Alright, are you listening now? If you can stop crying about piracy for a second, I've got an updated pricing scheme for you. I've been thinking about this for a while. These are the prices I consider reasonable for your merchandise.
Album: $7. You can charge as much as $12 if you're selling an actual cd, but I should warn you, I'm about 4 times as likely to buy your album if it's available as an mp3 download, and I don't pay $10 for an mp3 album unless it's really hard to find and I want it a lot. If you charge less than $5 for an mp3 album, there's a ~70% chance I'll buy it out of mere curiousity. Think about that for a second. On another track, Microsoft might have the right idea with the Zune Pass, but I doubt it.
Song: $0.50. I'll pay as much as $1, but again, only if it's rare and worthwhile. $0.50 is insignificant to most people; for $1 I can buy a lot of things at the Dollar Store that I'll get way more entertainment out of than your song. No offense.
Movie (DVD): $5. Honestly, it's already an obsolete format, and no, I'm not going to pay $50 for a Blu-Ray. And why buy it when you can Netflix? I don't, because most of your movies are awful, but lots of people like it. Oh, and while I'm on the subject, anime companies, you guys are missing out. Let's see, I can buy two seasons of a show for $80, or I can download them for free? Tough choice.
Movie (Theater): $7. I'm willing to pay a little more for the experience, the atmosphere, the excitement, you know. But not the $10 that you cutthroat bastards try to charge for admission these days. Sorry. I think I see maybe one movie a month in the theater, and I grind my teeth at the cashiers.
Video Games: $10. I'll pay up to $25 for a big-name, 5-years-in-the-making, blockbuster game, but I'll wait as long as I have to for the price to fall that far. Again, if it's $5 or less, I'll probably buy it on a whim.
Conclusion: Look, here's two big companies that do this stuff really well already. Take a look at Amazon and Valve, and follow their example.
Amazon doesn't always make the best decisions, but they keep up with tech changes pretty well. Their pricing on mp3 albums is my favorite thing about them, even better than the Kindle: it's $7-$10 for most albums, sometimes even less. Yeah, I actually buy them! I started six months ago, and I've bought about one a month, I guess. You know how many CDs I've bought in the last 5 years? Less than 10.
Valve is famous for Steam, which makes it just as easy to buy a game legitimately as it is to pirate it, and for CEO Gabe Newell's crazy, brilliant, hilarious DICE 2009 keynote address back in February. Here's a summary, including this gem: "At 75% off, they are making 15% more money than they were at full price."
Well, that's all I've got to say. You other media companies can go back to
5 comments:
Attn: nonregardless RE: Money
Album: No.
Song: No.
Movie (DVD): No.
Movie (Theater): No.
Video Games: Hell no. Let's take that $25 you are willing to pay for a blockbuster video game five years in the making. And let's pretend that we sold the name number of copies as Super Mario Galaxy for the Wii, or about 8,000,000. So we've pulled in $200 million. Excellent!
Of course, it took us five years to make. So let's say $40 million a year. For one game. We're rolling in it.
Counting the names in the credits lets me know that ninety-seven people were involved in making it. So, heck, we could afford to pay them salaries of $400,000 a year! Excellent!
Unfortunately the names in the credits doesn't include those listed in groups, such as "NOA Product Testing", or the "Mario Galaxy Orchestra". And I suppose there might be overhead costs such as offices, desks, etc. for the folks to work on the game with. And we only made it to eight million copies due to constant marketing. And the power of one of the most well known video game characters of all time. And after giving the platforms their cut of the profits, development kits, etc., we may need to start cutting some corners.
Fortunately we can save money by distributing through Steam. Wait, that's only for PCs? And they still charge us for doing so?
And we haven't even started discussing profits, or what happens to the other games we make that DON'T end up being top sellers...
Conclusion a la "Comic Book Guy": "Let me summarize the proposed transaction. You wish to buy Bonestorm for 99 cents. Net profit to me, negative 54 dollars. [Opens cash register] Oh please, take my money! I don't want it!"
Hah, excellent points. I honestly hadn't deeply considered the amount of money a game costs to make. I'm certainly not trying to propose game developer pay cuts.
But at the same time, I don't think your criticism is entirely deserved. These days, I'm really just a casual gamer as best. I have one multiplayer fps I play with friends a few times a week, and otherwise I buy 2 or 3 games a year. And even then, I might not play them all the way to the end.
Game studies can still charge $60 a copy - serious gamers and fanboys will still preorder enough to pay the rent - but the games just aren't worth that much to me. I'm poor and a linux nerd. The cost of caviar might add up to $50 for a little jar, but I don't want it, so to me it's only worth $5. The value of a product doesn't necessarily reflect the costs to produce it.
By the time they put their game on sale, they should ideally have already paid off the cost of producing it, so everything else is pure profit. If they can't do that after a few months, maybe the cost of game production is too high right now. It's fine with me; I'll just go back to playing older games until the prices come down.
Do you see what I'm saying? The Comic Book Guy anecdote is misleading, because from the perspective of a middleman, a video game is a physical, rivalrous good, but to the game studio, it's non-rivalrous intellectual property. It costs them almost nothing to produce extra copies, especially with online distribution. If people buy enough copies of a game for the company to pay everyone's salaries for a few years, the company could decide to give the game away for free afterwards. Or sell it for $5 of pure profit. That was the general idea of this post, but I guess it wasn't very clear.
The downside is that sometimes, when nobody wants your game in the first place, you never recoup your costs. But you can't blame the customers for not wanting your product.
Oh right, that link you posted was pretty good. I hadn't heard of Greenhouse before, I like them.
> "The cost of caviar might add up to $50 for a little jar, but I don't want it, so to me it's only worth $5."
But in saying this, you admit you aren't the target market. Meat packing companies rarely ask vegetarians what they're willing to pay for ground beef for a reason.
I think you're also underestimating the costs of continued distribution of a product, even when physical media is not required. I've spent the past decade developing software which is distributed almost entirely over the Net. Older versions of software require a lot more time and effort to deal with than just the trivial amount of bandwidth. And video game companies have it even worse. There's bandwidth, tech support, community management, legal fees*, ongoing royalties to voice actors and artists, etc. And all the while, sales of already written versions of software are being used to pay for the development of new versions. Costs may decrease as scale increases, but it's asymptotic, never pure profit.
So what we have now is a system where early adopters and those people with money** pay their $60 for a new game, and after a period of time the games make it into the used/bargain bins for casual gamers to pick up for $10. It seems that a wide range of customers are serviced and the profit to the media companies is maximized.
So how is this media companies having their collective heads up their asses?
[*] You don't think Steam, for example, distributes games without a contract the size of a phone book, do you?
[**] Boy, do I miss being one of them...
Sigh, yeah, good points again. When I was writing this, part of the reason I put games at the end is because I'm well aware that I simply don't have enough disposable income to fall into the target market. And, like you said, games require more marginal upkeep than these other forms of media. Movies at the theatre are the closest on the list, and they're the other point where I don't fall into the target market because I don't have the money to go to the theatre 4 times a week.
I guess I feel frustrated that I could be in their target market, since I like their products and I'm willing to pay money for them. Admittedly, yeah, not as much money as they cost to make right now, but still, I'm not an incorrigible pirate.
In a lot of ways, the system works fine the way it is. But I really appreciate when Steam has a "weekend sale" that puts a game I like into my hands about a year before it would normally fall into the bargain bin. I hope it's a sustainable model for them.
Anyway, thanks for keeping me honest. I know you have a lot of experience with development companies, and I do consider your comments seriously.
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