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Founders/Cash Shop Economics
Wighty
Member UncommonPosts: 699
With the recent announcement of Devilians founders packs and the apparent unrest about the prices of the packs all throughout various sites, forums etc. I can't help but ponder the subject of economics when it comes to these decisions.
I come from a 20+ year sales background and I know about pricing structure etc so it befuddles me when I see something so out of whack.
The typical run of founders packs in the last few years are some entry level $20-50 midrange at the $70ish mark then the top tier at $100+ which usually has some huge carrot attached to it in Devilians case it's alpha.
I would think from a sales perspective that sure you will sell a good lot of $150 packs and probably a good lot of the lower packs (the middle pack is probably the lowest sales and just there as a bridge to the top tier). Many people scoff at the price, you end up pissing a bunch of people off and shunning some of your loyal customer base.
If the packs were say $50 at the top tier or at least allow access at the mid tier (or all for that matter) and leave the top one for the fluff crap you would likely sell a tom more volume at a lower price which would (in my sales experience) end up with more overall dollar volume. I mean sure people will still complain about the price of admission but most of at least the loyal customers will be at ease and likely buy in.
This same mentality holds true for cash shops, or "Convenience Stores" It seems like the way these gaming economist operate is like a third world country You are either wealthy and spend money or you are flat broke and can't afford shit.
There is a reason why they call the 1%ers 1%ers, it's not the 80/20 rule where 20% of the people support 80% of your revenue (typical in most sales situations). In gaming is they reduced prices to a more reasonable say middle class level there will be (I hate to use this term) more or less income equality and players would more or less support the system and prosper.
The point is you can make more money with exponential volume at a lower cost vs. high prices that much less of the playerbase will be able (or willing) to spend.
/rant over
I come from a 20+ year sales background and I know about pricing structure etc so it befuddles me when I see something so out of whack.
The typical run of founders packs in the last few years are some entry level $20-50 midrange at the $70ish mark then the top tier at $100+ which usually has some huge carrot attached to it in Devilians case it's alpha.
I would think from a sales perspective that sure you will sell a good lot of $150 packs and probably a good lot of the lower packs (the middle pack is probably the lowest sales and just there as a bridge to the top tier). Many people scoff at the price, you end up pissing a bunch of people off and shunning some of your loyal customer base.
If the packs were say $50 at the top tier or at least allow access at the mid tier (or all for that matter) and leave the top one for the fluff crap you would likely sell a tom more volume at a lower price which would (in my sales experience) end up with more overall dollar volume. I mean sure people will still complain about the price of admission but most of at least the loyal customers will be at ease and likely buy in.
This same mentality holds true for cash shops, or "Convenience Stores" It seems like the way these gaming economist operate is like a third world country You are either wealthy and spend money or you are flat broke and can't afford shit.
There is a reason why they call the 1%ers 1%ers, it's not the 80/20 rule where 20% of the people support 80% of your revenue (typical in most sales situations). In gaming is they reduced prices to a more reasonable say middle class level there will be (I hate to use this term) more or less income equality and players would more or less support the system and prosper.
The point is you can make more money with exponential volume at a lower cost vs. high prices that much less of the playerbase will be able (or willing) to spend.
/rant over
Gaming is Dirt Cheap compared to this...
Comments
Turns out, trion lied and lied horribly. It was a blatant cash grab, upon cash grab, gambling boxes, best in slot in cash shops etc... All the "no tricks, no trap" thing went out of the window as their eyes were too much $-$.
Now Devillian is AA round 2. Hopefully people don't have their rose tinted glasses on any longer.
GAME PACKAGES
Physical Packages
I think founders packs is a bit risky business there, I myself tend to avoid games that have them, I get a pay2win warning from them.
Funny enough don't I have any problem with B2P. for some reason if they charged $50 for the game and had a collectors edition for $150 with an artbook and sountrack besides the early access I have zero problems with it and I can't exactly say why this is fine....
A server cluster to support 10k ccu/concurrent users is between 20-40k. If you already have other tech and staff in place for other games, it gets easier. Aka, they had already setup for Rift.
so AA has 6 servers in US when it was alpha so 30,000 x 6 = 180,000 for hardware.
150 alpha pack x 10,000 users = 1.5million
and just so people know, they launch hardware and alpha hardware were the same hardware, they just whiped the data and changed some names.
I think they are doing just fine and it has nothing to do related to money issues.
To address these two points:
The 1%ers aren't the people buying the $150 pack. They're the ones buying 2 or 3 of them. Sometimes 5-10.
Founders packs target a specific subset of the game's audience. Most gamers would not even consider a founder's pack, let alone know they exist. This is targeting the early adopters, the more invested gamers that buy-in early, and the price-point of 50 has proven very successful, amazingly successful when we consider that it is often used for games that will be free at release.
So, if this was release, then I'd say you're spot on. Release is targeting the broader audience where that lower price approach you are talking about works. As soon as they hit that tipping point where you see the shift from early adopters to the majority you'll see lower priced items or services show up, usually in the cash shop.
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
It's all about maximizing your $ per player. When you cap it at $15 a month, or a one time buy-in fee, it becomes difficult to sustain without huge amounts of players. Typically when games like AA, Devilian, BnS, Trove, Albion, are released; there is no IP to carry them, no huge advertising budget. They aren't going to attract many players (and because of the age we live in) are not going to keep many players. So sub fees don't make sense for most games. Enter in the cash shop. The trick is doing it in a way where if you play free (or close to free, ie $15 a month) you have to play more and work harder, this way you make the game feel alive because you are online playing. If you don't have a lot of time, maybe you work or have kids, you can support the game and hopefully the in-game economy by spending money.
Remember we want games to survive and we want new IPs to come around but we are always so hesitant to spend any money. Subs might be feasible if people were willing to spend $25-30 a month. but let's face it that is a hard sell for any game to pull off for just the opportunity to log in and play.
Looking forward to: Crowfall / Lost Ark / Black Desert Mobile
They Stop playing MMOs all together
Play a P2P MMO like FFXIV
Or play F2P MMOs and spend no money at all and when they hit a pay wall go to the next F2P MMO
While F2P can be viable the problem is pricing the cash shop, charging $150 for a game plus giving a large advantage to these people much like AA did, also buying for Alphas and the like. In Truth many of these games are being designed as throw a ways and people will continue to fall for it.
I will even go so far as to say a few got their money's worth before launch ever happened because some claim they got the most enjoyment out of the game during alpha. However, the botched launch caused disappointment because the queues robbed many Founders of the real value of their purchases (first shot at valuable land). So regardless of how much fun many of those unlucky Founders had during alpha, I suspect many quit the game with a bad impression of the dev/publisher and regret rather than cherish the good memories of their alpha time.
I think XL/Trion were after the guild leaders and major guild players of cross gaming guilds with their pricing. These are the people who take their gaming very seriously and spend a lot of money on it. This got them some valuable free marketing buzz as well as $150 a head.
It also gave those organized guilds with enough members who beat the queues a monopoly on resources. This is something the rest of us gamers hate to see happen, but big cross gaming guilds dearly love it. All in all, Trion/XL was very clever with pricing. Sadly they were not clever with follow through, such as at least ensuring none of the land hoarders were hacking RMTers.
This new offering of theirs I see ploughing nose first into the dirt. It sounds bland to begin with and it's not running anymore overseas if I remember reading that right. Plus now Trion has been smeared with AA debacle, including the upcoming merge. I think they're screwed and that they deserve to be.
I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy, accompanied by an educational system which would be oriented toward social goals.
~Albert Einstein
8 years and counting addicted to
Avalon: The Legend Lives - the longest running online RPG in history