World Of Goo Tries A Donation Model, Publishes Results

from the people-don't-pay-based-on-value dept

We've mentioned the video game World of Goo a couple times in the past. First, when its creators got upset about silly regional restrictions that were put on the sale of the game, and later when they noted that releasing a game without DRM showed no change in the piracy rate. Yes, the game was widely shared, but at no different a rate than when they'd offered games with DRM. Recently, they decided to try a name your own price experiment to see what would happen. While I'm still not enamored by such pure "give it away and pray" type models, we do keep hearing success stories of people who have used them, combined with a strong and loyal fanbase.

Now they've released some preliminary data, showing that they got about 57,000 new sales, with an average price of about $2 (so, over $100,000 sales in a week -- though, that's the gross number, the net is less, due to Paypal transaction fees). They also added a survey, and found a key point:
Few people chose their price based on the perceived value of the game. How much the person feels they can afford seems to play a much larger role in the decision than how much the game is worth.
This is another good point that highlights the separation between price and value -- which too many falsely assume are the same thing. There were also a significant number of people who said they paid because they liked the "pay what you want model, and wanted to support it." So they were paying to support the model, rather than the game itself, which is interesting. I wonder if that component would fade over time as these sorts of models become more popular.

Either way, another case study in business model experimentation.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    Phillip (profile), Oct 21st, 2009 @ 6:14am

    I bought the game, but only paid a dollar. Not because it was what I could afford though. I played the demo and it was pretty good but not something I'd likely play much. So I figured I'd donate a dollar and have a game lying around if I ever get stuck somewhere and need something to do to kill some time. For 20.00 there is no way I'd have bought it, but for only a dollar I'll shelve it for some day in the future and they get a dollar (minus fees) regardless of whether or not I actually ever do play it.

     

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  2.  
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    Jon B., Oct 21st, 2009 @ 6:42am

    Re:

    Yikes... $20? Portal is roughly the same length (maybe even a bit longer) and costs the same or less. Portal is a MUCH better game overall.

    WOG was a really good game, too. Just short and not very involved.

    In fact, Fantastic Contraption (a Flash puzzle game) has a better game concept, and the main, basic levels are free. Fantastic Contraption isn't nearly as polished, pretty, and packaged as WOG, but it beats WOG on both business model and basic game concept.

    Don't know how I'd quantify any of these on just "fun" or even "fun per hour".

     

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  3.  
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    jsf (profile), Oct 21st, 2009 @ 7:14am

    I agree that a name your own price isn't a good long term business plan. I do think it is a useful research tool for helping you determine what price level will produce an optimal, and hopefully sustainable, profit level.

     

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  4.  
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    Headbhang (profile), Oct 21st, 2009 @ 8:01am

    Re:

    I'm inclined to think than the "name your own price" model has more value than is usually awarded in this blog, precisely because of the conclusions they reached in the study, which I have long suspected because of my own experience.

    People have a vast range of purchasing power and what they feel they can afford will vary a lot too. However, I think most will *always* prefer the official product (as long as it's not somehow crippled ¬_¬ cough, DRM, cough). By fixing a price in the age of piracy, companies are likely to lose everyone under that price to it, which I suspect is a very significant proportion of revenue.

    Of course, there is a risk that the total revenue will actually be smaller than the fixed one, but I think some measures could be taken to supplement this (such as a minimal price and some "added value" price points).

    After all, Techdirt's CwF+RtB is already kind of doing it with the different levels.

     

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  5.  
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    ABM, Oct 21st, 2009 @ 8:24am

    I can only afford $0.01... seriously?

    I'd love to see the corollary between people who paid less than, say, $0.25 (2D Boy says that anything paid below $0.30 they made nothing on, as it all went to paypal fees) and those who said they paid what they could afford. Really? You paid $0.01 and then said the deciding factor was what you could afford....

    I just don't like that kind of intellectual dishonesty. I mean, I'd respect their answer more if they said "I wanted this for free so I decided to pay the least amount possible." That's fine. Just don't claim that your budget revolves around amounts typically found in rental car ashtrays. Then again, maybe no penny-buyers did the survey; which says the buyer thought their time was too valuable to answer 3 questions, but the software they just bought was worth a penny...

    Of 57k sales, almost 17k were sales for 1 penny. Maybe pay-what-you-want models should have some sort of reserve price? Make the minimum $0.01, but add a $0.99 self-respect fee, just so the user doesn't get horrible post-purchase depression when they realize they're a tool.

     

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  6.  
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    bkaler (profile), Oct 21st, 2009 @ 8:27am

    Paid .50 cents

    I paid .50 cents, mostly because I own the BOX set of WOG, and it doesn't come with the linux version. Anyone who downloads WOG for 20$ from the site normally (well, once the linux version was released) got the linux version FREE.

    So yeah, getting something that everyone else was entitled to for free, for .50c sounded reasonable.

     

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  7.  
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    minijedimaster (profile), Oct 21st, 2009 @ 8:40am

    I bought this game a couple of weeks ago off of Direct2drive when they ran their 5 year anniversary sale and had this game among many others on sale for $5. My kids love this game, so it was worth every penny.

     

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  8.  
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    chris (profile), Oct 21st, 2009 @ 8:57am

    i didn't buy it

    i found it somewhere, played a few stages and decided it wasn't for me.

    i did buy crayon physics however, because crayon physics was awesome.

     

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  9.  
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    The Buzz Saw (profile), Oct 21st, 2009 @ 9:03am

    Re: Paid .50 cents

    0.50 cents = half a penny

    I believe you mean "50 cents".

     

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  10.  
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    Anonymous Coward, Oct 21st, 2009 @ 9:15am

    I just bought the game after reading this article. I paid 1.00. I took the survey and left the following comment:

    "i read the results of the experiment and thought that 1 - 2 bucks was the perceived value of the software. So I chose the low end of that price point. I could have done .01¢ but I think that those who paid .01¢ are being overly cheap and dishonest in that they would have done .00¢ if the could have because they were just looking for free software or to take advantage of the model and that just isn't fair at all. Realistically though looking at your data about sales with this model, i think you could make a huge amount of money with a price point of $7.00 but without knowing your development and overhead costs I can't say if that would cover your investment and allow for profit. If i were in charge of deciding what price to put this game on the market for and I based it on the results of this model, I would probably start with $10 and adjust up or down based on feedback, sales and demand. I have seen the box version in the store for $20 and I was intrigued but since I don't feel this game is a big budget type game (i.e. Halo, Prototype, Doom 3, COD 4 etc...) which usually start at $20 and up, I don't think many people will pay that much for a game that most likely is the type that is played as a time killer, just for fun, or goof off at work."

     

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  11.  
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    helter, Oct 21st, 2009 @ 9:31am

    Re: I can only afford $0.01... seriously?

    I tend to agree that this business model would probably do better with a minimum. Say, the cost of processing the payment + bandwidth to deliver the game (but an arbitrary $1 is good too).

     

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  12.  
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    william (profile), Oct 21st, 2009 @ 10:03am

    Re:

    uhh... you need to think through what you are proposing.

    You can't possibly start with one price and adjust up and down depending on feedback, sales or demand. It's the ultimate way to piss customers off.

    simply run this through a case.

    -start with $10
    -feed backs and sales data...etc
    -adjust to $15
    -people who bought early is happy (they got a deal!) People who bought it late is PISSED OFF for having to PAY MORE!
    *bonus* people view you as evil because you did a money-grab

    reversely
    -start with $10
    -blah blah blah...etc
    -adjust to $5
    -people who bought early is PISSED OFF for having to pay more and people who bought later is happy they hold out (they got a deal!)
    *bonus* people hold off buying until a price drop

    usually people are more tolerable on the second case because it's generally recognized that you have to pay higher price to be the first bunch of people to get the newest stuff.

    So as you can't see, companies can't be as flexible as you suggested on price.

     

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  13.  
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    Derek Kerton (profile), Oct 21st, 2009 @ 10:53am

    Re: Re: Paid .50 cents

    Sounds like bkaler works for Verizon Wireless:

    http://www.techdirt.com/articles/20071114/115632.shtml

     

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  14.  
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    Derek Kerton (profile), Oct 21st, 2009 @ 11:01am

    New Debate

    Mike,

    I'd like to propose a side debate on CwF + RtB, and on "Give it away and pray". Specifically, I'm concerned that these models depend on some level of affluence and disposable income. For ex: poor people will download all the free music, but will never buy a concert ticket. Consider Africans...not a lot of concert stops hit Kampala, probably for this economic reason. So what if Western economies get worse? A good business model should not depend on people being quite wealthy.

    "How much the person feels they can afford seems to play a much larger role in the decision than how much the game is worth."

    So what if we enter a depression? Westerners will start to choose and pay $0. Take the free music, but NOT go to the concert. Not buy loooooots of t-shirts. Not buy the signed book.

    How does CwF + RtB hold up in an era of low or no disposable income?

     

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  15.  
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    MarksAngel (profile), Oct 21st, 2009 @ 11:36am

    I got the game I paid $5.00, I thought it was worth that, as well I'm also a bit broke right now, so I thought $5.00 was a decent compromise.

     

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  16.  
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    TSO, Oct 21st, 2009 @ 1:16pm

    Re:

    I did EXACTLY THE SAME THING. Very unlikely I will ever play it, but hey, for a dollar, I don't mind it laying around.

    Such a pity though that Paypal will take about $0.40 in fees from them :( THAT's what we need micropayments for. Badly.

     

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  17.  
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    TSO, Oct 21st, 2009 @ 1:21pm

    Re: Re:

    There's a very good explanation for that, namely:

    TIME IS MONEY.

    You want it RIGHT NOW? Pay $$$$.
    You can wait a year? Buy it a year later and pay $$.

    Personally, I belong to the second group, more than a few people are in the first one.

     

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  18.  
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    Lisa (profile), Oct 21st, 2009 @ 2:16pm

    Re: New Debate

    "So what if we enter a depression? Westerners will start to choose and pay $0. Take the free music, but NOT go to the concert. Not buy loooooots of t-shirts. Not buy the signed book.

    How does CwF + RtB hold up in an era of low or no disposable income?"

    Same as any other entertainment business model would do in a depression. Very, very poorly.

     

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  19.  
    identicon
    Anonymous Coward, Oct 21st, 2009 @ 8:18pm

    Re: New Debate

    "A good business model should not depend on people being quite wealthy.

    So what if we enter a depression? Westerners will start to choose and pay $0. Take the free music, but NOT go to the concert. Not buy loooooots of t-shirts. Not buy the signed book.

    How does CwF + RtB hold up in an era of low or no disposable income?"


    Uhh...Please tell me you're not serious...please, for the sake of my faith in humanity.

     

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  20.  
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    Ilfar, Oct 21st, 2009 @ 8:25pm

    Extended period

    They've extended the time the deal is available out to October 25th. I've been wanting this game for a long time, but just couldn't bring myself to pay $20 for it. Ended up paying $2.50, which is a bit low in my opinion, but I couldn't afford the $10.00 I think it's worth. Insert sound of birds going 'cheep cheep' here :P

     

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  21.  
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    Derek Kerton (profile), Oct 21st, 2009 @ 9:19pm

    Re: Re: New Debate

    True enough. I'm just wondering if it would fare worse. In an era when people happily turn into Starbucks for $4 cups of coffee, there seems to be some discretionary income to spend. Even in this recession, there are still plenty of Frappucinos being bought.

    When people need to make more and more painful trade-offs in what they choose, the "pay nothing" option for media starts to look very attractive. This point was brought up by the gaming company's observation that people tended to offer "How much the person feels they can afford".

    What if a person with diminishing income were forced to decide: Give up that frappucino, or give up the payment for that video game (but still keep the game). I think I can guess which decision they would make.

    I suppose what I'm saying is, it seems that CwF + RtB is highly elastic with respect to discretionary income. If so, that would not be a desirable trait.

    While I accept your point that in a depression, all entertainment spending is down, I'll leave it to Mike to address whether his model has greater income sensitivity than past models.

     

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  22.  
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    The Buzz Saw (profile), Oct 22nd, 2009 @ 3:59pm

    Re:

    "I could have done .01¢ but I think that those who paid .01¢ are being overly cheap and dishonest in that they would have done .00¢..."

    PayPal does not permit me to pay 1/100 of a penny. Do you have a special account or something?

     

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