The curious case of video games costing too much, how the long tail is ignored

I’ve recently been playing Deep Rock Galactic, an interesting coop game where you are a dwarf miner fighting off hoards of angry insects. It’s a fun little game that I’d recommend. There hasn’t been any new content released for a while for any of my other go to games such as Oxygen Not Included or Satisfactory so I decided I’d look around for a new game to play.

Like many people who use Steam I have an extensive “wishlist” but I noticed something strange when browsing through those games. The prices of some of these games are still stuck at their launch price, even years after release. Even those games that have reduced their prices, they still seem to be overpriced considering their age. This struck me as odd, not least because it seems like games publishers are throwing money away.

It’s well known in the video game industry that nearly all of your sales for a game come in a short time after the games release. The coverage is at its highest, excitement for the game is at its highest and interest is the highest it will ever be. The video game industry exhibits what is known as a “sales long tail”, big initial spike of sales then ever decreasing lower sales from then on.

But riddle me this, why aren’t games prices falling as a game ages? Why, for instance, is the very poorly received game “We Happy Few” still selling for $85AUD on Steam? Why is “Divinity: Original Sin – Enhanced Edition” released in Oct 2015 still $57AUD? Why is “A Hat in Time”, released in Oct 2017 still $43AUD? Why is “Hob”, released in Sep 2017 and abandoned by the developers still $29AUD? Why is “South Park: The Fractured But Whole”, released in Oct 2017 $90AUD?

Do these people dislike money?

Who, exactly, is going to buy the South Park sequel TODAY at $90AUD? Who is going to buy the Nuka World DLC for Fallout 4, released in Aug 2016 for $30AUD? No one. Now I know why they keep the prices high, it’s for when the Steam sales occur, then they can look like they are offering great discounts. But even at 50% off, would you pay $45AUD for South Park? It seems to me that by artificially keeping the price high you are grubbing for money that isn’t there. Why not instead keep lowering the price to maximize the buyers who would be interested. Everyone has a price, everyone has a scale of how much they would be willing to pay for a particular product and if a customer still hasn’t bought your game 18 months after release what makes you think they are going to when you pretend you are saving them money? Buyers aren’t stupid.

One of the things developers and publishers need to realize is that the buyers money is finite but the number of great games out there is almost infinite. With DLC and content patches gamers will often fall back to playing their go to games. Most games nowadays involve a significant investment in time and effort, you have to learn the controls, get used to the world, get past tutorials, learn about the characters, invest yourself in the story. Games are in-depth time sinks and so keeping your game prices artificially high just keeps new customers away.

So I call on developers and publishers, think more carefully about your long tail, there is money to be made out there, stop thinking in terms of a Steam sale and think about making money for the long term.

Update – The Summer Steam Sale

The “Summer” (hey I’m in Australia!) 2019 sale has started and it’s interesting to see the price reductions, or more specifically the “prices that the publishers/developers think the game is worth”. For example I complained about the price of “South Park: The Fractured But Whole”, it’s now on sale for $9AUD, a whopping discount of 90%! “We Happy Few” is 50% off for a sale price of $42AUD. So it’s clear, publishers and developers artificially keep the prices high so they can then offer large discounts to try and create a sales spike. This strikes me as a false economy since there are also hundreds of other games offering huge price reductions in the sale, instead of buying South Park at about $30AUD a few months ago when I was looking for a new game to play, I instead pay only $9AUD. Indeed I’m looking at a lot of the games on my wishlist and don’t want to buy them now because I just won’t have the time to play them. There is no point spending money, no matter the discount, on something I won’t actually play and I’m unlikely to want to buy them in the future when they are so overpriced.

Come on publishers and developers, think about this a little more. South Park could have been $30AUD for months and you could still have offered a massive 66% discount to get a sales spike but in the meantime have had more sales at a higher price.

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