In Part One of our publishing roundtable, we talked to publishers about setting release dates and how fewer triple-A releases could mean better business for the whole industry.
In Part Two, we discuss pricing. As more indie titles head to retail, the debate around games pricing has never been fiercer. We ask how publishers set their RRPs and what they think of today’s pre-owned market.
Getting your game in front of people’s faces is all well and good, but if the price isn’t right, then consumers are just as likely to put it back on the shelf or pass it up for something else as soon as they’ve seen it. Combine that with regular sales events, both on and off the High Street, and you’ve got a large section of your audience who are constantly awaiting the next big price drop.
Generating sales under these conditions can be difficult, especially when game development costs show no sign of slowing down. Despite this, though, most of our publishers say their strategy for setting a title’s RRP has remained unchanged in recent years, and it’s very much dependant on the title at hand.
“The game should dictate the price,” says Wired Productions’ managing director Leo Zullo (pictured below, left). “Consumers have an idea of their ideal value proposition, but we have to remember that not all consumers are the same. Targeting your products against the right consumers for it will often do much of the pricing work for you. However, development isn’t getting less expensive, so budgeting from the get-go is important. Don’t change your mind at the last minute.”
Green Man Gaming’s executive vice president Gary Rowe (pictured below, centre) takes a similar approach: “We look very carefully to try and set a strong SRP from the outset. The trick is to price as high as you reasonably can, based on the content and quality of the game. When analysing a new title, we research a cohort of similar games and then look at their pricing and sales velocity and make our recommendation accordingly.”
That flexibility is particularly important when it comes to pricing indie titles, says Sold Out’s CEO Garry Williams (pictured above, right), as there’s been some evidence that the previous “digital sweet spot” of £14.99 can sometimes go as high as £19.99. These so-called “triple-indie” titles are much better for publishers, too, Williams notes, as “anything in the boxed retail market at less than £19.99 offers little profitability.”
This is something Rebellion has been experimenting with as well. When the studio launched its Zombie Army titles, for instance, CEO Jason Kingsley (pictured below, left) recalls trying to set the RRP for this “good, niche game at a lower price point.” With Sniper Elite 4, however, he says it was “clear the game we were making was worth a full price.”
Merge Games’ managing director Luke Keighran (pictured below, centre), on the other hand, says his company sets a minimum price they’d like to sell at right at the beginning of the year. “In addition, we look to try and maintain $5 price parity between digital and retail versions,” he says. “We look to increase prices by adding value and added content that the consumer wants. We are also aware of competitive product’s pricing, too.”
Maintaining that price parity at retail isn’t always easy, however, as our anonymous publisher has discovered: “We have development and marketing costs to recoup, so we will always have that as a consideration on setting an RRP. However, you have a short window to recoup this spend at a higher RRP, before retail wants to write it down to clear through their stock levels ready for the next releases. There can often be a better opportunity at an initial launch to go out at a reduced RRP, to try and clear through more units.”
For THQ Nordic’s PR and marketing director Philipp Brock (pictured above, right), however, it’s all about adding as much value as possible: “[Retail] is very price-sensitive and also very aggressive. To counteract, we are constantly trying to price according to the quality of the offered content, meaning we do not only go out at full price, but also offer good value for money at lower price points as well.”
Soedesco’s exeuctive manager Hans van Brakel (pictured below, left) agrees: “As long as there is demand for your title at the time of release, you will be able to sell it. The price just needs to be worth it for what you are offering.”
PAYING THE PRICE
Sales, however, are still the bane of some publishers’ existence, with Zullo stating that current sales spikes are “insane.” As a result, “managing your lifecycle is essential,” he says. “Promotions are important, but only as long as they’re built into your forecasting.”
Rowe agrees, adding Green Man Gaming also only discounts titles “at appropriate promotional windows.”
That said, Williams warns that some digital titles often receive price cuts too quickly, leading to an ever-downward spiral of devaluation. “The price wars so far have mainly taken place on digital formats where the lack of visibility means that discounts have often been triggered with indecent haste,” he says. “These days, if you want to be in a digital promotion, your starting position will be at a minimum of 50 per cent in order to gain interest.”
There’s also the pre-owned market to consider, whose lower prices are once again great for consumers, but less so for publishers missing out on additional sales. For most of our panel, however, the pre-owned market isn’t a huge concern.
“We simply design games that we want to make and so far that’s been a pretty good way of generating big sales and well-received games,” says Kingsley.
Indeed, Maximum’s managing director Steve Powell (pictured above, right) believes the pre-owned market might have even “shrunk” over the past year as more and more publishers have taken to releasing either free or paid post-launch content to keep players engaged over longer periods of time.
Zullo agrees: “Pre-owned is what it is. There is a place for it. It gets word of mouth out there for your brand. We have a narrative game, but you can’t plan a strategy or development around the worries of it being played. If you’re that worried, create some DLC.”