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[shrimp]

This is a good read, various pros and cons discussed:

http://www.scientificamerican.com/blog/post.cfm?id=name-your-price-approach-boosts-cha-2010-07-15

I wonder if the Humble Indie people knew about this research?
The article and study both only really looked at sales figures rather than any other more vauge outcomes, but still interesting.

[richtaur]

I especially like the part that points out that people might get irritated by feeling socially pressured; that implies that this model is not ideal for all situations and should be used conservatively. Though I think it is less of an issue on the Interwebz. Good stuff.

[shrimp]

Yeah it's good how they cover those angles. The Humble Indie guys did amazingly out of it, but I do wonder if it would work as your "default" sales model. Maybe as you say it should just be for promotions.

It's also interesting that Humble Indie tweaked it by allowing the buyer to choose how the payment was shared between charity and developers.

It would be nice to be able to (indirectly) contribute to charity via sales, but the social pressure element would make me uncomfortable as a developer if it was a real factor. I'd hope (especially online) that it would be more like an excuse for buyers to give to charity at the same time as getting a game out of it, if that makes any sense....

Plus it's a very simple "charityware" system, unlike Glumbuster's, which was pretty baffling.

[Melly]

Ah, I remember Glumbuster's charity thing. It was pretty difficult to decipher at first glance, and several people needed to have it explained to them, which probably hurt it a fair bit. People need to understand what you're offering near-instantly.

I find the article pretty interesting, especially thinking about the Indie Bundle. It's quite possible that the pressure to 'be a good person' was key to its great success. Not only were the proceedings donated to charity however the buyer saw fit, but the games were all offered free of all DRM, Amanita Design bundled one of their commercial games with it completely free of charge, and eventually 4 of them opened their source codes.

While sadly there was piracy of even that, often using the Bundle's server's bandwidth, I don't think I saw much of any justification for piracy in relation to it, since there are none other than the possible inability to use the paying services provided, and even then anyone with two brain cells would see you as a giant parasite.

It's very well possible that a pay-what-you-want system by itself won't be very successful because of people's tendency to pay the least they can. I remember Jason Rorher's new game also used the system by itself, but I haven't checked to see if he posted about any sizeable success of using the strategy. I'll have to look into it.

[Vino]

It would be nice to be able to (indirectly) contribute to charity via sales, but the social pressure element would make me uncomfortable as a developer if it was a real factor.

I think it's really only applicable with the human factor - ie a physical person asking you if you want to donate to charity. On the internet you have anonymity, nobody knows if you did or didn't donate to charity.

While sadly there was piracy of even that, often using the Bundle's server's bandwidth, I don't think I saw much of any justification for piracy in relation to it, since there are none other than the possible inability to use the paying services provided, and even then anyone with two brain cells would see you as a giant parasite.

Mike and Jerry from PA said it best. The piracy of the humble indie bundle and the world of goo pay what you want sale totally invalidated any arguments that the pirates have left in their favor and revealed them as cheap unscrupulous criminals. The indie companies selling those games weren't large publishers, weren't overpricing their games, and didn't have any DRM.

I heard expressed on another forum that I'm on that the pay-what-you-want sales model, while it may generate a good amount of cash, is bad for the long-term relationship with the customer, because it cheapens the value of the game. Customers may wait knowing that they can hold out for the next pay-what-you-want-sale and charge 50 cents instead of the full price. It may work as a one-off thing for those companies if customers understand not to expect another one, but otherwise it may be harmful.

[weasello]

Customers may wait knowing that they can hold out for the next pay-what-you-want-sale and charge 50 cents instead of the full price. It may work as a one-off thing for those companies if customers understand not to expect another one, but otherwise it may be harmful.

I totally thought so too, but it's just not the case.

Steam loves doing their weekend sales, not because they move a lot of units (though sometimes they do). It's because once the discount ends, the sales spike remains for WEEKS afterwards. Even when customers know full well that Steam has discounts every goddamn weekend, they still can't wait and buy at full price if they "want it now". The bargain shoppers are a rare (but vocal!) breed.

[Vino]

That's true but I think a lot of that spike is due to marketing residue. Sales are good for that.

[Muz]

This is interesting. I've always thought that people paying for indie games are just donating anyway. Games are so easy to pirate. There's plenty of people who try to pirate $3 games like Unreal World. I've always said that prices are just a sign that suggests how much you should donate. Put the price too high and people will steal it.

In a sense, games are a luxury. There's a lot of things you could do with your luxury money.. you could buy nice food or drinks. You could buy a witty t-shirt. You could get a TV or a PS3 if you have enough. I think some people are split between giving the money away to charity and buying some entertainment. IMO, giving $20 to feed some starving kids makes me happier than spending it on World of Goo. A charity model allows the buyer to do both.

It's almost perfect for indie games. Indie games benefit much more with low prices. Most customers are the charitable type. And yeah, it put down most of the "moral piracy" arguments. It's no wonder the Humble Indie Bundle had such a stark difference in income than many other games.


But I'd be wary of using it as a default sales model. This model is highly reliant on sympathy. If you appear to be using charity as a way to make money, it would look a bit less like charity. If you become a popular company, people would probably pay a little less. Later on, there'll also be the issue about whether the charities are worth donating to. I mean, Child's Play, while a great cause, is not as strong as any charity against cancer or starvation.

It's just one of those things that are fine in small amounts, but if you have a lot of people doing it, it's going to be much less effective. Suddenly cutting off from giving your profit to charity because "it's not making as much money as we hoped" is nasty PR and more ammunition for the people who pirate for moral reasons.


I think it's an ideal model if you actually intend to give to charity, but it'll eventually be disappointing if you're doing it for profit. But IMO, a large problem with working in the games industry is that you don't have a chance to change the world. A charity model would be the perfect way to change the world for the better, while doing something that you love.


EDIT: Another thought... would it work if you combine it with other luxury goods other than charity? I mean, look at McDonald's - they make a huge profit out of combining toy+food sales. Disney makes their profit from movies+toys. I think if you could do a "buy one, get two" system, people would be willing to pay a lot more. One problem with any game is that they may not live up to the hype... if you bundled in two games at a higher price, that lowers the risk for the buyer.

[Hayden Scott-Baron]

It would be interesting to see how much of an effect the charity hook makes to this. The pay what you want sales have been effective in the past, but it does seem that attaching a charity angle onto it generates a lot more publicity.

It's because once the discount ends, the sales spike remains for WEEKS afterwards.

I thought this was the case too, but recently some people told me otherwise from their experiences on Steam.

[Vino]

Perhaps mileage varies due to type of game and timing and so on. Steam sales aren't what they used to be anymore, not everything gets in the splash page.

[cliffski]

I thought this was the case too, but recently some people told me otherwise from their experiences on Steam.

My experience is that the sales revenue drops right back down to normal levels literally within hours of a sale ending.

[bvanevery]

IMO, giving $20 to feed some starving kids makes me happier than spending it on World of Goo.

It doesn't make me happier, because I have to weigh the political complexities of why the children are starving.  Domestically, are the local voters just too cheap to support food banks with their tax dollars?  Internationally, is a Third World dictator blocking UN food shipments?  Is the relief organization corrupt?  Are only the girls starving, are the boys eating fine?  Is the country mired in protracted war due historical conditions arising from the abusive control of capital?  Is the country an environmental cesspool, and who keeps making it that way?  Feeding the kid doesn't make me feel better if I know that it won't do any darned good, if it won't address underlying causes.

Whereas, I know that if I buy the game, I am entertained and that particular game developer doesn't starve.

[cliffski]

on a similar note to this topic, you might find this interesting:

I sold the exact same game at two different prices, on the same page, and saw how many people paid for the more expensive version:

http://www.positech.co.uk/gratuitousspacebattles/registernomads.php

Which was quite positive news :D

[Klaim]

Excellent information!

I still ask myself if it would have worked if it was a new product/name/author.

I guess that "build your name first" always apply for this to work.

[ஒழுக்கின்மை (Paul Eres)]

as an aside, i'm trying the pay what you want style thing permanently for immortal defense. when i first went on the model the sales for the first month were higher than average, but have now dropped back down to at or below average. i plan to continue it for a longer time to see how it works long-term, though. it's only been going on 3 months, so it's still too early to draw any conclusions from it.

i'm not making it 100% pay what you want though since i do set a minimum of $1.75 (like sleep is death). i think that's important because otherwise you'll be losing money when people buy the game for 1 cent. $1.75 is enough to ensure that at least a little money is actually paid for the game (and not just eaten up by all the fees involved).

[Christian Knudsen]

I'm interested in seeing how this works out for you in the longer run, Paul, as I'm of the firm belief that pay-what-you-want works best as a short-term marketing thing.

[Makai]

on a similar note to this topic, you might find this interesting:

I sold the exact same game at two different prices, on the same page, and saw how many people paid for the more expensive version:

http://www.positech.co.uk/gratuitousspacebattles/registernomads.php

Which was quite positive news :D

That's actually some really interesting numbers!

I wonder how much of this is due to the game and developer's "indie-ness" and if such an experiment would have similar ratios, with a more mainstream game and a face-less corporation behind it.
Would people be as inclined to pay for the standard edition if this was an Activision game? What about a Nintendo game?

[Vino]

cliffski, you're essentially doing what everybody else does with coupons and redeem codes, but cutting out all the bullshit in actually having to go get coupons and type in redeem codes.

[Zaratustra]

Another thing:

Pay what you want will get more publicity than a plain sale, and pay what you want plus charity will get even more publicity. Thus, your sales increase proportionally.

[moi]

pay what you want+ charity is the modern versioon of "pay me or I shoot the kitten"