How do you decide upon the price for a game?

Question

I hope this is the right board for the question.

I have this idea for a game, programming Skills with C++ and a licensed Engine. I already made a prototype of the game as proof of concept and a few friends liked it so far.

I don't want to spoil it all, but it is a 2D Robotron Style Precision Shooter in an arena which is set in space.

All you do is beating waves of enemies and when you leveled up, you select a perk to enhance your ship. Examples are making weapons stronger, faster, making the ship more agile, different Weapons as Smartbombs, Mines etc.

Having different maps with this kind of game is quite difficult, since space does not have obstacles. All you can do is make different backgrounds and maybe asteroids etc. Another type of content could be to allow the user to gather some virtual money to unlock goodies that are available at wave 1.

So far for my idea. Now, would this alone already justify asking 5$ for a game? When I compare it for example to puppygames game "Titan Attacks", I say yes, since they do not have more features. On their website the game is 7$, on Steam 4$. Their Ultratron is also 7$, which is also a classic robotron style game. But it does not yield any special features imho ( it is fun nontheless :D ), but has a very adorable artstyle.

Nation Red, which is also an inspiring source for me (Robtron Style 3D Zombie Shooter, awesome game btw), costs 10$ on Steam but also has coop, local and online.

So, how do you estimate the price of your game that you just made so people don't feel ripped off and you still make profit after getting back the investment of licenses?

Answer 1

Pricing is platform dependant. When your competetors are $0.99, you need to have a very superior game to charge $4.99 on an iPhone. But on the other hand, if you price at $4.99 on Steam you are sending a signal to potential buyers about the quality of the game you are offering... a signal that your game is very short/low on content or quality. Different channels have different pricing expectations.

In general you should price your game at a spot that you feel is fair, but offer a variety of promotions and offers to increase visibility of the game. Valve has discussed this on their blog, that developers always make more money when they sell their game at 75% off than they do at full price, because promotions get people interested and raise visibility. But that's not the same as PRICING your game permanently at the 75% off price point... people love deals, and when your game is priced at the lower point it's not a deal, it's just a 'cheap' game.

So find similar games to yours in the channel where you are selling and match their prices, but also offer frequent sales and promotions as this increases visibility and allows you to reach price points that raise your potential audience as well as increasing word-of-mouth about the game.

Finally, here is an interesting point from Gabe about game pricing: Now we did something where we decided to look at price elasticity. Without making announcements, we varied the price of one of our products. We have Steam so we can watch user behavior in real time. That gives us a useful tool for making experiments which you can’t really do through a lot of other distribution mechanisms. What we saw was that pricing was perfectly elastic. In other words, our gross revenue would remain constant. We thought, hooray, we understand this really well. There’s no way to use price to increase or decrease the size of your business.

So take what anyone says here with a grain of salt, because it's quite possible we're completely wrong. Your price point may really do almost nothing to your revenue, good or bad. Real world experiments trump any quantity of theory.

Answer 2

I'd be a little careful comparing to Steam, unless you plan on publishing there as well. Games on Steam have a lot of visibility, and that might skew pricing in some way.

Steam maintains market data for games they've sold in the past, and work with game publishers to set the pricing. From their FAQ:

Who sets the price for my game on Steam?

Pricing is very title specific, and we've got a lot of data and experience to help you decide on what the best price is for your title. We'll work with you to figure out pricing.

I really don't know a good answer for you though!

Answer 3

Don't. Go to a pay-your-own-price model. Yes, a lot of people will buy it for the minimum allowed price, but you'll significantly increase the visibility of your game (more buyers, more "just interested" people who'll check it for a low price and maybe buy again later, the chance that this is what will give you a spot on gaming news), and that's what will give you the greater gains in the long run.

This has been done by increasing amounts of developers in the last couple of years, and mostly with resounding success.