'A lot of people are still approaching it in almost a pre-Internet fashion'

Newell: Free-to-play ‘a pricing model wake-up call’

Free-to-play is a wake up call for the industry on game pricing models, Gabe Newell has claimed.

Speaking to Penny Arcade, the Valve boss said that more value can be created by involving customers into a game world rather than just extracting a high upfront fee, and it is something those in the industry should have adopted sooner.

“Pricing is one of those things where a lot of people are still approaching it in almost a pre-Internet fashion instead of seeing that there’s actually an opportunity to do a better job of delivering the right stuff to the right customer for the right combination of pieces,” said Newell.

“So if you look at free-to-play, that should be kind of a wake up call to everybody in our industry that we should have been able to figure that out sooner, that this realisation that a lot of customers create more value by being in the world than people were extracting by trying to charge them an upfront fee.”

Newell added that pricing structures should be seen “almost as a service opportunity”, with certain models offering discovery problems to customers turned off by high prices.

He also said that free-to-play and community contribution were “both just different ends of the same spectrum”, meaning that customers are attracted to titles that prove value for money on the way they play.

“If somebody’s a really good team member you need some way of recognising that and the simple way of putting it is that person pays less money for the game,” he stated.

“That’s sort of a simplistic way of saying they’re creating value, you have to capture that and if you fail to do it you’re being economically inefficient.

"That’s just a tiny way of rethinking about how everybody in the community is creating value and how you need to connect that to the right consumers and that’s what the value ends up being, not worrying about whether you charge $29.95 or $39.95, which actually causes you to pay attention to all of the wrong things.”

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