24 replies to this topic

[DrSecretStache]

I'm hearing a lot of people bashing PGI and complaining about prices. I'm in the boat of "really really expensive and I'm not buying anything bigger than a hero commando," and I definitely agree that the prices are rather high, but whenever I hear someone say "they would make more money if they lowered their prices," I have to say that they are factually wrong. I'll try to explain in a logical manner.

Think economics, for a moment.

let's say that, if an atlas cost 2000 MC, 10 people would buy it. On the flipside, if it cost 3000 MC, 5 of those ten would still buy it.

If PGI started low to get more sales, they would sell 20000 MC, where if they stuck it up at the high price, they would net 15000 MC, quite a bit less, for sure.

However, don't stop thinking here.

Now let's consider if PGI had their thinking caps on and began high. They get that 15000 MC. Now, because PGI is intelligent, they eventually lower their prices down, and the other 5 decide to get it, thus resulting in a sell of 10000 more MC. The total profit would thus be 25000 MC, higher than both of the other options.

Thus, I believe that PGI is starting high, taking advantage of people who think mechs/ heros are worth that much, then will eventually drop the prices (and do sales to maintain interest) to market to more people.

I think this is a very intelligent way of handling things, as it maximizes their profits. Which doesn't hurt anyone. Call it greedy, but everyone who paid for MC and spent it on whatever was willing to do so, and if they follow this model, most everyone will eventually be happy in the long run.

Edited by Zoughtbaj, 01 March 2013 - 08:31 PM.

[Team Leader]

Ok. Well, I see what you're saying, maybe you're right, maybe some dudes with a bunch of degrees in economics came up with a master plan. Or maybe not. Maybe they just threw some prices out there to see what sticks. After the netcode fix patch, I got a 30 dollar pack. Used some to buy some paint later. The way I see it, it's a long term investment. I give the, money now, so I can spend it later when they have used my money to make a better product.

Edited by Team Leader, 01 March 2013 - 08:34 PM.

[Moromillas]

The average person can afford groceries, gas, and lodging expenses. Everything else is a luxury, I would need quite a bit of incentive to buy something in MWO, but that may be just me.

[Elizander]

Of course you are considering that everyone who plays is always here waiting on a sale. A 3 day sale or even a 10 day one will still have a lot of people missing out (lack of available cash, not hearing about it, etc) and you also have the people who stopped playing due to various reasons by the time you do have a sale. These are all lost opportunities during the time the items are not on sale.

It would be more complicated to figure out how many people who randomly check your items at random times of the day/week/month would buy if the prices were lower as opposed to how many would buy during a sale. Everyone who would have potentially bought a cheaper item will certainly not turn up on a random sale that's not announced long before hand (and really no one announces sales in advanced because people will -stop- buying until the sale comes around if they knew when it will be held). More people can possibly buy at lower prices 24/7 overall than during short sales to make up for those buying at higher prices.

There is also the promo fatigue that long-time consumers go through where sales will no longer appeal to them and frequent sales will eventually get more people to hold out from purchasing as they wait for the next one.

I'm not saying there is a perfect solution, but it's not so simple as stated either. Still, I've stated before that games with high prices can turn in more profit than games with lower prices and a larger playerbase. It takes a lot of study/analysis to get the prices right and it would be too dangerous to rock the boat now if IGP is satisfied with the current revenue model. That doesn't mean that they can't implement change though.

They can look to getting more players which equates to more sales and better for the long-term growth of the game as opposed to squeezing existing players dry which is generally bad for the long-term but might be good for short-term. Based on what Russ said before, they would prefer to get more players.

Now let's look back at the New Year cosmetic item sales. They did drop the prices of some of them very low, but they did not repeat that for the Chinese New Year items as well as the holographic House logo items. Conclusion? Dropping the prices that low for cosmetic items didn't really earn them a whole lot of money.

I still believe that MWO should have more high value items at the $6.95 and $14.95 price range. It can be item bundles (combination of items like Mech Bay packs - 5 bays for 1250 MC, 30 day Premium Time + 2 Mech Bays for $14.95, etc) in order to draw out more of the lower end crowd. Those are just examples, by the way! You normally do not put your best selling items on sale, but it is reasonable to have mech bay bundles because people will be more inclined to play and purchase more when they have lots of free space.

I still think that all MC-purchased mechs should come with a free bay to further encourage people to buy them with MC instead of c-bills. As an example, a player already has four mechs in his four bays and he sees that he can get a K2 for the $6.95 MC bundle, but without a free bay, he probably won't buy unless he is willing to fork out $14.95.

Edited by Elizander, 01 March 2013 - 09:07 PM.

[Chavette]

Which prices are getting lowered? A sale is a whole different thing, as the prices dont stay low. Your sceniaro about the price lowering bringing more profit is a one time thing, where as introducing mechs for lower from the start would make the profits better with every new mech.

[Mechteric]

gg, what you've just described I learned in a community college ECON 101 class known as Supply And Demand. Of course there's no supply limit really in this case being electronic goods so its more or less completely priced around Demand.

[Beeman]

I still don't mind the hero mech prices, though I can definitely agree that they're really, really high unless you're comparing them to WoT's gold tanks which are literally only good for farming credits.

However, I can't even try to justify charging five dollars(or a seven dollar MC purchase) to unlock a single shade of paint >_>

Maybe if you got every shade of paint...but honestly, paint color should be free and we should get a full color wheel. Camo, on the other hand...there should be lots and lots of that and it'd probably be okay for them to charge...250-500MC for the unlimited use version of each. Definitely not 750-1250, or whatever the prices are right now >_>

[Elizander]

Beeman, on 01 March 2013 - 09:06 PM, said:

I still don't mind the hero mech prices, though I can definitely agree that they're really, really high unless you're comparing them to WoT's gold tanks which are literally only good for farming credits.

However, I can't even try to justify charging five dollars(or a seven dollar MC purchase) to unlock a single shade of paint >_>

Maybe if you got every shade of paint...but honestly, paint color should be free and we should get a full color wheel. Camo, on the other hand...there should be lots and lots of that and it'd probably be okay for them to charge...250-500MC for the unlimited use version of each. Definitely not 750-1250, or whatever the prices are right now >_>

I haven't really given paints and camos a serious look yet, but I can understand how a customization fan would feel at those prices.

[Alistair Winter]

I think it's safe to say that most people whining about the MC prices probably have a very limited understanding of sales and marketing, let alone an education in economy, and base most of their criticism on common sense and anecdotal evidence. The old "PGI's prices are bad because I'm not buying anything" argument.

I'm guessing that the sale of MC is very important to the PGI business model, and so the prices are probably not something cooked up by a bunch of programmers, voice actors and 3d modellers over lunch.

[DrSecretStache]

Chavette, on 01 March 2013 - 08:49 PM, said:

Which prices are getting lowered? A sale is a whole different thing, as the prices dont stay low. Your sceniaro about the price lowering bringing more profit is a one time thing, where as introducing mechs for lower from the start would make the profits better with every new mech.

Perhaps I worded myself wrong. When I mentioned sales, I more meant that no they're beginning to use sales, where a couple months ago, and all the way back to CB, we never saw any such thing.

What I meant is that over time, if they're thinking economically, they'll lower the prices over time (in a permanent fashion, not a sale), opening up to a larger market.

Agreed, Elizander, that it's likely much more complex than I described. I think, though, that generally, they'll earn more money this way, if they permanently lower the price (of heros, mechs, and such) in the long run. I like your idea about saving up on MC... That's actually a reallly awesome way to think about it.

[verybad]

Marketing 101. It's not exactly a new concept. You can find this being used in pretty much any business.

[Grrzoot]

Moromillas, on 01 March 2013 - 08:44 PM, said:

The average person can afford groceries, gas, and lodging expenses. Everything else is a luxury, I would need quite a bit of incentive to buy something in MWO, but that may be just me.

but you can also afford a computer and internet? Is that then a luxury? Or is it today, a necessity?

[Elizander]

Grrzoot, on 01 March 2013 - 09:34 PM, said:

but you can also afford a computer and internet? Is that then a luxury? Or is it today, a necessity?

I think it's a necessity these days.

[DrSecretStache]

verybad, on 01 March 2013 - 09:33 PM, said:

Marketing 101. It's not exactly a new concept. You can find this being used in pretty much any business.

Tis true. Just seems like some forum goers around here don't realize that

[Moromillas]

Grrzoot, on 01 March 2013 - 09:34 PM, said:

but you can also afford a computer and internet? Is that then a luxury? Or is it today, a necessity?

It's a luxury, you don't need a computer to survive.

[Windies]

Moromillas, on 01 March 2013 - 10:03 PM, said:

It's a luxury, you don't need a computer to survive.

All the people on welfare beg to differ.

[Moromillas]

Windies, on 01 March 2013 - 10:19 PM, said:

All the people on welfare beg to differ.

No, you're not going to die if you don't have a computer. >_>

[ChrisOrange]

I thought the post was going to be something totally different...but yes when the system was introduced they had a 3rd party put these prices in. I'm pretty sure there was talks about some consulting something something to set prices for them.

I remember the rage about the initially high price mech bays but other than that whoever they brought in to do their prices did a good job.

[Abrahms]

PGI smart? haha, math is their weakest point. Look at weapon balance for the last year.

I think if they "are" smart and the prices are high, its because they know they already have a niche crowd.

Generally, especially for digital content, cheap is good. I can use your same reasoning, and say..

Make the price HALF of what it is, and sell 4 times as many = BOOM double the profit.



They have unlimited supply, so you want to find that point in the curve where sales * price = the highest. Right now, very few will pay these prices. It simply is not worth it considering what other companies give for the same amount of money. If they cut the price into 1/4, they would sell way more than enough to earn a higher profit.

EXCEPT for one big problem, they do NOT have the player base. There are too many other things wrong with the game. The only people laying are crazy mech fans... most of which will pay the higher price. For them to economically charge more means they KNOW they have few people playing.

[ChrisOrange]

No abram cheap is good when you want your goods to look cheap. There should be a perception of value and even the really expensive items can be considered "aspirational." If you want to buy stuff for less then you might need to wait for holiday sales etc.

This is a formula that's already been figured out by other games and I personally don't think MWO prices are too high. That said...giving out your money to beta games has JUST started to become more frightening...they don't all succeed...(warhammer WOH open beta for a year and shuts down) check first story:

Edited by ChrisOrange, 01 March 2013 - 11:06 PM.