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Thursday, April 23, 2009
 
Vogel's Discussion Of Underpricing Indie Games Continues
6:00 AM | Cord Kruse | 1 comment

On his blog, The Bottom Feeder, Spiderweb Software's Jeff Vogel continues his discussion of the pricing of independent games, specifically addressing the drawbacks of downward spiraling prices. In the second part of the discussion Vogel refutes the common reasons customers feel lower prices would be better and offers his solution to the problem.

"If You Charged Less, You Would Sell More Copies"
This is true. The problem is that I won't sell enough more to justify the lower prices.
Microeconomics tells us that as we charge less, we sell more, but we make less per sale. At some point, there is a best price, a point where (number of sales) * (profit per sale) is at its maximum. The question is, where is it? Based on my experiences shifting prices up and down, I think I'm actually at the sweet spot.
Suppose I charged a World Of Goo price, like $15. This would roughly halve my profit per sale. (Because of the way credit card fees work, the less I charge per sale, the smaller percentage of profits I make.) To make up for this cut, I would have to double my sales. Double! That is a huge increase! Doubling would be big!
Based on data I've received from distributors, I believe that about 3% of my downloads turn into sales (this is called the Conversion Rate). To make up for the price cut, I would have to increase my conversion rate to 6%. This is a HUGE rate, pretty much impossible to get for a niche product like mine. If I had a more casual-friendly product, I might manage it, but that's not my niche. I have to set a price to reflect the nature of my niche.

"I Can Buy Better Old Games At the Game Store For Far Less"
This is, honestly, a pretty hard charge to answer. When someone says, "Why should I get your game when I can get Baldur's Gate 2 for $10?" what I think is, "Dude, you haven't played Baldur's Gate 2 yet? Go get it! It's awesome! And you know something? In a few weeks, when you're done with it, I'll still be here."
I can't compete on price with old classic. Nobody can. To expect me (or anyone) to match price with a handful of old games is completely ridiculous. Can't happen.
But my games have an advantage. They're new. Go ahead and play the old classics, or at least the ones you haven't played already. Go play Fallout or Planescape: Torment. They're SWEET.
You'll be done soon enough. And, when you are, I'll still be here.
Head over to the link below to read the rest.

The Bottom Feeder: Indie Games Should Cost More, Pt. 2
Spiderweb Software


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Archives  News  Vogel's Discussion Of Underpricing Indie Games Continues