It seems as though the price tag of video-games has
always been criticized as being too high. Now that we live in a world where iPhone
Apps are available for $1 or even $FREE, a $40 video-game seems outrageous in
comparison to many people. Perhaps $40 for a 3DS game is outrageous, but what
surprises me is when people scoff at the cost of $5 and $10 Nintendo eShop games.
Really? Now even $5 or $10 is too much for a game?
Where do prices of video-games come from, and why are
they important? From my perspective as a developer, and now a publisher on the
Nintendo eShop – aw yeah! – the price that my games are being sold at have a
distinct importance to me and my business. Take Mutant Mudds, for example. Let’s
say the development of Mutant Mudds cost a grand total $100,000 for all of the expenses
involved with the creation of the game, such as team salaries, equipment, etc. This
number is not real, but $100,000 is a nice round number that is not outside the
realm of reality. Games can easily cost much more or less than this. Beyond our
goal of entertaining people with our games, we also have the simple goal of
making enough money to continue operating as a business so we can make more
games.
If Mutant Mudds cost $100,000 to make, we need to make
$100,000 back to break-even, right? That at least puts us in a good place where
we don’t owe anyone any money. However, we must also make money beyond that if
we are going to be able to move beyond Mutant Mudds and make more games. Let’s
imagine we sell Mutant Mudds for $40 and our cut of that is 50% (that
percentage is fabricated, but it works nicely for this example). So, we make
$20 for each game sold. Nice! That means we have to sell 5000 copies of the
game to make our initial investment of $100,000 back. That is a very manageable
goal…
… however, the reality is that we can’t sell Mutant Mudds
for $40, for many reasons. OK, so let’s go to the other end of the spectrum and
price it at $1 with our cut still being 50%. Oh wow, we would need to sell
200,000 copies to make our $100,000 back. Hm, that might be a tricky goal to
achieve. Time for some perspective: our best selling DS game has sold around
100,000 copies worldwide. Based on how the average original non-licensed game
sells on the DS market, 100,000 copies is a big success. On a side note, we saw
no profits from this title due to the broken business model of retail – but that’s
a different story. OK, back on topic. Based on historical sales data, it’s
probably best to assume the game will sell around 30,000 copies – tops – in its
lifetime. It could certainly be a lot less, or a lot more. That’s the roll the
dice.
OK, so our expectations are 30,000 copies sold in its
lifetime. Alright, let’s work from that number then instead. To break even we will
need to receive basically $3.34 per copy sold (30,000 x $3.34 = $100,200). That
would mean that we need to sell the game for $6.68 to make our initial
investment back, with our cut at 50%. OK, let’s go crazy and sell it for a
whopping $10 now, with our cut still at 50%. Here’s the math: 30,000 x $5 =
$150,000. Hm, not bad at all! We make our initial investment of $100,000 back
and have $50,000 towards the next game. Considering Mutant Mudds cost a
fictional $100,000 to make, having $50,000 to make the next game means we
either need to make a game that requires less team members, less time, less
features, or we need to get some more money from somewhere else to make something
that is the same scope as Mutant Mudds.
And there lies the chaos of game development. In my
opinion, iPhone games have a greater chance of selling closer to 200,000 copies
due to the nature of the platform and the audience using it (they also have the
same chance of selling zero copies due to how flooded the market is). But, they
have to be the right types of experiences for the iPhone audience. I think it
is safe to assume that there are more people in the world walking around with a
phone in their pocket than there are people with a DS or 3DS in their pocket. The
phone audience is massive. However, this does not mean that this is an audience
of gamers.
The typical iPhone user wants to play a simple game to waste some
time, which cost them very little money to buy. Their investment is equal to
their perceived value of the experience they want from the game. There is
nothing wrong with this. I too want these types of experiences on my phone. I
think the part of me that wants this is not my gamer side. It is my casual
kicking-a-stone-on-the-street side. It is the side of me that finds it entertaining
to flick a crumb off a table. Is this / should this be what the typical 3DS
user wants from games? I think not. I think the 3DS audience wants games that
do more than just mindlessly waste some time. I think the 3DS audience wants
something different. I think they want games that entertain them. Challenge
them. Inspire them, perhaps!
Games that go beyond literal simple pleasures take time
and money to create. This will never change. If people are unwilling to pay higher
prices for richer experiences, then these types of games will cease to exist. You
know supply and demand and all that. We will then be left with a market full of
simple gaming experiences that offer the same value as what you paid for it.
