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Game Prices on Steam: should there be regulation/guidelines?

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I searched through the game catalogue on steam this weekend while waiting for friends online. Haven't done so in a while, and I never actually just searched for a category (RPG this time) and actually looked at all of them.

 

I was shocked a little bit about the average price. Besides the few big name Indie or AAA games that where in the list (amazed that these actually are not shown BEFORE all the others by steam), most of the smaller and no name Indie games where in the price range of 2-5$, with some few charging 10$ and more, and a few being available for free.

 

Now, I am pretty much aware of the average quality of many of those RPGs, thank you very much. I did though take the time and looked at some of them, especially the user reviews. Found some interesting things, like this Indie RPG that looked like the usual RPGMaker-ware, yet seemed to garner quite positive reviews for its 12 hour campaign, thus most probably a game made by good devs with limited art skills and budget. As far as I remember the devs asked for 2 bucks for the game.

 

 

I am aware that the competition on steam is getting ever more fierce, that consumers often have a bad attitude towards certain types of games (for example RPGs that struggle to deliver the visual fidelity of a 16bit era JRPG and have an RPGMaker typical look and feel), and that it is a free market where everyone can ask for any price they like.

I am also aware that you might make more cash in the end aiming for a lower price point.

 

 

Question is, in whose interest is it that prices on Steam start to fall in the Indie category at least just as the did on mobile years ago? Its certainly not in the best interest of the Indie devs that feel the pressure to lower their prices too. Cannot be the best interest of the big AAA Studios, they might not be directly affected as its not direct competition, but over the long haul their prices will also be affected by the average as players perception of "fair prices" shift.

I would even say its not in the best interest of the consumer. I am not one who loves to pay way to much for overpriced products, mind you... but I am always willing to pay a fair price for a good product. Is there a GPU available for 50$ less that has a slightly worse cooler, is clocked lower (and thus not guaranteed to reach clocks of the other product) and is from a brand with slightly worse support? Given the base price is 600$, I will gladly plonk down the additional money.

Similarly I will gladly pay a little higher prices for games, as long as they are fair (I am not asked to pay more than people from neighbouring countries (Fallout 4.... no, just no), price does not increase for no reason over time, I am not asked to pay twice for the game thanks to big parts of the game being locked behind a DLC paywall, and so on).

 

I guess there are many players like me. I have limited time, thus my hours dedicated to gaming per week I can count on two hands. I will most probably not play more than 3 or 4 games per 6 months, maybe per year. Many times I dust off old games for nostalgias sake which take up some of my playtime.

 

I have not problems with paying for games I enjoy. I would even go so far that I don't care about paying MORE for console games than PC games on Steam (I don't own a "current gen" Console because they have the power of a last gen PC, not because of the price).

I still do like to take part in Steam sales. More because I can try out games I wouldn't buy at normal prices than because I am not willing to pay the full price on all games.

 

 

But I digress... my personal opinion is that Players are mostly willing to pay current prices (50-75$ for an AAA game, 10-30$ for an Indie or old AAA game), given the game is good and to their liking. They want to be entertained, and if that entertainment costs as much, they are willing to pay.

Of course there are binge gamers, or poor gamers. Still, with Steam sales, even a more expensive game can become reachable to them, even though maybe not at release.

 

I don't think it is in the best interest of players that prices are raced to the bottom on steam as they are on mobile. If an Indie has trouble asking a price for his quality niche game that gives him a RoI, he will not produce another game of this ilk (maybe leave game development altogether). If the possible price range gets lower, games produced will cut back on budget, thus ultimately on length and quality.

 

 

And of course, last but not least, Steam cannot have an interest in having the prices on their platform drop too much.

 

 

 

Thus, would there be a value for limiting the options of price ranges to some fixed prices (so for example, either you put your game on Steam for free or choose the 5$ price tier), or at least release guidelines on how much a certain type game should cost on Steam (don't know if something like that exists already, as I don't have a game on steam)?

 

 

 

Just to adress the "perceived quality" topic:

It is my believe that if a 12 hour RPG with mediocre graphics garners very positive feedback, the price of 5$, maybe even 10$ is easely justifiable. Game length is 25% that of an AAA RPG (I would guess 50 hours average, leaving out all the non-story fetch side quest and completionist collecting tasks).... given a 60$ price for an AAA RPG, that would make 15$ a fair price. If you adjust now for the subpar graphics by modern standarts, and maybe not so stylish graphics even by Pixel Art Indie standarts, 2$ still seems far to low, given that the good feedback the game got points in the direction that the gameplay and story must be rather good, especially given the low opinion on "RPGMaker shovelware" on Steam. Might not be an openworld Blockbuster with dialogue options impacting the story, crafting and all that, but that is hardly what JRPGs are about (which is where most RPGMaker games seem to get their inspiration from), so that should be irrelevant to its target audience.

Would a player who enjoyed the game have bought it too for 5$? Most probably. Might haven taken longer for the game to get enough good reviews to sell to people who were more skeptic... might have ended up with a similar number of players in the end, while making 2.5 times as much money for the dev.

Might 10$ be too much given the RPGMaker looks? Don't know, might be pushing it already, but given the story and gameplay is as good as the positive review suggest, might have still made at least as much as the same game at 5$, with a better base price for sales and future price reductions.

Edited by Gian-Reto

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Game length has nothing to do with game worth.  That's a metric that leads to all sorts of shitty game development decisions.  Xbox 360 had fixed prices, and mostly developers hated it, so I'm not sure it's the right thing to do.  

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Game Prices on Steam: should there be regulation/guidelines?


I'm trying to understand the overall suggestion. These regulations or guidelines would be set
by whom?

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Artificially specifying price is a dangerous thing. In most real-world scenarios when it happens, there quickly arise some external markets that allow arbitrary prices again (both low and high), and often the overthrow the controlled-cost groups.

 

is my believe that if a 12 hour RPG with mediocre graphics garners very positive feedback, the price of 5$, maybe even 10$ ... Game length is 25% ... given a 60$ price for an AAA RPG, that would make 15$ a fair price. ... "RPGMaker shovelware" ... 5$ ... Might 10$ be too much given the RPGMaker looks? ... still made at least as much as the same game at 5$, with a better base price for sales and future price reductions. ...

 

Those are completely arbitrary numbers that discount things like the reality of salaries, paying the game creators, paying the distributors, and making some profit so future games can be made.

 

If all you are looking at is cost then quality will decline rapidly. If we descend to a world where all games are $0.99, and the distributors take a third, and no developers are permitted to make more, then you will see quality plummet.  A blockbuster game with 10M sales would have a budget that matches today's "shovelware". In order to produce it, you are talking about offshoring all the labor to the cheapest markets in the globe using the lowest cost development houses, which won't be pretty.

 

Major games cost so much because they take thousands, even tens of thousands of work years to create.  Budgets are in the hundreds of millions of dollars, and the risk involved means all games need to be priced high so the successes can cover the cost of failures and research.  The AAA game costing $70 still needs to sell 10M copies just to break even, let alone making a profit and to start funding future products.

 

Games that go the "free" route are often ad-based, "freemium" or "pay to win". A small number work on donations. You can only play for a short time before payment is demanded, or players are expected to make in-game purchases. Others the payment is advertisement, effectively you are paying a fraction of a cent for each ad you are shown, and those ads come frequently.  Rare are truly free as in "we give you this game as a gift of our time and efforts, asking nothing in return."

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One thing I've learned from selling stuff: The price of an item is not the value of that item.

 

A hair clip costs $0.30 to make in China. We can then sell it for $10-15 in America. Profit margins may appear to be high, but so are overhead costs (booth fee, transportation, food and lodging, time and energy, etc). Yet, people buy hair clips; It's something they like and want, solves a problem, and makes them feel pretty and good about themselves.

 

Almost a decade ago, I sold Cutco Knives to people. A full set went for about $750-800. "How will I ever convince people to pay that much for knives?!" I wondered. "Isn't that too expensive?" I found out the price doesn't matter.

With every sale, you're playing a juggling act. You've got the PRICE which you're asking for the item, and then the potential customer has the PERCEIVED VALUE of that item. If Price > Perceived value, then no sale. If Price < Perceived Value, then sale! A sale is ALL about the pitch. The art of sales is to increase the perceived value above the asking price.

 

When I did computer services for people, I hated it and wanted to stop providing my service. My strategy was to double my rate to $60/hour so that people say, "That's too expensive, no thanks!". Instead, it backfired. I got more business! Why? Because by charging higher rates, people thought that I was worth what I was charging. The high number increased my perceived value! Whoops! But, it also works in reverse! If you sell an item way below the perceived value, then the perceived value is also lowered!

 

So, what do idiot people do when they suck at sales and want to sell something? They drop their price instead of trying to increase the perceived value of their commodity! But, does it matter to others? I would argue "No! Not at all!". It doesn't have to be a race to the bottom as you guys might fear, it just means you have to create a compelling pitch about the value of your game and why it's worth the money you're asking for. We could build a compelling pitch for most decent games selling for $2 and get people to pay $10. Oh no! Sales volume drops! Okay, suppose the volume of your sales drops by 50%. Instead of making 1,000 sales for $2, you make 500 sales for $10. The 1,000 sales gives you $2,000 but the 500 sales gives you $5,000. Now, do you want sales volume or sales value?? Even if your sales volume dropped to 20%, or 200 sales, you'd still break even. You increase your sales volume through marketing and compelling sales pitches, NOT by dropping your price. That's generally an amateur move. Don't think your game is worth $10? Well, your opinion on the value of your game doesn't really matter. If it helps you sleep better at night, maintain high production values throughout the development of your game! At the same time, stop undervaluing yourself!!!

Edited by slayemin

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How much does price influence your purchasing decisions when it comes to video games? I have two tracks that usually come in to play for me: I'm either looking for a specific game, or I'm looking to see if something catches my eye. In the former case a high price might persuade me not to buy it right now, and a sale or a low base price is a bonus. In the latter case I may or may not buy a given game but if I'm on the fence I'm more likely to click "buy" if the price is low. It's not necessarily a choice the dev has between a higher price or a lower price, it's a choice between making 1 sale or 0 sales.

 

With the really cheap games, in the $2 to $15 range for base prices, it's an information problem. Steam is flooded with games and unless it's one that has a lot of press I have no idea at all what I'll get out of any of them. If a dev (or publisher or whomever) wants me to buy a specific game they can persuade me that it's worth my money. It's hard for a game to differentiate itself well through the Steam platform alone, and that leaves price as the only thing to entice me. If there were a mandatory minimum price for games the main result, for me, would be that I would buy fewer of them.

 

Rather than an information-destroying policy like price floors I would rather see an approach that gives me more information about whether or not a game might be worth my buying it. Steam has tried a bit of this with their customer reviews, customized recommendations, curated game lists, and return policy. Maybe those aren't enough to avoid some Pyrrhic price competition but there will always be some games that flat-out aren't worth $X. Making it even harder to identify such a game could very easily reduce sales enough to offset the extra revenue from a higher price, leaving indie devs even worse off.

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The AAA market will probably remain high priced due to the production costs of said games, they need to recoup that expense.

 

In the indie market supply and demand coupled with green light opening the steam doors to all sorts of low budget games means it will be a race to $0 like the mobile market. That said, there will always be the indie gems that can demand more.

 

The new normal for mobile at least is really $0 an in app purchase, this is really to get people to try the games in the first place. Also many see games like TF2 (Sorry Hat Simulator 2) and the money that makes in hats and want a piece of the action.

 

In reality I am surprised Battleborn did not follow the the Dota2 model as it is really a MOBA

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Maybe I didn't explain my problem with the current situation and the possible solution enough... so I will try to be more precise.

 

Problem:

 

The last thing I think anyone could be interested in is that Steam is degenerating into another "mobile app store", where a 1$ Premium game is already expensive, and a 5$ game that is not coming from an AAA studio and has the looks to prove it raises more than just one eyebrow.

I am not a big mobile gamer, but what I have seen is that while there are certainly some gems hidden in the App stores (many of which dare to ask for more than 1$), a lot of games are of poor quality.

 

Now, I am not saying that more expensive game = better quality. But we all know how cost cutting works. In the end, it HAS to affect a games quality if the budget gets cut.

 

I am a little bit concerned how some smaller Indie devs seem to sell their games below their worth. Because even if product A is produced cheaper than product B, if it happens to work just as well as product B, uses almost the same high quality components/ingredients/raw materials, and has no other catch, it should cost almost the same.

 

Now, we can discuss at length what makes up the worth of a game, sure. I would dare to say its the expierience. Not the graphics or sound quality, not the length (hence, yeah, my example did fall on its face a little bit because of that, I see that now), simply the expierience they give to the player. Do they have the same amount of fun in this short Indie game with pixel graphics than this big 30 hour AAA campaign? Yes? Shouldn't the game prices then be similar.

 

Of course this does not work... AAA game prices are fixed, and we all know how much AAA games fun factors differ. My point is a different one. What I want to question is if ANY game could/should only be worth 2$? To the players, or its dev? A bad game is a bad game.... pricing doesn't change the fact that I don't want to waste my time playing this trash. Many a f2p game I deleted from my harddrive quickly after just trying it out because of recommendations. The fact it doesn't cost me money doesn't mean I am willing to waste my time on it.

Conversly, if I like a game, I don't care too much about its price (withing limits, of course). I bought some old SNES cardtridges that where sorely missing in my collection for prices almost like new. I was willing to pay that, for nostalgias sake, because its a collectable.... but also because the game happened to be good. I would never pay a cent for a bad game. Apart from collecting, I also want to play those old games. If the game sucks, no buy.

 

Coming back to my point... in case of games, there is little point in trying to get a lot of additional sales with price reduction. Yes, it works for sales. Because people come to expect those. Yes, it works to strengthen sales at the end of a games lifetime. Because the game is now fighting an uphill struggle against newer titles (until it gets old enough to be cool again, which takes a decade or more).

There is a point in price variances between "Tiers" of games. AAA games, AA games of the big publishers, old AAA re-releases, bigger Indie titles, and so on. I don't see a point in the price variance between Titles in the same tier. Why should Indie RPG one and Indie RPG two be priced differently? Especially, why should one be 2.5 times more expensive, or 10 times more expensive?

Is it because of player expectations and tastes ("this game looks graphically better than that... must be a better game")? Or is it because a dev feels pressured to ask for less, because "my game is never worth 5$ to players!"?

 

 

In the end, the Problem to me is not so much the difference of prices, quality vs. price, or anything else. The Problem to me is preventing that prices start slipping on the Steam store as they did in the mobile stores. Nobody can be interested in that, not even the customers.

 

 

Possible Solution:

 

Put in place some kind of regulations, like fixed price tiers. What exactly is the point of being able to price on game at 4.5$, and the next, very similar game at 5.5$? Why not put both in the 5$ bracket?

 

Failing that, stronger recommendations by Valve/Steam on how devs should price their games... or at least what price should be the minimum.

 

 

As much as free markets benefit the customer when prices fall thanks to it, a price war sees everyone lose out in the end. And as we still want the competition (or there legally needs to be competition as it might break some law else), there should be a mechanism in place that prevents devs to go haywire with prices, be it out of false guilt over the perceived unworthiness of their game, pricing pressure by a vocal minority of players, or simply trying to undercut competition in a bid to increase market saturation.

 

 

 

Of course, while thinking about it, I came up with a good argument against my own opinion:

 

- But you can apply the old "production cost/expect amount of copies sold + profit margin" formula to games! That means that every game dev can come up with a different price!

 

Yes you can... but many AAA studios are not doing that, instead they price games more or less in line with the competition, hoping to sell enough to make a RoI. Of course they have a large amount of expierience and marketing weight Indies lack. Still, if it works for them, why should Indies not move to a similar pricing model? You could still have different price brackets (because Indie games differ wildly in budget and production quality)...

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How much does price influence your purchasing decisions when it comes to video games? I have two tracks that usually come in to play for me: I'm either looking for a specific game, or I'm looking to see if something catches my eye. In the former case a high price might persuade me not to buy it right now, and a sale or a low base price is a bonus. In the latter case I may or may not buy a given game but if I'm on the fence I'm more likely to click "buy" if the price is low. It's not necessarily a choice the dev has between a higher price or a lower price, it's a choice between making 1 sale or 0 sales.

 

With the really cheap games, in the $2 to $15 range for base prices, it's an information problem. Steam is flooded with games and unless it's one that has a lot of press I have no idea at all what I'll get out of any of them. If a dev (or publisher or whomever) wants me to buy a specific game they can persuade me that it's worth my money. It's hard for a game to differentiate itself well through the Steam platform alone, and that leaves price as the only thing to entice me. If there were a mandatory minimum price for games the main result, for me, would be that I would buy fewer of them.

 

Rather than an information-destroying policy like price floors I would rather see an approach that gives me more information about whether or not a game might be worth my buying it. Steam has tried a bit of this with their customer reviews, customized recommendations, curated game lists, and return policy. Maybe those aren't enough to avoid some Pyrrhic price competition but there will always be some games that flat-out aren't worth $X. Making it even harder to identify such a game could very easily reduce sales enough to offset the extra revenue from a higher price, leaving indie devs even worse off.

 

I see where you are coming from, but:

 

Do you really believe a dev sets his price based on the quality of his game? Ask two devs who developed more or less the same game... one will tell you "my game is awesome, worth 10$!"... the other will tell you "I know my game sucks, I still hope I make some sales, well, 2$ is the most I can ask for it"...

 

Then there is the cost to produce the game. I still remember the mech game where the dev claimed 20$ where in order because they spent years developing the engine alone.

A similar game might have cut costs where it didn't matter (like going with an existing engine), and would price the same game at 10$... because instead of 5 years, they only spent 2 making it.

 

 

Price is no information of value to the customer. At least not as long as they guy selling the product also sets the price. This is why player feedback is so important, gameplay vids or screenshots also.

How many times did I click on an awesome thumbnail just to find out the ingame graphics sucked? Clearly most of the art budget was spent on that thumbnail. Similar with the price, you need to dig deeper than that to find out if a game is really as good as the dev claims it to be.

 

 

Look, I might be a little bit different in that I really don't care about the price as long as it is fair. Some dev wanting 25% more from me than people from neighbouring countries? I either buy the game in a different country (if I can do that, thanks to platforms like Steam this will no longer be possible)... or I just don't buy it at all. Someone trying to sell me their game for 120$, or locks parts of the game as DLC? No sale, until the game is put in a sale.

 

I will not buy a game over another just because its cheaper, just as I will not try to judge its worth by its price. I buy games based on recommendations. And I wager many other players do the same. Price is only really a factor when you binge buy games during a sale. Sure, that can be an awesome additional income for smaller devs that do not get so many recommendations yet.

But then again, it doesn't matter if a 5$ game is discounted 50% or a 2$ game is discounted 50%... actually, to most the 5$ game will look like the better deal, as you save MORE money.

 

Point is, I don't believe money plays nearly as much of a role in buying decisions for most gamers than you might think. They might not pay AAA game prices for a small Indie expierience... but the game price differing by the amount of a small chocolat (here in switzerland) or a burger (in the US.... prices for food around here are insane) will most probably not sway a players opinion on what game to put in the cart during a sale, given the more expensive game looks more interesting to him.

 

 

EDIT: of course I am aware that people in some countries have way less money to spend. Yes, prices should be affected by the average spending power of players in a certain country.

But Steam already gives devs the tools to set prices according to country (hence why we here in switzerland get hit with way higher prices by SOME devs)... this tool should be used to make buying a game less than a monthly income in poor countries, not by having games with flat out lower prices.

Edited by Gian-Reto

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I see where you are coming from, but:

 

Do you really believe a dev sets his price based on the quality of his game? Ask two devs who developed more or less the same game... one will tell you "my game is awesome, worth 10$!"... the other will tell you "I know my game sucks, I still hope I make some sales, well, 2$ is the most I can ask for it"...

 

Then there is the cost to produce the game. I still remember the mech game where the dev claimed 20$ where in order because they spent years developing the engine alone.

A similar game might have cut costs where it didn't matter (like going with an existing engine), and would price the same game at 10$... because instead of 5 years, they only spent 2 making it.

 

I do think that prices are based on game quality, in part and indirectly. Developers set prices based on what they think will maximize revenue (or achieve some other goal, like building a good reputation for a studio), and it's not unreasonable to think that a "good" game will be popular, generate hype, and persuade people to buy it at a higher price rather than a lower one. We've all seen "bad" AAA games released at the normal price point and then quickly and steeply discounted soon after launch.

 

Price is no information of value to the customer. At least not as long as they guy selling the product also sets the price. This is why player feedback is so important, gameplay vids or screenshots also.

How many times did I click on an awesome thumbnail just to find out the ingame graphics sucked? Clearly most of the art budget was spent on that thumbnail. Similar with the price, you need to dig deeper than that to find out if a game is really as good as the dev claims it to be.

I agree that player feedback, screenshots, and gameplay vids are far more important than price in my buying decisions. But 10 pictures and 3 minutes of video, while better than nothing, aren't too informative either. What I'm trying to say is that game buyers are in a situation where we are lacking information about the quality of a game before playing it, and its hard for a particular game to demonstrate its quality before purchase. If the buyer is skeptical that it's worth $X, and the game can't improve on that perception before the sale happens, then the price has to drop.

 

Look, I might be a little bit different in that I really don't care about the price as long as it is fair. Some dev wanting 25% more from me than people from neighbouring countries? ... or I just don't buy it at all. Someone trying to sell me their game for 120$, or locks parts of the game as DLC? No sale, until the game is put in a sale.

I bolded sections where I think we're saying the same thing. When deciding whether or not to buy, price is a factor (though not necessarily a decisive one). My point being that a game can definitely be priced too high for its perceived quality. In the $120 case for you, from your quote, it's a question of whether or not any game could be worth that and your answer is no. If all games were priced at $120, how many would you buy? I would buy, maybe, one per year at that price because I've played few games that I feel gave me $120s' worth of enjoyment.

 

Point is, I don't believe money plays nearly as much of a role in buying decisions for most gamers than you might think. They might not pay AAA game prices for a small Indie expierience... but the game price differing by the amount of a small chocolat (here in switzerland) or a burger (in the US.... prices for food around here are insane) will most probably not sway a players opinion on what game to put in the cart during a sale, given the more expensive game looks more interesting to him.

If that's true then why is there such savage competition driving prices down, and why would a price floor help things? Whether you think that price is a meaningful factor in game-buying decisions or not, I still think that the solution will involve conveying more information about the game to buyers, not just making games arbitrarily more expensive.

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