When Your Pay What You Want Experiment Is Too Successful In Ways You Didn't Expect
from the challenges... dept
One of the interesting things to come out of the recent brainstorming session we had with artists and entrepreneurs had to do with the lack of really open discussions about experiments that fail. On the entrepreneur side, every so often you see someone write up a "post mortem" of a failed startup. But it's rare to see artists post a "what went wrong" discussion. This is completely understandable. Most people don't want to focus on what went wrong, and greatly prefer to focus on what went right. Admitting failure in any sense often has a stigma attached to it -- and while entrepreneurs can "walk away" from a failed startup, giving them some distance, for artists, a failed experiment in their artistic career (which is often "their life") isn't so easy to walk away from. And many of the artists in the discussion agreed that they could probably learn a lot from the failures of others, such as how to approach things differently and what not to do themselves. This is a topic I'm hoping to explore more in the future, as any reports of "what went wrong" really do seem worth looking into.This one isn't completely a "what went wrong" story -- it's more of a "what went too right and we weren't prepared for it" story. The folks at Good Old Games, who we've written about a few times before, recently put up a pay what you want bundle for Larian Studios' Divinity anthology of games. The setup is very clearly influenced by Humble Bundle. You can pay what you want, and if you beat certain levels you can get more things. There's also a leaderboard, and hitting certain checkpoints opens up new content for everyone.
Sven Vincke, of Larian Studios, recently wrote a really interesting post about how the "pay what you want" results were quite different than they expected. Despite having the examples of Humble Bundle and others for what happens when you do this kind of thing, Vincke still expected that people would pay very little for the game -- but that they'd get wider distribution. And they planned accordingly -- with the various "unlockings" based on the number of supporters, rather than the amount raised. But things didn't work out that way.
Yes, that seems like a reason to celebrate, but it also meant that the key plan -- to get the games more widely known and distributed -- wasn't working as intended, and the plan to unlock certain content at key supporter levels was looking unattainable. However, adjusting midstream might make people think that the whole thing was a flop -- when that wasn't the case at all. Clearly they were getting more support dollarwise than they expected, but the number of supporters was much lower. So they finally decided that the best way to handle this was just to be incredibly transparent about it, and explain why they were changing the levels to unlock stuff:When the PWYW was conceived, we thought that we’d have a lot of sales at the absolute minimum, which basically is 1 cent, and this assumption was actually never challenged. The idea of the PWYW campaign was to on the one hand celebrate 10 years of Divinity and offer Divinity virtually for free (1 cent really is low), thus increasing the installed base of Divinity fans, but on the other hand also to put the Developer’s Cut in the spotlight.
The Developer’s Cut (and Beyond Divinity) were made part of the campaign as a kind of bonus and to not completely ruin ourselves, we introduced the rule that to access the Developer’s Cut, you needed to be in the top 10% of customers. Whether or not that was a sound strategy is a different matter and open for debate, but that was the idea.
What happened however is that for some reason, people started looking at this like some sort of Kickstarter (this was the very first time something like this was done on GOG), and in the very first hours of the campaign, we saw the average pricing go to heights we never expected. Somebody even paid a 1000US$ for one of the games!!!
Because in reality, it is doing well – it’s just doing the opposite thing of what we expected. From a revenue point of view, we’re seeing the best results we’ve ever seen on GOG in such a short time span for our games. But that wasn’t the initial ideaOne of the things that I think is important to remember about all of these different business model experiments is that they are experiments. We still don't know what fully works, and lots of stuff goes wrong. Sometimes it's a complete failure, and sometimes (as in this case) it's just different than expected, so pieces of it don't work the way they planned. But, the main reason many of these programs work in any way is that there are fans who really like to support the content creator, and when the content creator opens up and explains the situation honestly, that only increases the loyalty and the connection. That's what likely happened here as well. While this one really is a success story, it's still great to see an examination of "what went wrong" in the midst of success -- and it would be awesome to see more of this kind of analysis.
So in the end we realized that there wasn’t a way of fixing this without admitting that we just predicted everything wrongly. And if we’d want to still offer those videos (and tech demo of LMK) as a reward for people keeping on participating in the PWYW campaign, then we’d have to lower the different tiers.
Which more or less is what we’re doing this evening. We’re going to lower the tiers to numbers that we think fit the current trend more or less, except for the last one, which we’re putting high on purpose. Well actually, I’m putting it high, because all the others in the team wanted to put it lower. But I decided to be stubborn
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Filed Under: case studies, expectations, experiments, pay what you want
Companies: good old games, larian studios
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In reality it was only PWYW for the 1st, beat certain levels for more. False advertising at its best.
The first game alone hardly qualifies as THE ANTHOLOGY.
They are a bunch of dirty liars, nothing more.
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Re:
When I got there, I learned that it was pay what I wanted for the first game and then I would get the rest if I met certain minimum prices paid.
It wasn't worth it for a few days until the minimum price for all three games was below what I was willing to pay day one. However, by that time, I lost any desire to buy it.
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Being Nice can bring you Money
Get the word out about your product.Put up a good website and even a blog/facebook/ETC.Have some folks there to make posts and answer fans.Give them a chance to pay what they can or want to.
Treat your Clients like Human Beings and reach out to them.
Good Service and Good Prices and Good Practice means I will want to see more of what you have to offer.So when you come out with your next LP or Film I would probably be there for you like your 1ST.
To bad MAFIAA as this is not you.Best thing for your Industry is for you to finally suffer the Extinction you deserve.You will never be like what I wrote of but a Local and/or Indie Art will be and that is the Future we should all want to see.
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Only counter needed is to quote the source:
"to not completely ruin ourselves..."
[Every time you use "brainstorming" I giggle. After these many years, you're still stuck on "Step 2". -- Like passing gas and mistaking it for a hurricane.]
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Re: Only counter needed is to quote the source:
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Re: Only counter needed is to quote the source:
'What happened however is that for some reason, people started looking at this like some sort of Kickstarter (this was the very first time something like this was done on GOG), and in the very first hours of the campaign, we saw the average pricing go to heights we never expected. Somebody even paid a 1000US$ for one of the games!!!
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Re: Re: Only counter needed is to quote the source:
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Re: Only counter needed is to quote the source:
Uhuh... I was going to just write that you make no freaken sense whatsoever then I thought nah.. let a quote say EXACTLY what myself and everyone else think about you and your weirdness
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Please use hyphens...
You almost gave me an exploded brain.
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Since the old kind of exclusivity is almost impossible. If it streams, you can build software to capture it, and to prevent that, you virtually need spies in every home (or every computer).
Will the time come when general-purpose computers will be considered too dangerous for ordinary people to use (could be used for lawbreaking) much like prescription drugs, cigarettes, cryptography, concealed weapons, face covering and so forth?
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btw, the idea of Connecting with fans, that Mike has been promoting is neither new nor a major replacement. It's just another way of selling your wares. And he has said that it wasn't new since the very beginning, and it has proved its worth many times over in the past god knows how many years.
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Not understanding human beings
This expectation is one I often see from our trollbase, too: that all anybody really wants is free stuff. It amazes me that people can hold onto this belief so tightly in the face the evidence counter to it that is literally all around them all the time.
This is a basic lack of understanding of how human beings work. Sure, people want free stuff. But they also want a lot of other things and very, very often, those two wants come into conflict. "Free stuff" doesn't always win.
People pay for things they can get for free all the time -- because paying for them gives them some other benefit than just the stuff. Those other benefits are very often much more compelling.
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Re: Not understanding human beings
How can we continue to keep thinking everyone else is a cheap evil bastard when these assholes prove them wrong time and time again?
...removes tongue from cheek... you would have noticed if not for the mask.
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Re: Re: Not understanding human beings
It's also misleading to a point when it comes to results. If you sell 10 units, 9 at 1 cent and 1 at $1000, it's easy to say "we made over $100 per sale". But statistically, you know that these outlier data points shouldn't be considered. The reality is that you sold the game for 1 cent average, and you have one odd sale for $1000. Basic stats tell you that the single big sale is exceptional and unlikely to repeat, so you really are selling for a penny.
"This expectation is one I often see from our trollbase, too: that all anybody really wants is free stuff. It amazes me that people can hold onto this belief so tightly in the face the evidence counter to it that is literally all around them all the time."
To me, whatever happens today (at the advent of this sort of business model) is the best results you will ever get. As more and more people come to understand that it really means "pay what you want" as opposed to "pay what is expected", they will shift to lower and lower price points, and perhaps just not bother to pay at all.
When you business model is predicated on a few people overpaying to support everyone else's free content desires, you are doomed to failure in the long run. It might work now, but it only takes 1 or 2 people to wake up and stop paying to pretty much kill the system.
Would it not be better to get $1 from each user instead of $100 from one, and nothing from the rest? The guy who paid $100 is going to feel like a right idiot when he realizes he was the only one that paid. Next time, he doesn't pay either, and you are left with little.
It's only a matter of time, it's human nature.
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Re: Re: Re: Not understanding human beings
Meanwhile, the Humble Indie Bundle seems to be doing just fine 6 times in a row.
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Re: Re: Re: Re: Re: Not understanding human beings
And what if the charity component helped boost the sales? Problem?
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Re: Re: Re: Re: Not understanding human beings
The current one has reportedly turned $500,000 gross. But spread over each of the works evenly, that is only $50,000. Then there is the question of how much of those sales go to charity, and of course, how much the charitable angle plays into people's decision to pay.
It's not quite as straight forward as your one line dismissal would make it seem.
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Re: Re: Re: Re: Re: Not understanding human beings
That was yesterday. Now it's up over $900k and there are still more than 5 days to go. It'll easily break a million and probably go noticeably beyond that.
You can say that's not a success, but you'd be laughed at.
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Re: Re: Re: Re: Re: Re: Not understanding human beings
Are you so desperate to slam me that you ignore most of my post?
Let me refresh your apparently feeble memory: "the Humble Bundle has pluses and minuses to it as well".
The question about the charitable angle plays as well, wondering how people would feel if there wasn't the proverbial starving orphan at the end of their price selection?
Nobody is denying that the Humble Bundle people are selling well. The question remains bottom line results for each of the participants.
Now you can you please stop putting words in my mouth?
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Re: Re: Re: Re: Re: Re: Re: Not understanding human beings
Hmmm... that's your normal tactic, isn't it? If I have a penny for every time I've written 4 paragraphs only to have an out-of-context phrase attacked by an AC while he ignores everything else I said...
Anyway, your entire criticism was based on the assumption of a $500k gross for the current project. Not only is that so out of date as to be completely misleading, but the current bundle is eBooks, not games - making it a completely invalid comparison. Why not compare the videogame bundles that have already finished - and are typically more successful than this one (the last videogame bundle grossed just over $2 million).
If you'd look at previous bundles, you'd see stories from developers about how much BETTER they have done under the scheme than they were without it. Remember, the income here is not their only possible income stream and many appear here after their initial commercial run. These are often supplementary sales that they would not have made without the bundle (I can vouch that most of the games I've bought through the bundle I wouldn't have bought at full price individually, for example). Literally, this is bonus money they wouldn't have otherwise had for most developers here. But, that doesn't fit your narrative, of course.
"The question about the charitable angle plays as well, wondering how people would feel if there wasn't the proverbial starving orphan at the end of their price selection?"
I still can't understand why you think this matters. People are more willing to buy something if part of the proceeds go to charity? Why is this a bad thing? It's certainly part of the reason why indie developers have gotten more of my cash than Ubisoft did this year.
Please, if you have a breakdown of what each developer gets from the bundles and how that compares to what they were getting prior to the bundle's release I'm all ears. But, lay off the cherry picking and the blind assumptions, OK? Let's all have a real discussion for once.
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/troll
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...now that I see it, Xkcd Volume 0 is nice. But kinda failing to see the value in getting an electronic copy of an eBook. But then again, some of the strips are just too large for physical print books. And I don't know if it's the same for the book, but the title-texts have too small of a font in the demo.
(not saying I'm against for-sale copies of webcomics, just that physical prints hold much more value for them)
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Re: Re: Re: Not understanding human beings
Human nature is exactly why a pay-what-you-want business model works. Altruism is part of human nature and this business model relies on reciprocal altruism.
Humans recognize when they are done a favor. Reciprocating a favor often leads the original party to reciprocate with an additional favor. When approached rationally, cooperation is the better long term investment for all parties.
In the case of pay-what-you-want, consumers recognize a company cannot provide additional products without financial reciprocation. If the consumer desires more products from the company, a reasonable payment will be reciprocated.
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Re: Re: Re: Not understanding human beings
I get called a freetard pirate quite often by you and your gang of asshats, so how does that work in your I'm just a freetard thieving pirate model?
Oh right I just must be an idiot freetard.
No what we are seeing here is it is human nature to fear that people won't give you anything, because you expect them to be just like you... moneygrubbing asshats. The problem is you can't imagine even for a moment anyone has a life different than you. This makes you blind to the amazing changes happening in the world, because you can only frame them around your tiny exposure to reality.
Your the poster child for the ZOMG if we lower the price and give it to them when they want it then they will all steal it!!!! Ignoring the idea that the consumer, the person you want money from, should be respected if you want them to pay you. It is insulting to pretend that if they can buy it for 99 cents they will feel it is worth less.
Your fear of lower prices is just fear of a lower paycheck, ignoring economies of scale and actually making the content available when the people with money want it, rather than sticking to a chart from the dark ages that has been copied over and over by monks in the cloister because a xerox machine is evil and allows it to be copied easily and cheaply.
My sense of scale and worth is just fine thanks. I pledged $500 to Dimeword for many reasons... the best of which was to give myself the change to tell you to go fuck yourself. You assume you know all about me, and you've made it clear you understand nothing about me and how I view the world. I don't see if how you demand it see it, that makes you cranky and makes me smile.
I remain...
TAC
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PWYW gone wrong
We had to put a stop to it pretty quickly because a large majority of people were ordering the vinyl version for the 1 euro minimum and we were risking losing a lot of money. We won't be doing that one again!
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Re: PWYW gone wrong
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Re: PWYW gone wrong
/sarcasm
* Disclaimer: this is not a pop at you Andy, just at the usual arguments that get trolled round here.
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Re: PWYW gone wrong
If people do not want to pay a minimum that covers your reproduction costs, your product is not profitable and you need to re-think your product. In your case, selling it digital reduces your reproduction costs (to essentially zero) AND made it MORE valuable to your customers. A great business lesson learned for you and it only cost you a (hopefully small) run of CD and vinyl.
I hope you consider it a very successful experiment - because it told you a lot about your target audience and gave you a way to decrease cost and increase price. Now you need to make sure you maximize your customer base without incurring more expense than the additional profit (i.e. how big of a run of vinyl you can sell out while making a profit) and you will find yourself building a larger fan base while increasing profit.
Best of luck.
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Nice.
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