Interviews & Opinion

Opinion: rethinking PC pricing in 2020

Opinion: rethinking PC pricing in 2020

Oscar Clark is chief strategy officer at Fundamentally Games.

The last few years have seen a bunch of games (especially AAA) experimenting with ways to make more money from their players. Unfortunately, with games like StarWars: BattleFront II and Anthem, this has not always gone down well with players; and some experiments in using Loot Crates along with upfront pricing have led to lasting, damaging impact on the associated brands.

This leaves a question of why this has gone so wrong; why have some games alienated so many devoted fans whilst others (also experimenting with methods of monetisation) have gone from strength to strength?

Pricing strategy

Let us start with an admission. I’m biased, whilst I’ve worked on PC and console, I’m most experienced with free to play on mobile, so I think it’s important to set an objective base line.

There are essentially three strategies for games to generate revenues:

  • Pay Upfront: The game has an entry fee without which you can’t play; sometime this include a free demo.
  • Microtransactions: Players buy items inside the game to improve their experience from battle passes to cosmetics.
  • Pay For Updates: Players buy DLC or other large content updates e.g. episodic.

Which strategy a game uses (including any hybrids) is a decision the developer must take to deliver the best value to the player against the cost of production and support requirements of the game. At the end of the day, we must understand the player and what motivates them – we can’t expect players to buy just because we think our game deserves it!

So, as a developer, what factors influence the decision on your purchase strategy? We are going to explore the role of price as a way of communicating value, how Exchange is more than just a cash transaction and the impact of long term engagement on the way games make money.

Price as expectation

As part of a study in the 1960’s called “Consumer Behaviour as Risk-Taking” R. A. Bauer introduced the idea that as consumers, whenever we buy anything, we experience a kind of buying anxiety. In terms of games, players hold off buying games or in-game-items unless they understand not just why they should care about the items, but also why they should be willing to set aside their other priorities to play this game, and why they should do that now.

On a recent edition of the Elite Game Developers Podcast, Jussi Autio of Resistance games talked about how setting price is not just a factor of what the developer wants as a unity profit margin and competitive pricing, but that the pricing is capped by the production values in the game, which in turn is impacted by the game’s development budget.

This implies that the art and audio of the game as well as the attention to detail are as important to setting a price as the ‘fun’ players enjoy. Would you pay more for Slay the Spire than The Long Dark? They are both considered excellent games. Personally, I find the Slay the Spire mechanics a joy to playtime and time again – but quite simplistic in terms of art. The Long Dark is an absorbing, frightening (at times) and beautiful experience and, for me, it’s those production values that tip the scale. It seems that we can’t just apply a simple price elasticity of demand model when we look at pricing for games.

Making access to the game free, as long as you can communicate its value, can make a tremendous impact on the volume of installs

This thought is echoed in Yannick Elahee’s 2018 blog post where he set out a table showing some example prices and (anecdotal) game quality expectations. He makes the case that the price of the game frames what players expect to get as much as any screenshot or gameplay video. A PC/console game priced under $5 is usually seen as either a bad game, or at least limited in scope.

Players expect ‘Good Indie’ games to be priced at £10-£15. Where games are priced at £40-£60, players tend to expect the very highest ‘AAA‘ quality production values and they will often be suspicious if this is not backed up by a AAA marketing campaign. This feels consistent with my own personal expectations and seems to be mirrored on mobile also, where a game released at $0.99 is generally considered bad.

Games which charge more than the lowest possible price, e.g. from $1.99 to $4.99, assume a kind of ‘quality’. Although, we can’t forget that the Pay Upfront market is mobile is very limited and it is harder to draw conclusions about patterns of pricing for IAP as the value propositions are very specific to each game.

For some players, there has historically been a sense that ‘you get what you pay for’, and ‘free games’ have been associated with poor quality or heavily Ad funded models. However, making access to the game free, as long as you can communicate its value, can make a tremendous impact on the volume of installs – and gives your game more opportunity to convert more people to potentially repeat purchases.

This presents a dilemma for any developer. They must decide whether to charge upfront for their game at all; not just what that price says about the quality of the game. This decision should also consider another factor. What is the value (and cost) of ongoing player engagement?

Exchange for engagement

Some games are singular beautiful nuggets of joy; a one-time experience where there are few options other than to use a pay upfront model. In these games, the ability to repeat play is generally a starkly diminishing return; and certainly not one which can be converted into a reliable income.

There are a handful of developers who have been able to build up a personal brand, such as Jonathan Blow or Mike Bithell, who have built up a community of players who look forward to each new game. For many other developers, they look to work with publishers to offset the risks; but fewer and fewer publishers are offering early stage, full development funding; which puts a lot of pressure on developers of this kind of content.

Where the game is not a one-time experience, and rather can be replayed, then the focus needs to be on business model which reflects the costs to the developer to support the game over the player lifecycle. This is generally where in-game microtransactions come in, or where the developer looks to offer DLC to players.
Unfortunately, in the PC world, both of these models haven’t always been implemented in the most constructive way.

Take Star Wars: Battlefront II.

Somewhat a disaster from a publicity point of view and the game missed its sales targets between October-December 2017 . The game controversially used both a pay upfront model with Loot Crates on top. The loot crates design they used locked specific unique content into a chargeable gatcha-like system, including items players reasonably expected to be unlocked as part of the basic game.

From the outside, this approach seems to have been motivated by an attempt to maximise revenue without really considering the impact on the player experience. This decision has had dramatic ramifications on the market and arguably has even led to changes to the legal status of an important monetisation method. This game isn’t alone. There have been numerous attempts to leverage what are seen as mobile monetisation techniques within PC games, and many of them have been commercial failures or have triggered a degree of player backlash.

Hiding vital content behind chargeable Loot Crates upsets players and can often feel like a sleazy attempt to squeeze players for cash. More than that it’s always important to be clear with your customers what they are going to get for their money, and make sure that the chosen approach doesn’t break the game in the process.

However, I believe there was another fundamental issue in the pricing model for games like Star Wars: Battlefront II and this is one I don’t think the PC/Console market has yet learned.

Charging upfront AND in-game. This approach can set confusing messages for players about what should and shouldn’t be included in the game. Games from Total War: Rome 2 to BattleField Hardline were accused of holding back content to include as DLC.

This approach doesn’t just undermine the perceived value of the game but can even impact the willingness of players to spend on subsequent content. This has happened before in mobile, for example the 2012 Activision release of Pitfall!, an endless runner based on the classic title. This game theoretically should have been commercially successful – but it had both pay-upfront and in-game purchases and failed to live up to expectations.

This act of charging upfront as well as for microtransactions is, in my opinion, a kind of corporate cowardice. Ok - I admit that this sounds a little harsh. However, it is likely difficult to persuade an organisation to remove an entire revenue stream that the company is used to receiving and replace it with in-app purchases.

However, the issue is that if you retain the upfront payment, you are setting an expectation for the player of what the game is worth. Only if you take that away can players make a free decision on what the microtransactions are worth to them. More than that, by removing the paywall, you increase the proportion of players who give your game a chance. This is just like players browsing in a store and being able to see what is on offer before they commit. 

DLC vs. battlepass

DLC is different from microtransactions. DLC is an episodic model to a large extent, but where the core game is given new features also, it can renew the engagement of the whole audience; not just those who pay. However, DLC relies on the idea that players have not yet moved onto another game and that they trust the reliability of the developer to deliver.

Charging up-front AND in-game sets confusing messages for players about what should and shouldn’t be included in the game.

Too many games put huge efforts into creating new content, levels and narrative that are hidden behind another paywall, meaning that an ever-decreasing audience gets to see what they are missing out on. The same content offered to all players, but with a microtransaction or BattlePass model means more and more players are exposed to the value of the content and therefore can decide to buy into it.

BattlePass is a model that seems to have come from the PC world (and is now seeing its place in mobile also). Whilst there are now arguments about its sustainability, I think it’s important to remind ourselves what is different about a BattlePass. Essentially, the key is that we show players what they will get extra if they subscribe, but where that extra only comes from playing the game more. At its heart, a great Battlepass is about rewarding ever deeper engagement from players. It is (or at least, should be) the antidote to the cynical monetisation strategies. However, it’s not without its own challenges.

Firstly, players need to understand the value. The content/customisation/options that a BattlePass gives the player must be genuinely meaningful. That means it can’t be linear. If you simply add another +1 you will run out of scope quickly. It also shouldn’t necessarily be one price fixes all. Players who love your game will all have a different level of value that they are looking for (and are willing to spend). You need to be able to offer people who genuinely love your game and are willing to spend, a value that works for them.

What are you selling?

At the end of the day, monetisation comes down to packaging what you are selling in forms that your audience wants. A pay upfront game is a package of experience which is easy to understand and consume. Adding DLC to the offer can extend its life (especially if you use smart sales/bundles alongside that. However, as games increasingly go online with the need to sustain communities, there is a need to find more sustainable models that reflect what those audiences want.

This requires a rethink of what content is. It is not just a new level or new feature – it is about the experience of the player. This means we need to rethink content in terms of:

  • Collections – what can the player collect and show off to others
  • Progression – what keeps them looking to the next objective; how do we celebrate past achievements
  • Optimisation – where can tactical dilemmas be built in, which drive meaningful choices and emergent strategies
  • Narrative – how are players witnesses (or even creators) of gameplay lore?
  • Other Players – at the heart of all aspects of the player experience. The most powerful content are other players.

In the end every game is different. However, careful thinking is needed about how commercial models can be applied to the player needs. Business model for games will be the most effective if they look at what players need – not just what went before or what players say they want. There are a considerable range of examples of great living games which have microtransactions, BattlePasses and season passes. These games set the expectation of value early and deliver on that, predictably and reliably. In the end that’s what community is about, a shared sense of endeavour and trust. regularly posts content from a variety of guest writers across the games industry. These encompass a wide range of topics and people from different backgrounds and diversities, sharing their opinion on the hottest trending topics, undiscovered gems and what the future of the business holds.