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Pricing is weird

positech.co.uk

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Re: Pricing is weird

#41

Post by photon_off »

zacharycohn wrote: post #37

There's a lot of interesting psychology in pricing. There was a case study (don't remember the link/source, I think it may have been in a TED Talk) a while back about how the existence of an option that people would be dumb to select can dramatically influence the outcome of the two options that make sense. Paraphrased example: There was a newspaper selling three packages: Newspaper only - $40 Online only - $60 Onlin…

For anyone interested in learning tons more on the topic of consumer behavior, here's a nice outline of the book "Predictably Rational" containing key points:

http://bookoutlines.pbworks.com/Predictably-Irrational

Plugging that into moreofit.com gives you an endless list of interesting consumer behavior articles:

http://www.moreofit.com/search/?q=http://bookoutlines.pbwork...

Re: Pricing is weird

#42

Post by patio11 »

tptacek wrote: post #21
jdietrich wrote: post #9

Interesting nudge - the background image for the "discount edition" button is a pile of maggots. Aside from that, patio11 is right - there's nothing good about this idea. If you can't immediately identify half a dozen horrible mistakes in this scheme, your first priority should be to do some reading on pricing.

This should be fun. What's your half-dozen?

Ooh, can I play?

1) Both prices are hideously underpriced. There is no difference whatsoever between $5.99 and $9.99 to anyone who has to type in a credit card, so repricing that would double post-fee revenues almost instantly.

2) You critically hit gamers -- who have the attention spans of ADHD squirrels hopped up on crystal meth -- with a wall of text just to get them to make a purchasing decision. You can check this with analytics, not one gamer in a hundred will actually read this argument.

3) The availability of software at $3 compromises any notion of it being valuable. You will not sell software to poor Africans. Do not price to be affordable to poor Africans. (If $6 is too expensive, $3 is not affordable anyway.)

4) Cost-based pricing. Don't mention it. Don't even think about it.

5) Sales work because they are scarce, time-limited events and they effectively segment customers who want the game today versus customers who want the game at the lowest possible price. Its a reverse auction, just like book publishing, AAA games ($60 ~ $70 on release day, $20 in a year), MMORPGs (pay for the box on release day, it will be free within a year), etc.

6) Showing your customers being penny-pinching lameos gives people social license to be penny-pinching lameos. It is like the broken window theory (evidence of anti-social behavior causes anti-social behavior), and you're breaking your own freaking window! If you wanted to highlight this, you would do something like I suggested for the Indie Game bundle here: http://news.ycombinator.com/item?id=1318841 -- give people options and highlight that the correct option is most popular without dwelling on how many people make the wrong choice.

Re: Pricing is weird

#43

Post by cjy »

photon_off wrote: post #41
zacharycohn wrote: post #37

There's a lot of interesting psychology in pricing. There was a case study (don't remember the link/source, I think it may have been in a TED Talk) a while back about how the existence of an option that people would be dumb to select can dramatically influence the outcome of the two options that make sense. Paraphrased example: There was a newspaper selling three packages: Newspaper only - $40 Online only - $60 Onlin…

For anyone interested in learning tons more on the topic of consumer behavior, here's a nice outline of the book "Predictably Rational" containing key points: http://bookoutlines.pbworks.com/Predictably-Irrational Plugging that into moreofit.com gives you an endless list of interesting consumer behavior articles: http://www.moreofit.com/search/?q=http://bookoutlines.pbwork...

*"Predictably Irrational"

Re: Pricing is weird

#44

Post by eru »

henrikschroder wrote: post #23
eru wrote: post #10

Earlier quoted context omitted.

I wish will make a new version of Master of Orion (the first part). The slider system was brilliant, as was having no `buildings' in your `cities'. MoO II, while itself a fine game, left that legacy, and feels much closer to Civilization than to MoO.

You should check out Sword of the Stars, they took the slider system from MOO, and they managed to make each race have a different form of FTL travel with pros and cons.

Thanks. The Wikipedia descriptions reads like Sword of the Stars could be the real sequel to MoO.

Re: Pricing is weird

#45

Post by getonit »

tptacek wrote: post #25
getonit wrote: post #2

No, pricing is fine, it's just that the anti-piracy brigade get more airtime than the validity of their arguments merit... as has been demonstrated ad nauseum by experiments such as this. It's almost as if they know damned well that their reasoning is wrong, and are just trying to milk as much as they can before the rest of the world catches up. Hey, wait a minute...

So basically your reasoning is that "you" should be able to set the price for "my" work.

How exactly did you work that out from what I wrote?

Re: Pricing is weird

#46

Post by getonit »

tptacek wrote: post #28
ericb wrote: post #26

Earlier quoted context omitted.

Hmmm... I didn't take his rationales seriously at all. I'm surprised you made the mental leap to think the stats might be made up, but not the leap to think that his cost based price might be fudged and provided solely to encourage sales at the higher pricepoint. I just looked at the genius of guilt-based discriminant pricing, and was amazed it worked . (assuming honesty in reporting)

Guilt-based pricing has been tried in lots of places, and I'm unaware of an example where it's worked well. Radiohead seems to have had the most success, and they grossed less on In Rainbows than any of their label releases (they're a confusing example because their experiment was also about disintermediating the labels, which was a success).

In Rainbows being a failure is the recording industry's spin and, as usual, once you stop taking the cherry-picked data at face value and look at the big picture, you find the complete opposite is true: http://techdirt.com/articles/20081015/1640202552.shtml

Re: Pricing is weird

#47

Post by bobds »

patio11 wrote: post #42
tptacek wrote: post #21

Earlier quoted context omitted.

This should be fun. What's your half-dozen?

Ooh, can I play? 1) Both prices are hideously underpriced. There is no difference whatsoever between $5.99 and $9.99 to anyone who has to type in a credit card, so repricing that would double post-fee revenues almost instantly. 2) You critically hit gamers -- who have the attention spans of ADHD squirrels hopped up on crystal meth -- with a wall of text just to get them to make a purchasing decision. You can check th…

I don't think $6 is hideously underpriced, considering that it is only an expansion. The core game costs $20. A third of the price isn't that bad a price point for game addons.

Re: Pricing is weird

#48

Post by JoeAltmaier »

henrikschroder wrote: post #15
JoeAltmaier wrote: post #12

Earlier quoted context omitted.

I still play MOO2. Interested: what are the "best bits"? I adore the tactical combat - can you defeat 3 inbound battleships with 3 scouts and a missile base? Ok it took 10 tries but what a blast when you succeed! Buildings on the planet were cumbersome - how to improve? Btw a group of us have designed a MOO-like collectible card game, in beta test, pretty cool if I say so myself. 400 unique cards so far (Stellar Conv…

The parts I really liked about MOO and MOO2 was that you could design your own ships in minute detail, and then duke it out fleet to fleet. Really matching ship layout against ship layout. The civ-like parts and research.. meh. MOO3 was just in shambles, I spent years on the message boards of that following the production, and the end result was.. crap. Some good ideas, totally botched implementation. Sins of a Solar…

MOO2 could have another improvement: let me design starbases, missile bases and ground batteries! Its so frustrating to capture Plasma Cannon and have all the ground batteries become worthless.

Re: Pricing is weird

#49

Post by tptacek »

getonit wrote: post #46
tptacek wrote: post #28

Earlier quoted context omitted.

Guilt-based pricing has been tried in lots of places, and I'm unaware of an example where it's worked well. Radiohead seems to have had the most success, and they grossed less on In Rainbows than any of their label releases (they're a confusing example because their experiment was also about disintermediating the labels, which was a success).

In Rainbows being a failure is the recording industry's spin and, as usual, once you stop taking the cherry-picked data at face value and look at the big picture, you find the complete opposite is true: http://techdirt.com/articles/20081015/1640202552.shtml

No, you are conflating two different issues. On the one hand, Radiohead demonstrated that disintermediating the major labels is a win (naturally, the industry wants to spin that). On the other hand, the response rate they --- one of the most popular and beloved rock bands of all time --- got from this promotion was... disheartening.

Think of it this way: Radiohead demonstrated that anything, even letting customers set their own price, is better than working with a major label. That doesn't mean letting customers set their own price is an economically sound move by itself.

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