Why we don’t believe in sales, discounts and bundles

It’s that time of the year again : Steam summer sales! Yeah, loads of games at small prices! Like every PC players, I’ll probably buy a bunch of games (which will mostly stay untouched for the next months) but as a professional game developer, I’m more and more convinced that the whole concept of these promotions is toxic.

Why toxic? Because systematic sales and discounts contribute with other factors (mobile stores pricing, bundles) to decrease the commonly accepted prices of games to absurdly low levels. It’s now a standard gamer behavior to wait 3 or 4 months before buying any game because you know for sure there’s a major discount coming. It’s so systematic that it’s nearly stupid not to do so!

‘Most people don’t know how much it costs to make a game’

It’s now common place to hear or read complaints about prices of games daring to set a price above 10 or 20 dollars or euros. But most people have no idea, no concept of how much a game costs do develop. Damn, even a lot of young or inexperienced indie developers have absolutely no clue when they start! This is most obvious when you take a look at crowdunding targets of game projects. Usually teams are inexperienced and ask for ridiculously low amounts of money for projects that will most likely fail spectacularly… or teams are experienced and ask for ridiculously low amount of money because they know they will look bad and fail if they don’t. But experienced developers will do everything they can to get A LOT more than what they asked using stretch goals and such, secretly hoping that they will have maybe nearly what they actually need. You can even have those experienced developers collecting millions of dollars to create a point & click and still failing to produce a full game with that much. Ok no, that’s a bad example. This has to be bad project management or Jack Black’s voice acting costs way too much money…

‘Most games are not profitable’

Warning, I’m not saying that most games are not successful. It’s far worse than that, most games do not actually pay for the cost of their development : making them is a loss of money for their creators. Overcrowded stores, clones, overwhelming piracy, lack of marketing money… There are actually a lot of reasons for games to fail. And let’s not forget another common reason, for a huge number of small titles flooding the online retailers : they just suck. They bring nothing new, are poorly crafted and largely deserves to be ignored.

The thing is, you can’t expect studios to set their prices according to the size of their project only. It’s ridiculous. Indie games are a lot less work than AAA games but do also sell order of magnitude less copies. When a developer decides the price point of his game, he has to imagine a realistic number of sales he can reach and try to repay his investment.

No gamer, not even journalists should look down frowning on developers and say : “you know mate, I think your game doesn’t really deserve to be sold that much:”. Like I said, you probably have no idea how much money it did cost to make that game and the poor bastard is certainly more aware than you of how many copies, he’s likely to sell. And be sure that he DOES know higher prices will scare off a lot of people. He DOES know that similar games may be sold cheaper than his. He DOES know that a lower price will bring more sales… but at what cost?

‘Discounts, bundles, it’s now only a race to the bottom’

Everyone will tell you : being a deal of the week on Steam, being in the next humble bundle is so cool! You’ll sell ten or even a hundred times more! Yes but this will cost you 50 to 90% of every copy you sell if you want it to be effective. Sales you could have done at full price if you were a little bit more patient, sales you’ll never be able to catch up later. What you have actually done is decrease the price and value of your game for everyone and possibly forever. If it can be bought now for this price, why should I pay more later? I’ll just wait for a bigger discount because I know for sure it will come…

And sure it will. Right now, everyone seems to be pretty much desperate about all this. A lot of developers are ready to accept anything to sell copies of their games. The current belief is that if you sell a lot of copies of your game, even at extremely low prices, it’s better than nothing and it will always help the game sell better in the long run.

But personally, I don’t think it’s a good thing. I even think this is hurting the whole market. The old pay2play is sick and this is one of the disease. This is one of the reason, whether you like it or not that a lot of developers are heading toward free2play… and I f…ing hate free2play because I want to know how much money playing a full game will cost before I start. I hate free2play because except for very rare games they will cost you a lot more than pay2play games if you want the same quality and quantity. (Yeah Path of Exile, you are one of my rare exceptions and I love you don’t worry. I wish you were pay2play though).

This race to low prices is also a major cause to the DLC / Season Pass fashion of AAA games. Sure big publishers now sell their games with discounts similar to small games. But they make sure that what could be part of the initial game is now “additional content” to justify a game 150 to 200% more expensive at full price. So let’s not be too surprised that we are swallowing so much DLCs and season passes bullshit, it’s only simple maths.

‘No summer sales, no bundles for Drifting Lands’

I may be wrong but I sincerely think that playing along the promo / discount / bundle fashion is bad. Bad for us and bad for everyone. So we won’t. Drifting Lands will never be part of any sales, never be part of a bundle.

Oh, in the first months, we will use a discount. A significant and probably long enough discount, to compensate for the fact that the game is not complete or as “big” as we would like. Progressively this discount will decrease and completely disappear just after the official release. This will be a way for us to thank early supporters for their trust. Because it’s not a privilege for players to play an unfinished game. It’s a gift to the developers when they are kind enough to try the game and even pay for it when it’s not complete. So we want them to be sure, that no one after that will get the game even cheaper. Maybe years after the release but not while the game is really active and updated.

Later this year, we will announce our detailed pricing plan for Drifting Lands. Honestly, it’s not yet clearly defined. But I do know that we will not participate to this discount madness. Maybe it’s a bad idea in the current context, maybe we should do it exactly like others but there’s no certainty that this model even works. So, we will do what we think is ‘right’ and hope it will be for the best :)

15 thoughts on “Why we don’t believe in sales, discounts and bundles

  1. Ever think that gamers wait 3-4 months not for discounts, but because the game may either a) turn out to be a massive pile of buggy shit sold on a promise or b) the game at launch just isn’t worth the asking price.

  2. You contradicted the entire thesis of your article with this:
    “they just suck. They bring nothing new, are poorly crafted and largely deserves to be ignored.”

    99% of video games today meet these qualifications, this includes the multi-million dollar budget AAA titles. Even with the sales, some games that are 75% off their normal price I still won’t buy because, like you said, they just suck. I can count on one hand the number of titles I’ve purchased at full price the past couple years. In fact during this most recent Steam sale I only purchased older games to have in my Steam collection, games I’d already purchased years ago, save for the newest Tomb Raider which I picked up for $4, a price I’m not sure it really deserves because of how much Crystal Dynamics literally fucked that franchise.

    The bottom line is we need another large gaming industry crash like we had in the 1980’s, a figurative reset button so developers spend their $500,000 from kickstarter on actual development and not vague “other expenses” like celebratory parties for meeting their kickstarter goals. Although, crowd-funding game development I believe will always fail. As a developer I would not work as hard if I knew going into a project that I had the money needed for its development up front.

    Anyways, I just thought I’d let you know you are way off base with this article and you seem oblivious to the perils facing the gaming industry today. If you’d like to discuss this further you know where to find me. (everywhere)

      • My point is that good games don’t need sale prices and will sell at full price regardless if it is later sold in a sale or bundle. GTA V is a good recent example. Many people I know bought it at full price on console and again at full price when it was released this year on PC.

        Also yes, to answer your question. But we don’t need to wait. We can accelerate the crash by proceeding to not pre-order, pay for early access, or buy AAA trash titles at full price or at all. In an environment where large corporations like EA, Ubisoft, and Activision aren’t trying to milk their gaming consumers like cattle we won’t need steam sales or humble bundles. Until then, bring on the sales.

  3. You’d have a point… except you don’t.

    The very real problem here is that the majority of the commercial games industry, which can be defined as ESA aligned vendors, operate on a near entirely short-term profit model. As far as the accountants in charge of any specific title are concerned the maximum shelf-life of a game is somewhere around ~2~3 months. The maximum expected profit return is calculated to be ~99% of total income within that time period.

    This used to be an effective business model under boxed retail conditions; where retailers like Wal-Mart simply didn’t have the physical inventory space to offer a wide variety of titles across a wide rage of genre’s and interests. These calculations on the part of EA, THQ, Acclaim, Midway, Activision, and insert your own example of a large corporate ESA vendor with razor thin margins and failing business model, are what gave rise to the massive discounts now expected within various months of a product’s release.

    The reality is that the market itself has changed. Short-Tail Economic models built around brick-and-mortar chains with limited inventory space are no longer a valid economic model for modern day gaming. The primary case in point here is Star Wars: Knights of the Old Republic. The game featured across numerous sales on the Steam Network; routinely rising to the top lists not just in terms of total units sold; but also in terms of total amount of fiscal payment. The publisher, and former development staff, could not understand how a decade(s) old game was not just out-selling in numerical terms, but out-grossing in financial terms, games that were only 2 or 3 months old.

    What happened is that the gaming market from the client’s end transferred into Long-Tail Economic Models. No longer were games and application releases limited to only offering a return-on-investment within the brick-and-mortar retail chains limited shelf-life. Advancements in digital distribution; coupled with warehousing specialists like Amazon.com, gave rise to conditions under which titles could still be profitable not just 6 or 8 months down the line from release; but decades from release.

    Only… the ESA aligned vendors… still are trying to make a retail business model from the 1980’s as practiced by NEC, Sega, and Nintendo operate in a market that is dominated by Valve Steam, Playstation Store, and the Xbox Marketplace.

    Little wonder then that you think that Discounts and Bundles are toxic and unhealthy. Your economic model predictions and expectations do not conform, in any way, to modern consumer practices.

    What the ESA aligned vendors, and you as well, need to come to terms with is that the game you make today can still be a profitable return on investment against a Long-Tail Model. No, Long-Tail models don’t make make for multi-millionaires overnight. Long-Tail models do make for at least earning a living.

    In turn that means lowering the price of the game from the start; not chopping the price of the game off after a period of time derived from brick-and-mortar expectations. In turn that also means embracing that consumers might want a physical copy of the title; and will happily browse through an online catalog and order that title from a warehouse rather than going down to the local retail store.

    So: get your history right; get your facts right; take a few courses in economics from professors who are not trying to push economic models from the time of Burns and Allen… and then write your post again. This time; without making yourself look like somebody who stood up and asked me to roast their rear end.

    • I’m properly enlightened… No seriously, I’ve got a profitable business hiring 6 people comfortably and it’s been profitable for years. I think I have a grasp on reality thank you.

      Plus, I don’t deny the long tale model : “Maybe years after the release but not while the game is really active and updated.”. It’s in my text but at this point you were probably seething to teach me how things work in the real world. In MY long tail, constant price is justified by updates and support for the game, then only come the discounts. Thing is, we do not need the cash right away. It would be nice to speed things up, but nobody will lose his job if we don’t sell copies.

  4. I completely understand your point of view.

    Now, from my point of view: I work 10h a day. On weekends I mostly sleep and visit family and friends. On a good week, I’ll spend 1h playing some game (usually oldies) per day, and maybe a few hours on the weekend.

    I don’t mind paying good money for a good game. But I don’t have the time and patience I once had. I need a demo, to make sure I’m not giving money for something I’ll spend 20 minutes on and then forget because it’s not what I expected, or too steep a curve, etc.

    Will you do a demo? Some do, some don’t. If you don’t do a demo, I’ll just pirate to check it out, then buy it if it’s worth it (Papers Please comes to mind, as an example of a game I did buy full price after pirating). I hate when people don’t provide a demo, by the way.

    Now, most games I won’t buy because I simply won’t have the time to play.

    But, and here’s where this gets ontopic, if I do catch some game that interests me on a Sale… I’ll buy it on impulse. I might just play it for 1 or 2 hours, but I will buy it. Call it consumerism.

    It’s simple. The players who really love the game, will buy it anyway. Casual gamers like me will buy it for a sweet price, and then play it for a couple hours.

    I’m not disagreeing with you, or trying to support piracy, or anything like that. Just explaining what I do, and why I do it. I might be the bad guy here, in a sense.

    Hope your game works out and you do end up making money! You definitely deserve it :)

  5. Maybe.

    Then again, you have to look at the sick “preorder” and “premium content” phenomenon in today’s badly released Triple A games. People spend vast amounts of money on preorders and premium packages. And companies STILL turn out unfinished, broken, half-assed games.

    Why get charged top dollar for something like that when a player can wait a year or so, and benefit from the patching and content release cycle?

    Part of the problem is that game studios and publishers, while wanting ever greater revenues from games, are looking for rock-bottom levels of commitment to these products and their customers.

    Is it REALLY all that difficult to realize that this sort of lack of loyalty/commitment cuts BOTH ways?

    If a studio/publisher is basically on a “churn and burn” cycle, c’est la vie. But they have to know that they won’t retain ANY customer loyalty. And one or two bad product releases will essentially shitcan the business.

    • That’s really funny how you project shit you’ve encountered on us. Why should we endorse false promises and buggy games of others eh ? You don’t know us, you probably didn’t play our first game with which we were screwed by our publisher. And you don’t know how little we really need the money of any sale to actually continue to live perfectly fine. Because yes, we’re self sufficient without any sale and we do games for fun. With that comfort in mind, I can pretty much decide to sell my game however I wish to.

      I’ll do it with my ethic, my principles and continue to work hard to make a game you’ll find very good for a very reasonnable price without a discount during a reasonnable time. If I fail with you… Hey, can’t win every times !

  6. Totally agree and would totally buy Drifting Lands at full price.
    This madness has to end or we’ll only be left with million dollars AAA titles and crappy free games in the long run…
    Thanks for sharing your opinion about this problem, we need more voices like yours in the game industry.

  7. Alain, all,

    I read the responses to Alain’s article (as well as Alain’s post, of course). After reading a few, it came to me that all responses make very good points >generally speakingspecific cases<.

    I read that as a hint that the situation is not reducible to a single (even complex) analysis and to a single solution. This reminds me of the old story you can learn in business schools (or so I am told) : "why are there so many management books out there?" Answers to that question include "because there is a lot of money in selling business books if you can write a good (or well marketed) one" and "because there is no single, stable answer to 'how to manage things')".

    My point is that, as many dynamic markets, the game one is providing the ground for many battles and disruptions (whether predictable or not) : long tail, distribution via the web rather than in store, Game as a Service (so called streaming games on demand), economy of scales, better tools for building games (allowing small teams to do great games… or crap); the later allows for new entrants (the so-called indie newcomers, until they become successful enough to build their 3rd or 5th game).

    This is not a complete list, of course, I can guess that, for examples: more and more crap will come out from TakeTheMoneyAndRun studios; or failed kick-started games will slow the investment rate in these funding mechanisms [while the base of individual people funding games will hugely grow, I don't worry for KS here], etc. Many of these will impact trust (or not), piracy (or not), etc. Also, I have not even touched the mobile gaming thing.

    As a conclusion to my post… there is no conclusion as there is no single view point to any complex problem.
    Gilbert

  8. Hey Alain!

    I’ve found your blog waaay late haha, but enjoyed every single post. I suffered especially through the post about your publisher and that whole legal issue, I hope by now you have gotten some sort of solution there…

    I just wanted to write to say, first, I just downloaded your demo of “Drifting Lands” and looking forward to playing that to see how its turning out! I guess you really can promote your own game!
    The other thing is on this subject, while as a gamer I love sales and bundles, the only real incentive for a company to go that route would be to expand their customer base for a future sale. As players I believe we form relationships with games, and even developers in some cases. The Orange Box made people remember Valve. Whenever there is a massive discount on Portal 1, I gift one to a friend who hasn’t played them… and that friend will usually buy Portal 2 at whatever price. In short, I don’t think massive sales, discounts, and bundles help cover costs… I think they’re a sort of “investment” on future games where you might be able to recover or gain more ground. A demo is basically the same thing, play this for free and if you like it pay for more, sometimes I won’t like it and maybe you lost some money from me… but if you believe in the game, and its good, you’ll have a very satisfied customer flying through clouds and rocks and shooting things! Not to mention the free word-of-mouth publicity you might unleash. Hopefully later on it will be “If you liked Drifting Lands, check out our new game!” and have already plenty of people willing to give you money for it!

    Those are my thoughts anyways, in general I found your article very interesting and thought provoking! Wish you success on this and future projects! I will be paying attention!

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