "pebble in orbit" comments might be appropriate if we were talking about a 5% change in price (from 14.99 to 14.24) but we're not.  We're discussing pricing in general, and most commonly a change from $15 to $7!  That's 54% off!  Such a huge change in price will obviously have far more than a "pebble in orbit" affect on sales, and is very likely to also have a big affect on total revenue.

    Your "pebble in orbit" is also the only thing we're talking about.  We're not talking about multiple games.  We're talking about picking one game, and will it do better at $7 or $15?  So the other factors you think are so huge aren't even part of the discussion.

    My "the lower price isn't always the best price" is really clear, but you don't seem to be able to split out two separate concepts:

    • Sales.  The raw number of transactions.  At a lower price, more sales will happen.
    • "The best price."  The number which optimizes total revenue (which is sales * price)
      • Basically by definition the lowest price isn't the best price, because the lowest price is $0 and you'd make $0 revenue.
      • Price has a massive influence on total revenue (clearly, if it can make a game earn $0!) but finding the best price requires experimentation at different price points with the same exact product.
    Your "nobody was talking about 'bread line' income" is part of why your posts feel so short-sighted.  It's a discussion about price!  Different price points will enable new potential payers to pay.  So while people specifically on the bread line may not ever be a market for MMORPGs, the people just above it are.  And right now those people aren't willing and able to add another $15 to their monthly budget.  But there are undeniably some people where $7 to their monthly budget is possible.  It's those people who are potential new customers which would increase the subscription sales of a MMORPG which lowered its price.
     
    Again: is it worth it?  Would that be the best price?  We don't know. (Probably not.)  But it would increase sales, because these people are out there teetering on the edge and refusing to pay because the price is too high for them.
     
    Your Maserati example is meaningless because it's talking about a separate product.  This is a discussion about price.  Take the same Maserati and sell it for $75,000 or $130,000 or $200,000, and which price ends up being best for total revenue.  The discussion has always been about whether changes to pricing alone will improve MMORPGs revenue.

    "Joe stated his case logically and passionately, but his perceived effeminate voice only drew big gales of stupid laughter..." -Idiocracy
    "There is only one good, knowledge, and one evil, ignorance." -Socrates

  • PhelcherPhelcher Boston, MAPosts: 1,053Member
    Originally posted by Axehilt
    Originally posted by Velocinox

    Now, obviously I HAVE read your posts. I know what this topic is about and I know when you are just making things up as you have in this latest post. Show some dignity and walk away with the lesson learned.

    No, you're not reading because you're either drawing completely incorrect conclusions (the two examples I listed last post) or you're missing the very basic core concept I've been trying to convey: that pricing matters.

    You: "Pricing doesn't make a difference."

    That's just a flat-out incorrect statement, as I've hammered on time and again.  At least now with your recent posts you've backslid into it not mattering "more than game quality", so at least I've been able to get you to concede that pricing matters.  Instead of trying to pridefully disagree with my first response to you, you should've simply agreed with it, "Oh yeah, you're right. Pricing does make a difference, but I feel like game quality is a bigger factor."  That would've been logical and been a pretty solid opinion to hold.

    Your "pebble in orbit" comments might be appropriate if we were talking about a 5% change in price (from 14.99 to 14.24) but we're not.  We're discussing pricing in general, and most commonly a change from $15 to $7!  That's 54% off!  Such a huge change in price will obviously have far more than a "pebble in orbit" affect on sales, and is very likely to also have a big affect on total revenue.

    Your "pebble in orbit" is also the only thing we're talking about.  We're not talking about multiple games.  We're talking about picking one game, and will it do better at $7 or $15?  So the other factors you think are so huge aren't even part of the discussion.

    My "the lower price isn't always the best price" is really clear, but you don't seem to be able to split out two separate concepts:

    • Sales.  The raw number of transactions.  At a lower price, more sales will happen.
    • "The best price."  The number which optimizes total revenue (which is sales * price)
      • Basically by definition the lowest price isn't the best price, because the lowest price is $0 and you'd make $0 revenue.
      • Price has a massive influence on total revenue (clearly, if it can make a game earn $0!) but finding the best price requires experimentation at different price points with the same exact product.
    Your "nobody was talking about 'bread line' income" is part of why your posts feel so short-sighted.  It's a discussion about price!  Different price points will enable new potential payers to pay.  So while people specifically on the bread line may not ever be a market for MMORPGs, the people just above it are.  And right now those people aren't willing and able to add another $15 to their monthly budget.  But there are undeniably some people where $7 to their monthly budget is possible.  It's those people who are potential new customers which would increase the subscription sales of a MMORPG which lowered its price.
     
    Again: is it worth it?  Would that be the best price?  We don't know. (Probably not.)  But it would increase sales, because these people are out there teetering on the edge and refusing to pay because the price is too high for them.
     
    Your Maserati example is meaningless because it's talking about a separate product.  This is a discussion about price.  Take the same Maserati and sell it for $75,000 or $130,000 or $200,000, and which price ends up being best for total revenue.  The discussion has always been about whether changes to pricing alone will improve MMORPGs revenue.

     

    LOL^

     

    We are not talking about anyone, we are talking about people whom have a hobby. Same type of people who spend thousands on their other hobbies...  like drag racing, boating, camping, backpacking, paintball, etc..

     

     

    Secondly, you have no clue what Velocinox is saying, do you..?  Quality establishes price..

     

     

    Cheap game.. cheap price.

    No amount of making it cheaper will bring more customers in. It is called the cost of diminishing returns. Free games pull in tons of free gamers. All of them put a load & stress on your servers, only a few whales buy. Eventually the pyramid scheme topples and your left with closed doors.

    "No they are not charity. That is where the whales come in. (I play for free. Whales pays.) Devs get a business. That is how it works."


    -Nariusseldon

  • AxehiltAxehilt San Francisco, CAPosts: 8,682Member Uncommon
    Originally posted by Phelcher

    We are not talking about anyone, we are talking about people whom have a hobby. Same type of people who spend thousands on their other hobbies...  like drag racing, boating, camping, backpacking, paintball, etc.. 

    Secondly, you have no clue what Velocinox is saying, do you..?  Quality establishes price.. 

    Cheap game.. cheap price.

    No amount of making it cheaper will bring more customers in. It is called the cost of diminishing returns. Free games pull in tons of free gamers. All of them put a load & stress on your servers, only a few whales buy. Eventually the pyramid scheme topples and your left with closed doors.

    This isn't complicated.

    The thread is about whether MMORPGs would do better at $7 or $15.

    • To even discuss the topic, we have to assume additional potential customers are going to start paying for a $7 subscription compared with a $15 one.  So obviously we're discussing more than just existing $15 subscriber base hobbyists.  And yes, it would bring more customers in because that's how economics works.
    • It's a no-brainer MMORPGs should strive for better quality, but that's not what this thread is asking.  This thread is about whether MMORPGs would do better at $7 or $15, which implies "Does price-changing matter...with the same game?"

    "Joe stated his case logically and passionately, but his perceived effeminate voice only drew big gales of stupid laughter..." -Idiocracy
    "There is only one good, knowledge, and one evil, ignorance." -Socrates

  • simmihisimmihi -Posts: 615Member Uncommon

    I'd like to see a system with 3 different prices for subscribers.

    $5  -    Sub1 = access to game and the basic features, 2 active character slots, 20 AH slots, full death penalty

    $10 -   Sub2 = Sub1 + convenience stuff like instant travel instead of fast travel,  50% death penalty, 10% XP boost, 3 active character slots, 30 AH slots

    $15 -   Sub3 = Sub2 + additional 10% XP boost, 5 active character slots, unlimited AH slots, no death penalty

    Something like this, features not set in stone obviously, you get the idea. In these days, a lot of people like to play more games at a time. If i spend 2-3 hours per day, i find a $15 price justified. If i end up logging in only for a raid two times per week, because that's the only thing I enjoy in that game, then $15 is a bit much.

  • LoktofeitLoktofeit Stone Mountain, GAPosts: 13,633Member Uncommon
    Axehilt, you're a trooper, man. image

    There isn't a "right" or "wrong" way to play, if you want to use a screwdriver to put nails into wood, have at it, simply don't complain when the guy next to you with the hammer is doing it much better and easier. - Allein
    "Graphics are often supplied by Engines that (some) MMORPG's are built in" - Spuffyre

  • SpottyGekkoSpottyGekko RotterdamPosts: 3,845Member Uncommon
    Originally posted by Axehilt
    Originally posted by Phelcher

    We are not talking about anyone, we are talking about people whom have a hobby. Same type of people who spend thousands on their other hobbies...  like drag racing, boating, camping, backpacking, paintball, etc.. 

    Secondly, you have no clue what Velocinox is saying, do you..?  Quality establishes price.. 

    Cheap game.. cheap price.

    No amount of making it cheaper will bring more customers in. It is called the cost of diminishing returns. Free games pull in tons of free gamers. All of them put a load & stress on your servers, only a few whales buy. Eventually the pyramid scheme topples and your left with closed doors.

    This isn't complicated.

    The thread is about whether MMORPGs would do better at $7 or $15.

    • To even discuss the topic, we have to assume additional potential customers are going to start paying for a $7 subscription compared with a $15 one.  So obviously we're discussing more than just existing $15 subscriber base hobbyists.  And yes, it would bring more customers in because that's how economics works.
    • It's a no-brainer MMORPGs should strive for better quality, but that's not what this thread is asking.  This thread is about whether MMORPGs would do better at $7 or $15, which implies "Does price-changing matter...with the same game?"

    Axe, you seem to be single-mindedly pursuing this point, regardless of it's meaning.

     

    What do you mean by "the game will do better" ? More players or more revenue ?

     

    Because if you define it as purely "more players", then there's no doubt you're correct in saying $7 will be "better" than $15.

    But if you're implying a 50% drop in sub fee will generate MORE than 100% extra subs, then you're dead wrong. It has to be more than double the player number, otherwise there's no change in total revenue (whilst most definitely an increase in overheads).

     

    I don't believe that there's a significant amount of people who feel so strongly about $8 that they will not play a game they would have enjoyed playing if they were prepared to pay $15. The amount is trivial, unless you want access to multiple MMO's simultaneously.

  • PhelcherPhelcher Boston, MAPosts: 1,053Member
    Originally posted by Axehilt
    Originally posted by Phelcher

    We are not talking about anyone, we are talking about people whom have a hobby. Same type of people who spend thousands on their other hobbies...  like drag racing, boating, camping, backpacking, paintball, etc.. 

    Secondly, you have no clue what Velocinox is saying, do you..?  Quality establishes price.. 

    Cheap game.. cheap price.

    No amount of making it cheaper will bring more customers in. It is called the cost of diminishing returns. Free games pull in tons of free gamers. All of them put a load & stress on your servers, only a few whales buy. Eventually the pyramid scheme topples and your left with closed doors.

    This isn't complicated.

    The thread is about whether MMORPGs would do better at $7 or $15.

    • To even discuss the topic, we have to assume additional potential customers are going to start paying for a $7 subscription compared with a $15 one.  So obviously we're discussing more than just existing $15 subscriber base hobbyists.  And yes, it would bring more customers in because that's how economics works.
    • It's a no-brainer MMORPGs should strive for better quality, but that's not what this thread is asking.  This thread is about whether MMORPGs would do better at $7 or $15, which implies "Does price-changing matter...with the same game?"

     

    Bro, you are getting rather embarrassing at this point. You know just enough about Micro/macro economics to discuss, but have no understanding of their inner workings.

    So, what MMORPG are you talking about @ $7  vs  $15.  Any arbitrary game, or an exact one?

     

     

     

    Your question alone implies you do not understand economics.  Don't even mention a game then, mention a widget and take up some classes and learn. 

    Tic-tac-toe wouldn't bring in anyone at $7, so asking $14 would be stupid.  People playing in a premier Tic-Tac-Toe league will most certainly pay $15/month, to be amonst their friends and the elite players. 

    If you make it $7.. it doesn't mean 50% moAr people will pick up the game, it just means it cost less and those who were already thinking about TRYING, might now.  Those elite players might stop playing in that Tic-Tac-Toe league because now a bunch of mingers are playing and messing up the community...  so subscription drop.

     

    That is also plausible^  

     

     

    (& what happened to late EQ & WoW, as more children pushed the paying adults out of the game.)

    "No they are not charity. That is where the whales come in. (I play for free. Whales pays.) Devs get a business. That is how it works."


    -Nariusseldon

  • LoktofeitLoktofeit Stone Mountain, GAPosts: 13,633Member Uncommon
    Originally posted by Axehilt

    This isn't complicated.

    The thread is about whether MMORPGs would do better at $7 or $15.

    • To even discuss the topic, we have to assume additional potential customers are going to start paying for a $7 subscription compared with a $15 one.  So obviously we're discussing more than just existing $15 subscriber base hobbyists.  And yes, it would bring more customers in because that's how economics works.
    • It's a no-brainer MMORPGs should strive for better quality, but that's not what this thread is asking.  This thread is about whether MMORPGs would do better at $7 or $15, which implies "Does price-changing matter...with the same game?"

    I'm not so sure about your assessment. While many might be inclined to point to things like Steam to support the theory that more would buy at a lower price, we aren't talking about the purchase price for a new product. We're talking about the subscription price for an existing service.

    There are a lot of other factors involved here. While there are plenty that avoid buying a new game because of the sixty dollar box price, there isn't anything to support that people are avoiding subscribing to MMOs because of the fifteen dollar subscription price. There's also the fact that MMOs are at such a universally consistent price that a half price MMO would be perceived as a lower quality MMO when looked at by those customers one would be looking to bring in, especially because there's no manner by which they can tell how the MMOs are different. They look the same and have the same feature set, so the perception is the higher priced one must be of a higher quality. Another thing at play is the natural disposition people have toward avoiding difficult comparisons, further pushing the consumer away from the seven dollar MMO.

     

    All that aside, the OP takes a rather short-sighted view when he presents the question:

    "If for example FFXIV:ARR came free with $7 monthly sub, 100% I would've took that deal. What is better to sell something to 3 people for $7 or to sell the same thing to 1 person for $15?"

    As mentioned above, the price of an MMO is rarely a factor, so whether a person starts playing at seven dollars or starts playing at fifteen dollars, the impact of price on the decision to continue or cancel remains relatively the same.

    Acquisition is important, but conversion and retention is key. Even if a lower price did introduce a spike in people trying the game, funneling in more people at the low end doesn't really pay off when you're now investing far more in combating churn and raising your cost per acquisition.

    There isn't a "right" or "wrong" way to play, if you want to use a screwdriver to put nails into wood, have at it, simply don't complain when the guy next to you with the hammer is doing it much better and easier. - Allein
    "Graphics are often supplied by Engines that (some) MMORPG's are built in" - Spuffyre

  • TorvalTorval Oregon CountryPosts: 7,187Member Uncommon
    Originally posted by Loktofeit

    As mentioned above, the price of an MMO is rarely a factor, so whether a person starts playing at seven dollars or starts playing at fifteen dollars, the impact of price on the decision to continue or cancel remains relatively the same.

    Acquisition is important, but conversion and retention is key. Even if a lower price did introduce a spike in people trying the game, funneling in more people at the low end doesn't really pay off when you're now investing far more in combating churn and raising your cost per acquisition.

    I wouldn't say the price isn't or rarely is a factor, but when accepting how the product is packaged, the exact price point becomes secondary.

    For example paying a monthly bill for a game is more than I want to be required to spend, but if I were to spend that then $7 or $15 doesn't really matter, but I might think twice if it went up to $20 or $25 per month.

    If a game has a cash shop and I'm going to spend money I will buy however much I feel like spending so $10, $20, or $50, but I'm going to think twice before buying larger packages.  I might spend the equivalent of $5 - $15 on a mount (or some similar such thing), but I'll balk at spending $45 on that mount.  That is how PWE/Cryptic outpriced themselves for me.  I'm just not going to spend $45 on one companion for one character.

    So price, for me, is rarely the sole or primary factor unless it's completely out of my financial sensibilities, but it is a factor. Price could even be a factor in your last scenario.  People might buy a game for $60 and spend some cash shop money now and then (or not), but they might not buy it at all if they only way they can play is to constantly pay, even if the price of the one off payment is well within budget.

  • MorrokMorrok MunichPosts: 130Member


    Originally posted by Loktofeit
    I'm not so sure about your assessment.

    Actually, i think Axehilt is making the point in this dicussion.

    To *me*, what counts (after a trial time) is the the total cost of an MMO.
    This includes the box/download price (if any) plus the sub price, say for a year.
    Of course, the trial time is crucial for my decision to buy or not in the first place.

    Now, after that trial period there's the case when i say to myself "hmm... this game has some potential but isn't where i'd like it to be yet".
    In this case, sub price *does* matter if i support it by subbing anyways or not.

    If, on the other hand, the game offers "everything i want", then the sub price is not irrelevant but less important.
    Not irrelevant because there's still the total cost to consider and the "difficult comparisons" you were mentioning and that i talked about in the "would you pay more" thread.
    As long as the total cost would fall within my personal limit, i'd buy+sub.


    But since there's no MMO in existance that offers "everything i want", and *my* wants are different from the next player's, and MMOs kind of not only tend to but need to cater "the masses" (at least a crucial mass) to be successful, Axehilt's point of "best price" matters.

    You are correct, retention is what matters in the end.
    But acquisition is the key to retention.
    If you make the "hurdle" to try the game in the first place too high you're excluding some (or a lot, depending on how high that hurdle actually is) players.
    And by "try" in the meaning of the last sentence i mean *beyond* the usually free trial period, which might be enough to judge things like graphics or UI but is not really enough to see if for example the economy is "stable" or what you want it to be or class balancing etc.


    So my facit:
    Sub prices *do* matter.
    Make them too low, and you might convey the impression of a sub-par game.
    Make them too high, and you might loose entire (target) audiences.
    As Axehilt tried - from how i understood him - to say:
    The right price between "too high" and "too low" can only be determined through market research and adjustments.
    But since the ~15USD/EUR mark is established, it's difficult to deviate from that; after all people have (price) expectations.
    And if the 15USD/EUR mark will be enough to cover the cost for a company, you're unlikely to see 14EUR or 16EUR instead, we're more likely to see 10EUR if the expected account:sub ratio is too low.
    While we're unlikely to see raises of a sub-price AFTER the launch, simply because many players would rage-quit, making proper market research prior to setting the price *the* most important factor in setting the price.

  • GrumpyMel2GrumpyMel2 Catskills, NYPosts: 1,832Member

    At this point, I do feel compelled to be a little pedantic and point out that what you guys are discussing here is the "price point" rather then the "pricing model", still a valid topic but an important distinction. Sub based games that charge $7 or $15 per month, may well have the same "pricing model". 

    "Pricing Model" would indicate how you go about coming up with the "price point" and/or how you monetize the service.

     

  • AxehiltAxehilt San Francisco, CAPosts: 8,682Member Uncommon
    Originally posted by SpottyGekko

    Axe, you seem to be single-mindedly pursuing this point, regardless of it's meaning. 

    What do you mean by "the game will do better" ? More players or more revenue ? 

    Because if you define it as purely "more players", then there's no doubt you're correct in saying $7 will be "better" than $15.

    But if you're implying a 50% drop in sub fee will generate MORE than 100% extra subs, then you're dead wrong. It has to be more than double the player number, otherwise there's no change in total revenue (whilst most definitely an increase in overheads). 

    I don't believe that there's a significant amount of people who feel so strongly about $8 that they will not play a game they would have enjoyed playing if they were prepared to pay $15. The amount is trivial, unless you want access to multiple MMO's simultaneously.

    I've already covered most of this in prior posts:

    • We're talking about revenue.
    • I'm not implying it will generate enough new subs to be worth it.  I've repeatedly stated I think it won't.
    • We don't know for sure.  Even developers don't.  Because there is very little (if any) price experimentation going on.
    Your last paragraph makes the "fixated on existing users" mistake that several posters are making.  When talking about a price change, if you're only looking at the existing playerbase (who were prepared to pay $15) then almost any price drop is a terrible idea because those players aren't going to subscribe more than the one time they already do.  But this is economics, man.  When you drop the price you attract new players.  The ones who weren't prepared to pay $15 are the bulk of the new payers!
     
    With other products a lower price also generates more repeat payments, but in the case of MMO subscriptions that value is by its nature extremely small (it's extremely rare for a single player to maintain multiple subscriptions to the same game.)
     
    However like the OP has mentioned a few times, it would increase the number of subscriptions spread across multiple games for players (subscribing to 2 separate games instead of just 1.)  But I think that's still a pretty small factor next to the significant (but probably not +100%) increase due to new payers.

    "Joe stated his case logically and passionately, but his perceived effeminate voice only drew big gales of stupid laughter..." -Idiocracy
    "There is only one good, knowledge, and one evil, ignorance." -Socrates

  • AxehiltAxehilt San Francisco, CAPosts: 8,682Member Uncommon
    Originally posted by Morrok

    To *me*, what counts (after a trial time) is the the total cost of an MMO.
    This includes the box/download price (if any) plus the sub price, say for a year.

    Right, exactly.

    Loktofeit isn't wrong to bring up the fact that compared with the box price the subscription is going to be a less important factor, but it's still a factor.  It's still part of the total cost of the game.

    How many additional people bought GW2, because the subscription was "free" instead of $15/mo?  I'm guessing it's a pretty significant number!  That's a direct example of the affect of subscription pricing.

    "Joe stated his case logically and passionately, but his perceived effeminate voice only drew big gales of stupid laughter..." -Idiocracy
    "There is only one good, knowledge, and one evil, ignorance." -Socrates

  • GrumpyMel2GrumpyMel2 Catskills, NYPosts: 1,832Member
    Originally posted by Axehilt
    Originally posted by SpottyGekko

    Axe, you seem to be single-mindedly pursuing this point, regardless of it's meaning. 

    What do you mean by "the game will do better" ? More players or more revenue ? 

    Because if you define it as purely "more players", then there's no doubt you're correct in saying $7 will be "better" than $15.

    But if you're implying a 50% drop in sub fee will generate MORE than 100% extra subs, then you're dead wrong. It has to be more than double the player number, otherwise there's no change in total revenue (whilst most definitely an increase in overheads). 

    I don't believe that there's a significant amount of people who feel so strongly about $8 that they will not play a game they would have enjoyed playing if they were prepared to pay $15. The amount is trivial, unless you want access to multiple MMO's simultaneously.

    I've already covered most of this in prior posts:

    • We're talking about revenue.
    • I'm not implying it will generate enough new subs to be worth it.  I've repeatedly stated I think it won't.
    • We don't know for sure.  Even developers don't.  Because there is very little (if any) price experimentation going on.
    Your last paragraph makes the "fixated on existing users" mistake that several posters are making.  When talking about a price change, if you're only looking at the existing playerbase (who were prepared to pay $15) then almost any price drop is a terrible idea because those players aren't going to subscribe more than the one time they already do.  But this is economics, man.  When you drop the price you attract new players.  The ones who weren't prepared to pay $15 are the bulk of the new payers!
     
    With other products a lower price also generates more repeat payments, but in the case of MMO subscriptions that value is by its nature extremely small (it's extremely rare for a single player to maintain multiple subscriptions to the same game.)
     
    However like the OP has mentioned a few times, it would increase the number of subscriptions spread across multiple games for players (subscribing to 2 separate games instead of just 1.)  But I think that's still a pretty small factor next to the significant (but probably not +100%) increase due to new payers.

    Of course, there is another factor involved as well that's not being considered. Namely how a more then 50 percent drop in gross revenue per user effects the nature of the services the company delivers. An MMO type service is going to have both elastic and inelastic operating costs. There are plenty of economies of scale that can be gained, but even still at $7 per user, the company is going to be operating alot closer to margin on each user supported.... that certainly can have a pretty drastic effect on the nature of the services provided and the company that's trying to provide them.

  • LoktofeitLoktofeit Stone Mountain, GAPosts: 13,633Member Uncommon
    Originally posted by Torvaldr
    Originally posted by Loktofeit

    As mentioned above, the price of an MMO is rarely a factor, so whether a person starts playing at seven dollars or starts playing at fifteen dollars, the impact of price on the decision to continue or cancel remains relatively the same.

    Acquisition is important, but conversion and retention is key. Even if a lower price did introduce a spike in people trying the game, funneling in more people at the low end doesn't really pay off when you're now investing far more in combating churn and raising your cost per acquisition.

    I wouldn't say the price isn't or rarely is a factor, but when accepting how the product is packaged, the exact price point becomes secondary.

    For example paying a monthly bill for a game is more than I want to be required to spend, but if I were to spend that then $7 or $15 doesn't really matter, but I might think twice if it went up to $20 or $25 per month.

     

    Reading that first line out of context, I would agree with you.

    When putting it back in the context of just the 7 and 15 dollar prices, it seems you agree with the statement, as well.

    There isn't a "right" or "wrong" way to play, if you want to use a screwdriver to put nails into wood, have at it, simply don't complain when the guy next to you with the hammer is doing it much better and easier. - Allein
    "Graphics are often supplied by Engines that (some) MMORPG's are built in" - Spuffyre

  • LoktofeitLoktofeit Stone Mountain, GAPosts: 13,633Member Uncommon
    Originally posted by Axehilt
    Originally posted by Morrok

    To *me*, what counts (after a trial time) is the the total cost of an MMO.
    This includes the box/download price (if any) plus the sub price, say for a year.

    Right, exactly.

    Loktofeit isn't wrong to bring up the fact that compared with the box price the subscription is going to be a less important factor, but it's still a factor.  It's still part of the total cost of the game.

    How many additional people bought GW2, because the subscription was "free" instead of $15/mo?  I'm guessing it's a pretty significant number!  That's a direct example of the affect of subscription pricing.

    Very good point. Actually, GW2's marketing was incredibly well done on all fronts. The most brilliant was putting a box fee up front and positioning against subscription titles while dodging the stigma of free to play.

    There isn't a "right" or "wrong" way to play, if you want to use a screwdriver to put nails into wood, have at it, simply don't complain when the guy next to you with the hammer is doing it much better and easier. - Allein
    "Graphics are often supplied by Engines that (some) MMORPG's are built in" - Spuffyre

  • Snake9009Snake9009 Posts: 10Member Uncommon

    Something I have not seen mentioned here is maybe these companies are wanting to target a certain part of the gaming population instead of going for millions of players.

    Years ago when I decided to open my own repair shop I hired my brother-in-law who majored in economics to do some research of the repair business in my city so I would be able to hopefully compete and stay in business. He came back after a few months with some interesting data. It seems the people who pay less want better service and complain more due to the fact most of them are strapped for cash so that  $150.00 repair bill usually means they put off another bill to pay it. The people looking for lower prices are also the least loyal and will leave as soon as a lower price comes along.

    I decided to test his data findings and started out with a Grand Opening sale where all my computer and console repairs were priced way below other shops in my area. I can honestly say it took me 3 months to realize I did not want most of my new customers returning to my shop and I had many I never wanted to speak too or see again lol. He was right, they wanted top of the line service for rock bottom prices and complained about even the smallest of details. They also wanted a lot of "freebies" such as a long warranty and they wanted service instantly without any waiting no matter how busy I was. The lower price customers were also the first ones to use the line "the shop across town is doing this job for cheaper can you match his price?" When I refused they left and went across town even though they probably spent the savings in gas they still wanted that cheaper price.

    I ended the sale and more than doubled my prices which dropped about 85% of my customers but since they were my PITA customers I did not care. The funny part is after my prices went up I started getting small business's and many new wealthy customers who had enough disposable income that even a  $1,000.00 repair was nothing to them. The funny part was they had more patience and understood if I had other customers ahead of them, they also did not complain about every little detail or want me to service them for free for life after doing that first repair. If I replaced a video card then 2 months later their network card took a dump they understood the 2 were not related and had no problem paying for the service. I also found out the ones who had the disposable income were more loyal, you do a good job for them and they will stay with you for life no matter what you charge.

    If I lowered my prices I am sure my customer base would grow but in the long run I would make less due to the fact the majority of customers coming in for that low price would demand more free or discounted work and take up more of my time which would take away from my ability to service the high paying customers. Maybe these MMO companies are looking at the same thing. Why try to please 1000 people at 5.00 a month when you could service 500 or less at 15.00 per month. The fewer customers might bring in less revenue but they also use less of your resources and take less employees to service which in the long run puts more money on the bottom line and the higher paying customers will be loyal to that MMO versus the ones wanting the cheap fee who will probably bail once something cheaper comes along.

    I am very happy servicing the few customers and small business's that I have now as regulars and since it is a smaller customer base I am not having to hire extra techs or work 70+ hours a week which cuts down on my outgoing cash and in the long run allows me to make a nice profit from my business. Maybe I could eventually make more money by cutting my prices in half but honestly I do not want the headache of dealing with those customers who are constantly shopping for a bargain and would prefer to deal with customers who do not have to go get a loan to pay a $1,000.00 or more repair bill.

    The funny part is in the 10 years I have been doing this there have been 6 shops open near me who undercut my prices by 50% or more and even used my company name in their adds stating how much cheaper they were than me yet here I am still in business and they are now an empty building. This tells me lower prices do not mean better income for a business. I may charge more than some companies doing the same work but my customers are happy and that is what matters. When someone calls now telling me Joe Bob across town offers the same work for a cheaper price I tell them to go see Joe Bob and have a nice day. You cannot please everyone so I only try to please the ones who will pay my bills and the people looking for a bargain can go bother someone else because I do not want to deal with them and I bet these MMO companies look at it the same way.

  • TorvalTorval Oregon CountryPosts: 7,187Member Uncommon
    Originally posted by Loktofeit
    Originally posted by Torvaldr
    Originally posted by Loktofeit

    As mentioned above, the price of an MMO is rarely a factor, so whether a person starts playing at seven dollars or starts playing at fifteen dollars, the impact of price on the decision to continue or cancel remains relatively the same.

    Acquisition is important, but conversion and retention is key. Even if a lower price did introduce a spike in people trying the game, funneling in more people at the low end doesn't really pay off when you're now investing far more in combating churn and raising your cost per acquisition.

    I wouldn't say the price isn't or rarely is a factor, but when accepting how the product is packaged, the exact price point becomes secondary.

    For example paying a monthly bill for a game is more than I want to be required to spend, but if I were to spend that then $7 or $15 doesn't really matter, but I might think twice if it went up to $20 or $25 per month.

    Reading that first line out of context, I would agree with you.

    When putting it back in the context of just the 7 and 15 dollar prices, it seems you agree with the statement, as well.

    Yeah, not really disagreeing so much as agreeing from my own perspective.

    I didn't really comment on the last fragment which I think is particularly insightful.  In these discussions we often over simplify the problem and the solution, but I think that helps highlight the complexity of operating an online game.  It's not just about quality content, it's not just about how we pay for it, but they also must deal with that retention and where the retention falls off.  As you say, ending up in the dilemma where they're combating churn, is a really bad place to be and it doesn't really matter if people are paying $15/mo at that point or spending money in other ways, they're on the defensive trying to recoup lost ground.

  • caremuchlesscaremuchless Crestline, CAPosts: 603Member
    Originally posted by Velocinox

    Pricing doesn't make a difference. The game makes the difference. 

    ^This.

    image

  • TorvalTorval Oregon CountryPosts: 7,187Member Uncommon
    Originally posted by Loktofeit
    Originally posted by Axehilt
    Originally posted by Morrok

    To *me*, what counts (after a trial time) is the the total cost of an MMO.
    This includes the box/download price (if any) plus the sub price, say for a year.

    Right, exactly.

    Loktofeit isn't wrong to bring up the fact that compared with the box price the subscription is going to be a less important factor, but it's still a factor.  It's still part of the total cost of the game.

    How many additional people bought GW2, because the subscription was "free" instead of $15/mo?  I'm guessing it's a pretty significant number!  That's a direct example of the affect of subscription pricing.

    Very good point. Actually, GW2's marketing was incredibly well done on all fronts. The most brilliant was putting a box fee up front and positioning against subscription titles while dodging the stigma of free to play.

    It is very brilliant and still appeals to me. For one, I wasn't planning on playing for a few reasons, but my son, nephew, and my old Guild Wars friends encouraged me.  Since it was only $60 or so, I didn't mind, but no sub removed at least an excuse, and they really did offer more up front for that $60 fee than going into a F2P game spending nothing.

    Most F2P games have a starter pack or a bundle of some sort that will get you the equivalent (extra slots, some doo-dads, and whatever other unlocks one might want), but by spending the same as any other AAA box fee, that all "came with it".

    B2P doesn't guarantee anything, just like any other payment scheme, but for a company that knows what they're doing, it's a very sweet in between spot, at least for me.

  • AxehiltAxehilt San Francisco, CAPosts: 8,682Member Uncommon
    Originally posted by GrumpyMel2

    Of course, there is another factor involved as well that's not being considered. Namely how a more then 50 percent drop in gross revenue per user effects the nature of the services the company delivers. An MMO type service is going to have both elastic and inelastic operating costs. There are plenty of economies of scale that can be gained, but even still at $7 per user, the company is going to be operating alot closer to margin on each user supported.... that certainly can have a pretty drastic effect on the nature of the services provided and the company that's trying to provide them.

    Right, and that's certainly a factor.  Although if you implement it right I'm not sure how significant it actually becomes (the games I worked on were all able to use cloud services to scale flawlessly without too much additional cost, including several games with more than 450k daily players.)

    It might be worth mentioning that running the live team actually becomes more efficient the more players you have.  Because if you implement a new dungeon which results in +0.5% revenue, that's universal to your entire playerbase (+0.5% revenue off a 150k userbase is obviously a lot less money than a 1 million playerbase.)

    But the live team is probably the 2nd highest recurring cost (behind marketing (which apart from diminishing returns and market saturation, is sort of a linear expense) and in front of server costs (which either linearly or slightly-more-than-linearly scale with player count; or I suppose another option is that you completely botch your scalability like FFXIV and people wonder if your dev team is living in the same 2013 as the rest of us.))

    "Joe stated his case logically and passionately, but his perceived effeminate voice only drew big gales of stupid laughter..." -Idiocracy
    "There is only one good, knowledge, and one evil, ignorance." -Socrates

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