wworld7
Posts: 1727
Joined: 2/25/2003 From: The Nutmeg State Status: offline
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quote:
ORIGINAL: Berkut The thing about software is that almost all of the costs associated with it is upfront and/or fixed. There is almost no marginal costs in selling another piece of software. It isn't like a car, for example, where the car itself costs the builder money to create, and NOT selling the car is preferable to selling it at a loss. This makes pricing, at least theoretically, very simple. The total net revenue equals Price of game x number of buyers. Whatever maximizes that number is the right price. Of course, the more you charge, the fewer will buy. So arguments about what the game is "worth" is largely meaningless - it won't be priced based on some idea that it is worth X or Y dollars. It will be priced where ever it must be to maximize total revenue. And I think (I certainly hope at least) that Matrix has a good idea where the right spot is - they've sold a lot of games using this mechanism, and are liekly to have pretty solid data about where the sweet spot is... However - the price of a game is not fixed - it goes down over time, at least in most cases. So part of their decision is the knowledge that the consumer, if they are patient, can "wait out" a high price. It will show up on sale somewhere, eventually. So that factors in as well - a too high price may simply delay purchases until it drops. Most of what you write is valid for the 1st printing of a software package, even though you leave out significant non-fixed costs like advertising, post release software work, storage etc. If a 2nd or 3rd printing is needed these costs are rarely factored in on the 1st run. Also, depending upon how the contract is written profit margins can go way up or way down per unit. There are many variables in the software industry, in the end value is up to each person to decide. For me, I would pay $1,000 for a 100% accurate port to PC of AH's Stalingrad, D-Day, Afrika Korp or 3R, but they will never happen.
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Flipper
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