shinygerbil wrote:Valve have made several comments about the effect of reducing price on sales. Namely, that reducing the price by half can more than double your sales, so in the end you may make more by selling it cheaper. They even mentioned that one indie game (they didn't say which) got something ridiculous like a 1700% increase in sales, or something. I'm guessing off the top of my head there, but it was something huge, and it furthers the point here, that hiking the price back up will do nobody any favours.
I believe it was something like 13000%. They themselves had a 3000% increase in sales with the L4D sale
Yeah - it's about hitting that "magic price" that we all set ourselves, that certain amount of money which in a particular context, we don't consider a "significant" investment. Basically it's the price below which you will impulse buy, rationalising: "For that price, I'll give it a whirl: if I enjoy it, bonus! If not, well, I'll have got a few hours entertainment and no harm done to my bank account.".
Steam know this, and have thier weekend promotions, which must make them and the game developers lots of new sales. My games list is littered with impulse buys from 1/2 price offers: Call of Duty, Penny Arcade, Garry's Mod, Flatout, Lost Planet, Far Cry 2. All of these games I had not bought at full price, for one reason or another, either I was unsure if I'd like the game, or just didn't want to pay full "just released" price for it.
I think this kind of behaviour is pretty normal. Many of my friends do the same thing, and pickup obscure (to them) games, just because they look tempting at a lower price. The reason that it's attractive for a publisher / developer should be obvious. As an example, take Far Cry 2. I wanted to play it, but after reading reviews wasn't sure I'd love it. Initially it was selling for ~£30 and that was just too much for a "gamble". When it was reduced to £15 on Steam, I snapped it up. For that price I was prepared to accept the chance of not enjoying it. At the initial price, that was a "lost" sale for Ubi/Crytek, I'd never have bought it for that much, but by reducing the price they got SOME money from me.
Additionally, I told one of my friends about getting it, and that I was enjoying the game. He bought it as well shortly afterwards, even paying full price. This is perhaps even more important for the publisher / developer than the cut of the money I paid myself: a personal reccomendation from a friend is much more likely to encourage someone to part with thier money than all the advertising you can buy. By stratigically reducing the price of your game, especially later in its lifetime, you will tend to extend the lifeitme of the game, by continually trickling in fresh players, and broadining your potential market by doing so through the friends and contacts of those new players.
PS: Thankyou to Chris for writing so honestly and openly about life within IV. Very few people, let alone companies, are able to be that honest, frank and objective about thier difficult times.