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Double Fine warns indies against deep discounting

Double Fine warns indies against deep discounting

Thu 10 Apr 2014 7:54am GMT / 3:54am EDT / 12:54am PDT
PublishingDevelopment

COO Justin Bailey argues for premium pricing to avoid the same fate as casual games

Double Fine has warned indies of the dangers of devaluing their products, citing its new publishing initiative as a way of protecting against that outcome.

In an interview with USgamer, COO Justin Bailey expressed concern over the harmful side-effects of low price-points and deep discounting for indie games. By giving away too much for too little, he warned, indie developers could reach a similar situation as that found in the casual market.

"I think what indies really need to watch out for is not becoming the new casual games," he said. "I don't think that's a problem from the development side. Indies are approaching it as an artform and they're trying to be innovative, but what's happening in the marketplace is indies are being pushed more and more to have a lower price or have a bunch of games bundled together."

Double Fine is publishing MagicalTimeBean's Escape Goat 2, the first occasion it has assisted another developer in that way, and it won't be the last. According to Bailey, what seems to be a purely business decision on the surface has a strong altruistic undercurrent.

"Double Fine wants to keep indies premium. You see that in our own games and how we're positioning them. We fight the urge to just completely drop the price. That's one of the things we want to encourage in this program. Getting people to stick to a premium price point and to the platforms that allow you to do that."

"We're not looking to replace... we're trying to augment the system," he replies. "We're making small strides right now. Costume Quest 2 is a high-budget game. It's one that I thought it was best to have a publishing partner who can also spend some marketing funds around it."

Double Fine is not the first developer to express concern over the tendency among indies to drastically lower prices.

In January, Jason Rohrer published an article imploring developers to consider the loyal fans who buy their games full-price only to see them on sale at a huge discount just a few weeks or months later. Last month, Positech Games' Cliff Harris went further, suggesting that low price-points actually change the way players see and interact with the games they purchase.

15 Comments

Andreas Heldt
Managing Director

6 1 0.2
Yeah, he is right.
It is hard to find the right price for a product, but this devaluating of games and especially indie games have to stop or we will other problems, I think. So I agree with Doublefine

Posted:4 months ago

#1

Jim Webb
Executive Editor/Community Director

2,242 2,206 1.0
Justin Bailey.

Either that's a typo or this person was destined to work in the video games industry.

Posted:4 months ago

#2

James Berg
Games User Researcher

141 171 1.2
Steam Sales - paying more than $4 for a game actually feels expensive now. $7.50? Discounted AAA game that's maybe 6 months old. It's not just Indies. A lot of new gamers are growing up with F2P, and their reasonable price for a game is $0. It's a battle we may have already lost for a lot of people.

Posted:4 months ago

#3

Steve Wetz
Reviewer/Assistant Editor

192 491 2.6
And yet Steam has the data to back up that their sales strategy is viable... as represented by this chart.

Posted:4 months ago

#4

Morville O'Driscoll
Games Blogger & Journalist

1,512 1,294 0.9
It shouldn't be a hard-line for devs/pubs to walk, deep-discounting (or bundling) enough to draw the long-tail out, but without essentially saying "This game's so worthless, I'm happy to make 5c a copy on it." I don't think the issue is the discount (or bundling) itself, but rather when it occurs. Lyne released on Steam, and, literally 2 weeks later, it was in a bundle. That's just all levels of wrong, I think. On a lot of sites, the mantra has changed from "Wait for the Daily Deals" to "Wait for the Bundles".

There's nothing wrong with lowering your pricing expectations the longer your game is out, especially if you've got a sequel or DLC or something coming out soon. But to do it straight off the bat? To deflate your game's price because someone asks nicely (or almost)? Perhaps, rather than say these things in interviews, pubs and devs should organise basic courses in business practices and economics. In fact, companies like Valve and DoubleFine would actually be the best companies to do this - they can speak with a wealth of experience in things like sales data and economic/financial management.

Edited 3 times. Last edit by Morville O'Driscoll on 10th April 2014 7:02pm

Posted:4 months ago

#5

Rolf Moren
Freelance Marketing Consultant

36 22 0.6
The functions of price and demand are known since long and whoever has had more than a short economics class will be able to see the downward spiral we are in right now. Steam will, if unchecked, be the same black hole that the Apple App Store is today. I know that this is a business where economists are shunned and despised but someone should ask them what history can tell about the future of gaming.

Posted:4 months ago

#6
I agree, but this warning is about 3 years too late

Posted:4 months ago

#7

Christian Keichel
Journalist

626 853 1.4
I am not sure if he is right, in my opinion, you may loose some early full price sales, by regulary discounting/bundling your game, but my guess is that most of the bundled/discounted games are sold to people who wouldn't have bought the game for full price. I regulary buy bundles with independent games, I usually don't think twice, when I get the notification email that a bundle went online (I usually pay above the average) and I must say, 99% of the games in these bundles I wouldn't have bought otherwise.
There are bundles (like the Indie Royale Bundle), that feature games, I often didn't had heard of before the bundle, so I think bundllng your game with others greatly improves the discoverability of your game.

Edited 3 times. Last edit by Christian Keichel on 11th April 2014 12:39pm

Posted:4 months ago

#8

Andrew Goodchild
Studying development

1,235 396 0.3
Just out of interest, where did the Humble Double Fine bundle last year fit into this plan? I'm pretty sure they were very positive about the results of that.

Posted:4 months ago

#9

Nick Parker
Consultant

280 144 0.5
You see indies deliberately targeting dates for launching titles on Steam to maximise impact of sales periods; so maybe a month before Summer Sale which would then also pick up the Halloween and Thanksgiving Sales before year end. The positive side effect is always about marketing, creating awareness for a game to push the non-sales period straight flat line further up the graph.

I agree with the overall thesis that developers should not be afraid of charging higher prices, not only for the price to download then the cost of IAPs.

Posted:4 months ago

#10

Morville O'Driscoll
Games Blogger & Journalist

1,512 1,294 0.9
@ Andrew

That, of course, raises the issue of sales and bundles being more than simply the amount of money being taken. Both of DF's Humble Bundles have been as much about raising awareness of the company and their community interaction, as they have been about how much money is being made. And in this sense, there isn't a price that can be placed on their partnership with the Humble guys. Every company wants to be known for being "awesome". Every company wants to be loved. Every company wants good word-of-mouth to be spread (both from consumers, and the press). The DF Humble Bundles succeeded on every level.

Why devs and pubs are so negative on sales and bundles, when it's obvious that they're not just money-making tools? As Nick says, even something as simple as co-ordinating sales depending upon the time of year is a marketing tool, and one that I'm not sure if every developer understands the value of.

Edited 1 times. Last edit by Morville O'Driscoll on 11th April 2014 12:26pm

Posted:4 months ago

#11

Andrew Goodchild
Studying development

1,235 396 0.3
@Morville
I agree entirely. It still is deep discounting and seems to run counter to what this guy said.

Maybe he should be advocating care with bundles and sales, making sure they are done with clear strategy and goals, so that if you use them you make sure you realise the potential benefits. This would include the positive exposure gained from Humble, and the other points you mentioned.

However the quotes from Justin Bailey don't seem to be saying that, as much as discouraging the practice altogether.

Posted:4 months ago

#12

Ben Gonshaw
Game Design Consultant

27 28 1.0
Deep discounting and bundles effectively killed the 8bit home computer market in the '80s.
There was no reason to buy a full price game because you could pick up full games as a tape-mounted cover on a magazine.
The same race to the bottom happened for 16bit computers too, the only change - they were cover-disks.
Historically it's been a way to wring the final pennies out of a the corpse of the last gen and then the next gen comes along with a spring in its step and the market is refreshed.

What's worrying is that IAP, discounting and bundles are becoming the de-facto sales method - and no new gen can come along and change that model once it is established as the primary way of selling games across all platforms. Suddenly you can't make enough money from a game to survive and the industry collapses.

So the Bailey speaks good sense, but pandora's box has already been opened. I'm not saying it's a solution, but a radically new platform, with a garden-walled store could push high price point games exclusively and drive change. The gamesbiz needs help. I'm looking at you Rift to throw us a line, heaping expectation onto expectation.

Edited 2 times. Last edit by Ben Gonshaw on 11th April 2014 1:32pm

Posted:4 months ago

#13

Christian Keichel
Journalist

626 853 1.4
Deep discounting and bundles effectively killed the 8bit home computer market in the '80s.
There was no reason to buy a full price game because you could pick up full games as a tape-mounted cover on a magazine.
The same race to the bottom happened for 16bit computers too, the only change - they were cover-disks.
Cover disks usually came with 1 game per magazine per monthand even Zzap64! or Crash had usually not more then 2 games per issue. For comparsion here is a link that shows how much games got reviewd every month in the Crash magazine. You can easily see, that 1 or 2 games per month weren't much, compared to the number of games released.
Compilations on the other side were a great way of giving games a little bit more shelf life. In a market, where every month 20-30 games are released it was hardly the norm that retailers restocked games unless they were super popular, compilations and budget re-releases were a method to sell older games, that otherwise wouldn't had a chance against the new releases.
The 8 and 16 Bit Homecomputer market in europe was killed by the rise of the PC and not by cheap games, besides at least here in germany, PC game magazines come with cover mounted games since the mid 90s now and despite that germany is the biggest market for PC gaming in europe.

Edited 3 times. Last edit by Christian Keichel on 11th April 2014 5:49pm

Posted:4 months ago

#14

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