Why All Our Games Are Now Cheaper Forever

Spiderweb Software just started our annual sale. It's ten percent off everything we sell for the whole month of October. That isn't really news. We do this every year, and people seem to like it.

But this year, there is much more. We permanently lowered the prices of everything we sell. At least 20% cheaper (in addition to the 10% for the sale). For some products, much more. The most expensive game we sell is now $20, and that is likely to last pretty much forever.

It's a big mental shift for us, and I thought it was worth blogging about. I write about game pricing on this blog a lot, and I'm not ashamed of it. Right now, most of the huge revolutions in the game biz are in the new crazy pricing models, and there are still a lot of questions out there about the most efficient way to make a game make money.

Why It Took So Long To Lower Our Prices

We released our first game in January, 1995. That is a long time ago, and much has changed. A few helpful comparisons.

Now: Huge distributors like Steam and iTunes sell massive numbers of copies for low prices, and Indie developers make good money on huge volume.
Then: The World Wide Web barely existed and we scraped by on a handful of sales from AOL.

Now: A quality Indie niche game sells on big portals for ten bucks at most. More than that and people think you're crazy and move on.
Then: Most good shareware games sold for $25. It took me a very long time just to realize that that price isn't normal anymore.

Now: Indie developers can make excellent livings selling lots of copies of cheap games.
Then: Indie game developers were called "shareware developers," and everyone thought they were losers and spat on them.

Now: Want to pirate a game? It just takes 3 seconds of searching on Pirate Bay.
Then: Took five minutes of searching instead of three seconds. This actually made a big difference.

Now: Many new games are given away for free and make their money on micro-transactions from a portion of their users.
Then: FREE games? With micro-WHAT? What are you? A SORCEROR?

(The shift to free games is arguably the most stunning development in the games biz in a very long time. My prediction: Within five years, there will be a successful game that pays you a small amount to play it and makes their cash selling better swords or whatever.)

I'm a dumb person in plenty of key ways, so it took me a while to observe the key fact:

A LOT of money is being made by selling games for cheap.

So now , instead of selling our games for $25 or $28 (!!!), we'll sell them for $20 or $15. I know this still seems like a lot, but I haven't backed off on the key thing I've long said ...

People Who Write Niche Games Can't Charge a Dollar

If you're making a pretty, shiny, highly casual game with cartoon squirrels and you think you can find a million fans for it, go ahead. Charge a dollar. You'll have to.

But if you write games like mine? Low budget, old school, hardcore RPGs with lots of content? If I charged a dollar for it, I'd have to sell a copy to pretty much every interested human everywhere to have a chance of making money.

So I still charge an actual price, an amount of money that still feels like money. Maybe I should have taken everything down to $15. Maybe I'm being too timid in the price drop. But, in a sense, that difference doesn't matter.

There are two sorts of prices you can pay for a game: An amount that is so small you don't care, and an amount high enough that you do. Our newest game, Avadon: The Black Fortress, is $20 on our site and $10 on Steam. That's a big difference, but, in a very real sense, they have the same price: an amount of money that actually feels like spending money. We will always charge actual money, as opposed to pocket change. All I have done is slightly tinkered with the level.

Bonus Point: Why Is Our Game Twice the Price On Our Site Than On Steam

I get asked this a lot, and it's a fair question. The answer:

In any place where your game is sold, pick the price that will maximize the profits. This ideal price changes depending on the nature of the place where it is being sold.

Steam is a big, sprawling gaming bazaar where practically all of the games are cheap. People see a game, spend a moderate amount of money on it, and try it out. People experiment there, and you need to charge a price that encourages customers to pick you as their experiment. Also, if you charge $20 for your game there, it will be on a list with ten good games at half the price, so you will get murdered.

Spiderweb Software's web site, on the other hand, only lists our games. It is generally only visited by fans of role-playing games. People on our site are generally really interested in the specific sorts of games we sell, and so the higher price doesn't scare them off.

This sort of logic isn't my weird invention. It's basic business. World of Goo is $20 on the company site, $10 on Steam, and $5 on iTunes. Each marketplace has its own norms, and you price your game to maximize your earnings there.

And that is why games are now at most $20 on our site. Because of the current standards of the game industry as a whole, I think that will most likely increase our earnings overall. It might not always have been that way, but I feel it is now.

(And, yes. I set game prices to maximize my earnings. Of course I do. Astonishingly, some people seem to take offense at this. I don't care. I'm not going to neglect to send my kids to college just so I can satisfy someone's arbitrary standards of Indie cred. I'm too old for that, and children persist in their irritating need to eat food.)

So. Anyway. A Sale.

Our games are cheaper forever, and even cheaper than that this month. We're getting a lot more sales, and I don't feel like the dumb jerk that still charges $28 for three year old games anymore. If you like old school role-playing games, you could certainly do worse.

And it will be a while before I write about pricing again. Believe it or not, I have other things to say (and make fun of). Time to get going on that ...

Hulu Charging For Shows? Oh noes!

There are rumblings that awesome TV show site hulu.com may have to start charging for TV shows. This has resulted in the predictable Nerdhate and rage.

But come on. I'm no happier about this that you. But. Of course they will do this, and it's hardly a terrible idea, for two reasons:

Advertising Is Not An Infinite Pool of Money From Which We Can Drink Without Limit - If the net should have taught us anything over the last few decade, it's that, "Hey, let's give things away for free and make money from adventising" only works if you're Google. Hulu is an awesome, awesome deal. It's just too beautiful to live.

People Pay For TV Shows! - Look at iTunes. People will happily give a buck for a TV show they like if it's really easy and convenient. To say that nobody will pay hulu is ludicrous. Some people will turn back to torrents. People like me, whose time has value, will just pay the dollar.

People hate to hear this, but it's true. Making TV shows is difficult and expensive. If ads don't make enough money (and I really doubt that the handful of ads hulu shows pay the bills), they will have no choice but to start charging. It's just the math of the thing.

Some Kind Words About DRM. For Once.

Over the years, a lot of criticism has been thrown at DRM. (Which means Digital Rights Management. Which means tinkering with music and video games to try to make people actually pay for them.) A lot of that abuse has come from me. But I think this all this shouting at Electronic Arts and the RIAA might be starting to be a bit much, since DRM, at the heart of it, has a noble goal: To keep thieves from stealing things.

But I recently noticed one little place when where I think making games pirate-proof is resulting in a better world for everyone. In the interest of fairness, I feel obligated to point it out.

(Edit: When I say "pirate-proof," I mean "So difficult to pirate that nobody bothers," not "Impossible to pirate.")

Let Me Sell My Stupid Used Games! (Or not.)

When Half-Life 2 came out, around eight hundred years ago, I vented to everyone who would listen about how angry its new rights management scheme made me. You had to sign in through a Steam account (which, at the time, did scary things to my computer). And, to me far worse, your game was attached to your account, keeping you from loaning or selling it. This new game future seemed to strip too many rights away from users, and I wanted no part of it.

Lately, though, I've been finding that this is exactly the future I am living in, and I've been extremely happy. I'm having a great time, buying fun games for fair prices. I'm just doing it on the XBox.

The rights management in PC games is still generally hostile, punitive, and self-defeating. Requiring an internet connection to play a single player game or limiting the number of installations does nothing to prevent piracy (as hacked copies are always easily available from BitTorrent) but plenty to hurt legitimate customers. And piracy is rampant, no matter what. So the PC world is still screwed. (And there is increasing evidence that these problems are spreading to the iPhone.)

All I Want Is Fun, On the Cheap

But on XBox live, over the last month, I'm played Shadow Complex ($15), Defense Grid: The Awakening ($10), and I MAED A GAM3 W1TH Z0MB1ES!!!1 (a ludicrously low $1). These games are all seriously fun. They also have impenetrable DRM. I don't have to be online to play, but I can't sell or give away my copy. There's no piracy on XBox Live.

When the inability to share (or pirate) a product comes with a low price, I don't mind anymore. Defense Grid is ten bucks, and it's giving me more than ten bucks worth of fun. Sure, I'm at Microsoft's mercy, and I don't "own" the product, but hey. Ten bucks. And the manufactures can still make a nice profit at that low price (though probably not much lower) because ninety percent of its users aren't stealing it.

No DRM. But Plenty Of Injustice.

Compare that to the games I sell. I charge $28 for a new game. I would LOVE to charge ten bucks. But, to stay in business, I'd have to triple my sales, and that won't happen. Would sales go up? Sure. Would they TRIPLE? Almost impossible.

I have minimal DRM. People can transfer their registration to someone else if they want. I even have a one year money back guarantee if someone is unhappy. I've tried to be ethical in all the ways I want as a consumer. The result? My games get pirated like crazy, and I have to charge a lot to stay in business. I have a situation where honest people have to pay lots of money to subsidize the people who rip me off. The good people pay to buy games for the bad.

This, of course, infuriates me.

What I Wish I Could Do

I'm not going to be writing games for the XBox, sadly enough. My sort of games just work better on PC and Macs. But if I could snap my fingers and give myself the same absolute control over my games XBox Live has over theirs (in return for lower prices), I would. The freedom of the current system is nice, but it comes at too high a cost. The unfairness is just this side of intolerable, and it's only getting worse.

DRM is fair if, for what the corporations take, we get something in return. One of the problems with eBooks is they take away the ability to loan or sell the books you buy online, not to mention the lack of a satisfying physical object, and they still charge the same price for the book. What nonsense! Make the price of the books low enough to make people not mind what they are costing and I promise you the eBook business will improve.

DRM Has Its Points

DRM has developed a terrible reputation. Heck, it's earned it. But remember, the purpose of DRM is to prevent free riders (aka self-justifying weasels and morally damaged scumbags). None of us like being told that we don't deserve free things, but it's still true. If DRM enables products to be sold for a price that is cheap to users and fair to developers, it is something we should all grab with both hands.