The Price of Braid
August 7th, 2008To follow up on Geoff’s Braid post, according to Braid’s developer Jonathan Blow, the reason why Braid is $15 instead of say, $10, is because he was worried that it would turn into another “Space Giraffe”. That is, a game that only sold a limited number of copies at too low of a price to be profitable (which he’s especially worried about since he says he went broke to develop the game).
This seems to be a direct reference to this Gamasutra article, which claims that because of Space Giraffe’s dedicated fanbase, Minter probably could’ve charged even $20 (instead of $5) and come out way ahead.
I certainly sympathize with Jonathan’s worries here. If early reviews are to be believed, Braid is a perfect example of a unique, well-executed indie title which deserves to make money. But certainly, there should be a bit more thought involved on the price than what kind of debts you owe. Trying to maximize profit is certainly one of the trickier things to do, as raising your price, particularly to more than what probably 95% of the other games are on the service, could certainly have an adverse affect on sales. Let’s look at what this means exactly, though, to go from a $10 price point to a $15 one.
The difference in price, $5, means that at the $15 price point, you would be able to sell 1/3 less copies and come out the same. Or, to look at the opposite view, to go from $15 to $10 means that you’d have to sell 50% more copies at the $10 price to break even. So, you could sell, say, 10000 copies at the $15 level or 15000 copies at the $10 level and come out the same. It’s difficult to say whether, at this level, another 5000 copies would be easy to pull off or not, but based on other high-profile well-reviewed game, it seems a game like Braid wouldn’t have any trouble.
But, Jonathan is probably hoping for more than 10k or 15k of sales. Actually, according to Getting to 50 or 100k could be tricky, though. Even Penny Arcade Adventures, which started off decently in sales (and due to its higher price, very well in revenue), looks like it’s slowed down considerably and is only now in the 50k range. Penny Arcade Adventures was fairly well-received (and in my opinion a little underrated), but looks like it won’t sell as many copies (at least on XBLA) as some of the more popular games (that sell at least 100k) for at least awhile. Considering that 37,000 people turned out for PAX 2007 and they’re expecting even more this year, 50k, while respectable for a $20 game, doesn’t seem like all that much. The $20 price tag almost definitely hurt the sales for the game.
Could the same happen to Braid? It’s a little hard to tell, but in its first day it sold a decent 7706 copies, and they project it will sell about 22k in a week (which would already beat Space Giraffe). Can it hit 100k? I’m skeptical at the $15 price. Plenty of good $10 games have hit that level even when there wasn’t much of a “brand” before it (N+ comes to mind with 156k downloads) but there have only been a couple games priced higher than that, one of which was the aforementioned Penny Arcade, and the other was Lumines. Lumines has sold about 189k copies, but it’s price has also since been dropped to $10, and I’m not sure how many sold at the $15 price. The good news for Braid is that it only needs to sell 66k units at $15 to match the revenue of 100k $10 downloads. The bad news is that, if Penny Arcade is any indication, even getting to 66k could be tough. And alternatively, if N+ was any indication, getting to 100k at $10 for a well-reviewed game might not have been as difficult.
Posted in Business, Jeff, Xbox 360, Xbox Live |
August 8th, 2008 at 7:02 am
The thing about pricing is that it’s easy to lower a price and really difficult to raise it. So it makes sense to capture as many people as possible willing to buy the game at $15, then lower the price to capture the audience that might not have as high an interest (or who are attracted to the “bargain” notion of a sale price. That way you maximize your profit while not negatively impacting your unit sales.
Voila - instant price discrimination.
August 8th, 2008 at 10:05 am
Geoff-
That would be great, except there’s basically no history of Arcade games doing this. There’s a very limited number of games that have dropped in price, and only after they had been available for a very VERY long time. Only a few, I think, were re-advertised, so if you didn’t know about the price drops, you probably wouldn’t even see them.
I’ve been arguing for a long time that downloads, including DLC, should have “step-down” pricing, and for the life of me I can’t figure out why they haven’t done this more dramatically yet. This is exactly what’s done at retail to great effect, but the major publishers seem to be obsessed with the “price protections” that downloadable games and content offer them.
I suppose part of the problem for them may be how much the dropping of price actually spurs sales for older downloadable games. I’m sure it does something, as it does at retail, but maybe because most people have moved on to the next big thing and because of the basic difficulty of “browsing” all the downloadable games (versus just walking into a store and seeing a bunch of games on sale or clearance), it could be that dropping the price doesn’t do all that much for older games. And if that’s the case, the initial pricing decision is all the more important. Maybe a $15 game would sell about 50-60k and then another 10-20k when it drops to $10, but a new $10 game could sell 100k+ and just maintain its price for that much longer. I’m not sure, since there really aren’t that many examples out there. If/when Penny Arcade drops in price, we could maybe have a better idea.
I should just mention that Braid is also well worth the purchase price… unfortunately something that perhaps isn’t apparent to people until they actually purchase and play it.