Nostalgia For Coin Op Video Games Doesn't Include Actual Money
from the this-again? dept
For some time, people have been hailing micropayments as the next big thing, and the savior for online content. Though there have been several attempts at getting people to pay small amounts on a per use basis (an article, a chapter of a book), most have failed. Still, that hasn't stopped content creators from trying. Now a company is trying to apply them to online games, likening themselves to a video arcade, and asking users to pay $0.25 to play a game. But the economics of online games is very different from a video arcade. In the arcade there is a scarcity of machines, so prices help with rationing. There is also the high cost of the machines themselves, which have to get replaced from time to time, suck electricity, and need repairs. In the online world the marginal cost approaches zero and there is no scarcity. Though asking for a quarter isn't much, when combined with the mental cost of making a per use payment, users will seek a free alternative, of which there are many. Instead of trying business models that impede internet users, companies should look for methods of leveraging free content instead.
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My guess is that a pay-per-game site hasn't prospered because for two simple reasons: a.) no great content that is geared to a low pay-per-game scenario b.) registration/payment is a pain in the butt.
The microeconomics of micropayments doesn't make any difference if your product SUXS.
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As Long As The Smarter Pirates Still Serve The Mas
He also says "if you distribute it, I'll make sure it's available for free over one of a zilliion different p2p or bit torrent networks". It fantastic that companies think they have a product worthy of payment, those in the know will always be ready to pirate it for those who think payment is a virture of deed, not copyright.
"They'll Never Catch The Real Napster!!"
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Anyway, I never liked arcades because I hated paying per game. No way in hell would I sign up for a system where I had to pay a quarter per game. I just recently signed up for GameTap, where it's a flat fee of $15 per month for lots of games. Granted, most suck... I figure it might be amusing for a while, and maybe I might end up paying more than if I payed per play, but knowing that starting a game would cost me a quarter would be a great incentive to go read a book.
Hmm, maybe I need to find a system where I have to give someone a quarter every time I take a bite of food, and I could lose some weight.
The only models I see working are flat fee for infinite, or pay once to own a game
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Online arcades won't work
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Information wants to be free
Give everything away and make your money on advertising!
Watch your venture capitalists cringe and pull away from the table as you announce that your brilliant "way to make money while giving away content" plan shows a return of -$100 per user!
No one is forcing you to pay 25 cents for an online game. Free games are out there. If you don't like paying for online games, then don't. Just don't whine "games should be free because it's on the internet" and trash those who are trying to build a business to bring new and innovative games to the marketplace. I'm not affiliated with, nor play this company's games, but I do know how much it costs to run an online business. Click advertising rates have plunged through the floor. The only way to really make ends meet today is to charge people for their consumption of your product.
On the brick-and-mortar arcade comments. I was in the coin-op business. It's incredibly hard to actually make ANYTHING in that business. First, it's virtually impossible to find a place to open an arcade that's got the 4 requisites: foot traffic, low rent, proper zoning, and a landlord doesn't have a thing against a business that attracts a lot of teenagers who hang around. Once you have your arcade, you have to stock it with current titles. A small arcade, with 20-25 machines, might cost $250K to open. Then, you need an attendant, a repair guy (part time, on call), and prayers that your players don't decide to go on a rampage and destroy (or break into) the machines. Redemption and kiddy-gambling machines are the only profitable thing on the whole floor. So, enjoy the remaining arcades with actual arcade games while you can because they're not going to be around forever. The economies of the business are killing then off, slowly but surely.
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