Regularity
Posts: 15
Joined: 3/28/2013 Status: offline
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Just found this thread today, so I'll throw in my two cents. I have some graduate economics and finance experience under my belt, although my primary field is political science graduate work. So I like to think I'm not talking (entirely) out my arse. Matrix games seems to need work on their sales side. There are a few major gaffs they seem to have made: First, poor sales strategies. In this case, their stealth sale. I bought Distant Worlds last month. On the product pages there are no indications of any sale or package discount, but when you actually put it in the cart and check out, you are suddenly shown that you do get a discount for buying them together. This means, in essence, they are only giving discounts to people who would have paid full price -- and thus they are losing potential money. The whole point of a sale is to attract customers that may not have bought it at the normal price, but since customers are not aware of a discount, it fails to do so. Secondly, yes, Matrix Games would sell more with discounted pricing. Game pricing tends to be largely inelastic above a certain point; people are often willing to pay $60 USD for shooting games, or racing games, or strategy games, despite the fact that these genres should require much different levels of difficulty or expense to create. It doesn't matter if the game truly is a superior product or not, the fact is the majority are not willing to pay above a certain threshold. Naturally, the combined price tag of over $100 (core game + 2 expansions) certain surpasses the up to $60 people normally pay for games, whether PC or console. (The $60 value I cited naturally varies from country to country due to discriminatory pricing, but you get the idea.) These whole "fun per dollar/hours" argument I keep hearing is great, but the majority of people do not make their purchasing decision this way. They do not calculate fun in dollars per hour, and even if they did, they can't make a rational calculation since they have not yet experienced the full game (and thus cannot know how much fun per hour/dollar they are really getting). Additionally, Distant Worlds uses digital distribution. That means once the game/expansion is created, the game has minimal marginal costs per unit (no packaging, shipping, storage, distribution). Once the game is built, making additional copies is practically free for them, save for download bandwidth costs. Even the labour costs of writing patches is irrelevant in the sense it would take the same amount of work to write a patch for 10 game owners as it would 10 million. So assuming that as a company's objective is to maximize profit, it doesn't matter how much they charge per unit, but rather, only the cumulative total from sales. Thus after subtracting bandwidth costs, for them, selling 10000 units at $5 each is almost just as good as selling 5 units at $10000 each.
< Message edited by Regularity -- 5/8/2013 8:41:21 PM >
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