The makers of World of Goo, a “physics-based puzzle game,” let customers pay what they wanted for the game — which normally sells at $20 — and a week after the offer, 57,000 people bought the game, bringing in over $100,000 in sales. A survey taken by some of the customers on the game’s website reveals the top two reasons customers chose to pay what they did: It’s all they felt they could afford, and they wanted to support the PWYW model. Few paid the amount they thought the game was actually worth. More analysis here. [%comments]
Pay What You Can Afford?
TAGS: games, pay as you wish
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I bought the game for the Wii, and would have gladly paid more for it. I’d want to support the small developers that make such an entertaining game, but Nintendo only let me spend $10. (Still haven’t beaten it though)
I find it odd that this blog frequently praises the “pay what you want” model and notes all of it’s successes… but when it fails miserably, as in this case when the authors received an average of $2.03 for a game they normally sell for $20, you don’t directly mention that in the post.
I’ve used this model before, and it works well for me. I only use it in cases where there is no per-unit manufacturing cost — desktop wallpapers, PDFs, etc.
When I sell hardcopy book collections I use a fixed price.
#2 Mike, how did it fail miserably?
Did you see the effect on their other channels?
“This one was a big shocker. Steam sales rose 40% relative to the previous week. Our Steam sales tend to fluctuate and it’s not unheard of for there to be a 25% difference from one week to the next (up or down) but the 40% increase came after a week that saw a 25% increase. It has been several months since we’ve seen this number of sales in a single week on Steam.
The effect wasn’t as dramatic on WiiWare. This week saw a 9% increase in sales over the previous week. Last week saw a 5% fall, and the week before it saw a 2% rise in sales. 9% seems like it’s large enough to have not been entirely caused by normal fluctuations.”
Bob and Howard are absolutely correct. The idea isn’t to sell the game at a certain price, but instead the goal is to maximize profit.
If they lose money on people who paid only .01, because of paypal costs, it seems they should increase the minimum price to .30 to break even on these transactions. While it seems there would be a huge elasticity from moving from free to .01, the elasticity of demand difference from .01 to .30 is probably extremely low. Id think the greater cost would be typing in all your credit card information or logging into paypal.
@Mike
How does it fail miserably? The game was released in October 2008, and most of those people who paid $2.03 would probably not even buy the game for $20 now, if they hadn’t already. The marginal cost per game is very close to $0 (they only pay the bandwidth for people downloading it). The way I see it, they just made $100,000 because of this business model, and I’m sure that number would be much less if they stuck to their previous pricing after the game has been released for over a year
…when it fails miserably, as in this case when the authors received an average of $2.03 for a game they normally sell for $20…
@Mike: That’s $2.03 from 57,000 people who, under other models, might not have spent anything. That’s not failure, and it’s certainly not miserable.
There may be other ways to accomplish this, and perhaps more effectively, but that doesn’t mean this method failed. $100,000 in a week? For a game that has already paid for itself through other channels? EPIC WIN.
One of the interesting pieces of data from their experiment was the discrepancy between what people paid, and what people reported to the survey that they paid. It’s clear that people lied about how much they paid, even when the only “listener” was an online, anonymous form.
I wonder if they reversed the order of events (asked people how much they were willing to pay before asking them to actually pay) if they would have gathered more revenue.