The Power of Relativity

This article was originally published in Game Developer Magazine. It was the seventh in a series of business columns that I am writing for GDM.

One of the most frustrating things a game developer will ever hear is “that [PERCEIVED GENRE] game isn’t worth [PRICE]—I can get [OTHER GAME] for [LOWER PRICE].”

It’s frustrating for a whole bunch of reasons. Your game might not be very similar to the games to which it is being compared, or might offer more content or replayability. Heck, you might simply think your game is “better” and deserves a higher price. But it doesn’t matter. The comparisons are being made and now you’re getting 2-star reviews calling your game good but your company “greedy.”

If that sounds familiar, congratulations: You are part of the very large and growing club of developers who underestimated the power of relativity. No, not E=MC2. I’m talking about the fundamental human tendency to compare everything in our lives to something else we’re familiar with. An organic apple seems ludicrously overpriced to you at $1.99 because conventional apples sell for $0.79, but that same apple would have seemed cheap if your grocery store only carried the organic variety and if organic mangos appeared nearby for $5.99 each. It’s all relative.

Psychologists tell us that something we can do to increase our happiness in life is to own the nicest house in our neighborhood. This is the exact opposite of what many financial advisors will tell you, but the psychologists are right—if you own the nicest house in your neighborhood, you’ll rarely feel jealous of your neighbors or dissatisfied with your lot in life (unless, of course, you spend a bunch of time driving around wealthier neighborhoods).

A huge part of traditional retail marketing is dedicated to countering and exploiting this fundamental human tendency. Retailers very carefully pick what products they sell beside each other. And they attempt to reel you into their stores with advertisements showing a product that you are likely to be familiar with, for a price you’re likely to perceive as cheap, while then upselling you in person on products (with high margins) that you’re less familiar with. (Who the heck knows what an 18k gold necklace in that shape, containing that stone, by that designer should actually be worth?)

Triple Town: The puzzle game that wished it wasn’t

So, to bring this back to game development: you’re making a game. Odds are, whether you like it or not, it’s going to be compared to some other game. And when that comparison is made, you will live the consequences. In the mobile world, more often than not, the consequences are rather predictable: you’re going to have to sell your game for somewhere between $0.99 and $2.99 or risk being perceived as “too expensive.”

You can try to fight this the way we did in Triple Town’s mobile edition. We believed that we had created something special, but we knew that nobody would pay what we believed was “fair” for unlimited turns. (Tricky word, “fair.” Your definition probably isn’t the same as mine.) So we gave people a limited number of free turns in Triple Town every day, with the hope that eventually the quality of the game would win over even the most jaded $0.99 shopper. It kinda worked. We started out with Unlimited Turns at $6.99 and consumers absolutely lost their minds with rage. How dare we charge so much?!? So we ratcheted that back to $3.99 and it seemed to work. We still get the occasional complaint, but in general we convert free players to paying users at a higher rate than most casual games achieve, and we do it at a price we feel comfortable with.

With all that said, what I want you to understand is that we did it wrong in Triple Town. Yes, even though we have a higher conversion rate than most traditional puzzle games.

We did it wrong precisely because we allowed ourselves to be compared to “most traditional puzzle games”; in other words, games that consumers are no longer willing to pay more than $0.99 for, with rare exception. It’s hard to be enthusiastic about spending the time to create something original and beautiful in a market that values it so little.

Realm of the Mad God: the anti-reference

Now take a moment and compare our experience with Triple Town to our experience with Realm of the Mad God. For starters, RotMG was generally resistant to comparison. What is an 8-bit bullet hell shooter MMO featuring permadeath and 80-man raids (in Flash!) similar to, exactly? More importantly, the things we sold within RotMG aren’t easily compared to other products. What, exactly, is a “character slot” in this context worth? What’s more inventory space worth? What’s a health potion worth?

Well, I’ll tell you: It’s worth what you’re willing to pay for it. No more, no less. But at least that number is derived from your intrinsic interest in playing RotMG (relative to any other game) and your personal opinion of a given item’s likely value to you. It is not derived from the arbitrary fact that Angry Birds sells for $0.99, and therefore your game should, too. What a concept… being paid in accordance with how much people like your game!

In other words, free-to-play games—especially original f2p games that defy comparison—have an opportunity to lift the goods that you are selling off the “supermarket shelf” and into a context that does not encourage such crude comparison shopping.

To be clear, this doesn’t mean “make a f2p game and you can charge whatever you want for IAP.” The perfect example of this is, again, Triple Town. Unlimited Turns are an in-app purchase that is nevertheless perceived by consumers as an upgrade to the “paid version.” Consequently, the game remains on the supermarket shelf and only manages to achieve a slightly higher sale price thanks to how extremely engaging and replayable it is. If you really want to break free of the supermarket, your IAP can’t simply be a thinly-veiled upsell to the full version of the game. It has to be different.

Relativity can help, too

Breaking free of unhelpful comparisons is just one side of this coin. The other side, of course, is to leverage the helpful comparisons. For example, in one of our recent games, Highgrounds, we generate essentially all of our revenue by selling booster packs of non-consumable playable units. Highgrounds has been described as “Magic: the Gathering without cards” and even though there are substantial differences between the games, we like that description so much that we’ve wholly embraced it.

The reason this comparison is helpful to us is that MtG has a very well understood revenue model. There are millions of people out there who appreciate the fundamental promise of the game: you can spend very little (or in our case, zero) and still have fun and be competitive, or you can spend a lot to really flesh out your library and enjoy a much greater diversity of strategic options. You don’t “pay to win,” you “pay to play differently.” Players really seem to respond well to this.

I should emphasize that our avoidance of “pay to win” is only part of the equation for Spry Fox. When the inevitable angry player complains about our business model in our forums, our fans often spring to our defense by invoking the long and respected history of games like MtG that have used booster packs as their revenue system. Even some trolls will grudgingly admit that they “get it” even if they “don’t like it.” That’s the benefit of comparing ourselves to a positive reference point as opposed to a negative one.

Markets matter

It’s worth noting that even if you’re planning to develop a traditional, non-f2p game, in a traditional genre, with all the traditional trappings, you can still make decisions that impact how your game will be perceived and compared. Take a game like Faster Than Light (FTL)—one of my favorite indie releases in the past few years.

If FTL had first launched on mobile phones at the exact same quality level and with an appropriate UI, it would have been unlikely to sustain a higher than $2.99 price point, and even that is questionable for an indie game of this scope nowadays. And once FTL had launched on mobile phones, it may have been branded as a mobile phone game and therefore somehow “not worthy” of a higher price without substantial expansion or improvement. But instead the game launched elsewhere, and was sold for prices as high as $10 with regular discounts to $5 on platforms like Steam.

If you ignore relativity, it doesn’t make any sense. Why should a game be worth several times more money just because it launches on Steam before it launches on mobile phones? Of course, you can’t ignore relativity, because your prospective customers certainly won’t.

If only I was selling coffee

It’s easy to feel bitter when someone holding a $4 latte says that your $2 game is overpriced. Unfortunately, bitterness won’t help you sell games, and there’s something to be learned from the fact that Starbucks can sell coffee for $4, or that Evian can sell bottled water for $3. These companies have marketing machines that spend millions of dollars convincing us to disassociate their products from cheaper and/or less-refined substitutes.

Their marketers are pushing a message: “you can justify spending a fortune on this water because we shipped it to you from a mountain spring in Switzerland.” And: “You can pay $4 for this cup of coffee because not only is it tastier, but you will enjoy the experience of drinking it in our comfortable and trendy café.” In other words, 7-11 sells you coffee; Starbucks sells you coffee++ and strongly suggests that you cannot compare the two.

Wrapping up

The bottom line is this: You are not purely at the mercy of the market. Every choice you make, from your game’s genre, to your game’s business model, to your game’s launch platform will have an impact on how your game is perceived and to what your game is compared.

You are the first person to describe your game to the public; you decide what, if anything, you’ll liken it to. You control the context of your in-game purchases, if there are any in your game. Think hard about what comparisons those contexts will invoke, and how you might make them more favorable. And of course, you are the one deciding how original your game will be, in general; you don’t have to make something with an obvious competitor if you don’t want to.

Everything is relative. We simply can’t escape that. But relative to what… now, that bit is up to you.