Say there’s this game you’ve been thinking about buying. It’s not at the top of your wish list but it looks interesting. You’re looking for something new to play so you go ahead and buy it. You play it and enjoy it. The very next day you discover some disheartening news. The game you just paid full price for? Steam sale! Fifty percent off! Stings a little, doesn’t it? But did you just get screwed? Indie game creator Jason Rohrer thinks you did and he’s determined to shield his fans from this type of pain, even at the expense of revenue and potential new fans.
In a recent post on the web site for his latest game, The Castle Doctrine, Rohrer outlines his pricing plan while going into lengthy detail about the reasoning behind it. The plan actually consists of two separate yet intertwined parts: a long term pricing structure and a vow to never discount the game as part of a sales event. The long term pricing structure is mostly logical and seems to be a pretty good idea. The vow? Not so much.
The first part of his plan makes sense. Rohrer is currently selling the game on his web site for eight dollars. Upon its Steam release on January 29 the price will rise to twelve dollars before settling at sixteen dollars one week later. This Minecraft inspired rising price structure fits well with the type of game that he is releasing. The Castle Doctrine is a massively-multiplayer game that depends on a robust and active community of players. Offering the game at a discounted rate initially is a great way to build that community early on. As the community grows the quality of gameplay will improve and the game will be worth more to players. Hence the rising price.
Sixteen dollars isn’t just the full price for now though, it’s the price that The Castle Doctrine will stay at forever. No gradual lowering over time. No discounts. Nothing. One of Rohrer’s assumed benefits for sticking with sixteen dollars for the lifespan of the game is that players who bought the game early will “feel smart” for getting the game at a lesser price. If Rohrer’s plan to build The Castle Doctrine’s community early on works, which it has every reason to, then word of the game will spread. As word spreads more people will become interested in purchasing the game. Should these newcomers feel less smart for arriving late to the party? Of course not. If they feel the game is worth buying at the asking price then they will do so. If not then they’ll move on. It’s not about being smart. It takes no intelligence to simply be aware of something before someone else.
Where the refusal to lower the price really falls apart though is in the long run. Interest in a game will naturally wane over time. As the overall interest decreases the price must decrease to meet the smaller demand. A player whose interest level is middling might not spend sixteen dollars on a game, but they might spend twelve or eight or four. If the price never goes down then that player is practically guaranteed to never buy the game. The creator has just lost money and a potential fan.
Rohrer addresses this in a follow up post on The Castle Doctrine web site. He states that by continually dropping the price there will eventually be a crossover point where the game ceases to make money. True, but if interest is low enough that no one is willing to buy the game then no money will be made at that point either. The crossover point is much earlier if the price never drops.
There are ways to keep interest in a game up, but they are unpredictable at best. Minecraft, for example, has seen its sales continually rise over time. This is in spite of the fact that the price has risen. How does this happen? There are many reasons including, but not limited to, constant updates, new features, and an extraordinary amount of free publicity through hours upon hours of player-made Youtube videos. Minecraft is a unique success story and an anomaly. Basing your pricing plan on unpredictable viral popularity is not the soundest of strategies.
Another example that Rohrer uses is Garry’s Mod, a game that has seen sales increase exponentially over time. Again, this is an exception to the rule and there are many factors involved. Garry’s Mod and Minecraft both have player created gameplay and extensive Youtube coverage in common. As reported on Rock, Paper, Shotgun, there is another factor that creator Garry Newman attributes to the success of Garry’s Mod. Steam sales.
As part of his promise to never lower the price of The Castle Doctrine below sixteen dollars, Rohrer has vowed to never participate in Steam sales, bundling, or any other event that will temporarily drop his game’s price. He makes his reasons very clear with the statement “sales screw your fans.” While some people may feel this way, it is quite an overstatement. A better way to say it is “sales may slightly annoy some of your fans.”
Whenever a Steam sale happens there will unfortunately always be people that feel the sting of paying more than someone else. Will these people be upset? Maybe, but it’s the nature of the business. If they weren’t willing to pay full price then they would not have bought the game in the first place. If they are reminded of this then whatever pain they are feeling should subside. If they feel cheated then they must not enjoy the game as much as they thought the price tag warranted. This is a completely separate issue which the Steam sale had nothing to do with.
Rohrer explains that the rising price model is essentially an inversion of a sales model. Sort of, sure, but either way you will still annoy certain groups of people. In the sales model the price drops which hurts people that paid full price. If you advertise a sale in advance then you mitigate the damage to the buyers, but sales could potentially drop in the interim between the announcement and the sale, thus causing a loss in revenue.
If you invert this scenario then the price will increase. If this is done without warning then you are going to annoy the people that didn’t buy the game the previous day. Same annoyance, different group of people. If you warn everyone of a price increase then there may be a rush to buy the game but sales will stop once the higher price kicks in. You still have a bunch of people buying the game at a lower rate.
Effectively these scenarios cancel each other out. You’re never going to make everyone happy and in general people will always pay a lesser price when given the option. Of course, these scenarios demonstrate how people will react only if they were aware of the game prior to any price changes or announcements. People who discover the game after the fact don’t play into this because they never had the choice to buy it now or later.
This is where a huge difference lies. Raising a price is not an effective marketing tool. It is extremely unlikely that a creator will generate any new sales from announcing a price hike. Sales, though, are great marketing tools. Steam sales in particular are events unto themselves. Many people look forward to them and are exposed to games they might have never seen before. They are also more likely to take a chance and buy a game on sale because, though their interest may be low, the price makes it worth a purchase.
This is also something that Rohrer talks about. He feels that sales often “trick” gamers into buying a game that they may not necessarily want or like. If they didn’t want the game then why did they buy it? Just to have another game? Then their need was met and the game served its purpose. And if they didn’t like the game after playing it? Well, there’s no controlling that at any price and at least they didn’t spend more than they did. There’s no inherent “trick” to a sale. It always comes down to the same thing: interest level versus price.
Rohrer seems to focus on worst case scenarios and protecting his existing fan base when ruling out sales and price drops over time. The main issue that he fails to address is that sales and exposure mean more people are playing his game. More people means more potential fans. When the time comes to put out his next game he will have more people willing to pay a higher price because their interest level is high. No sales and no price drop means his fan base will cease to grow. It can’t get bigger if new people aren’t even trying the game. This is not a good plan for long term growth.
Jason Rohrer has made his choice though. He chooses the possibility of sacrificing long term growth and revenue for the sake of not annoying a portion of his pre-existing fans. This is admirable, but I won’t buy a game because the creator is an admirable person. I’ll buy a game because the price is right.