Why are cosmetics SO expensive?

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Gosukusan a écrit :

I can't say I'm surprised that most people responded to the thread title instead of the content and points made in the actual post, but I didn't really come here to debate. My main point is that there are MANY examples of proven, incredibly profitable methods of MTX out there, and GGG's system doesn't come close to matching them. It doesn't matter if they're making money; that is NOT the measure of whether a MTX system is successful or not. The success of a MTX system is measured by the participation rate of your entire consumer base.

Obviously, if you make a great game, some people are going to buy your outrageously-priced items, and I'm not suggesting that it's wrong to have certain items be on the much more expensive side. In fact, very expensive items are supposed to serve as a top-tier indicator, and are supposed to better illustrate the fantastic value of the majority of the product line. "Wow, that item is super expensive, maybe I'll get it one day. In the meantime, look at the awesome value of this other thing". That's an important component in any store.

However, if your MTX barrier to entry is so great that MOST consumers aren't regularly using it, then there is a problem. PoE has an ENORMOUS playerbase. Do any of you realize how much money GGG would be making if their MTX store was actually appealing enough to most of those players as to regularly encourage them to use it? It's just like I said, I've spent HUNDREDS of dollars in other games(not including subscriptions) simply because the developers kept thrusting all this terrific value in front of me. I was continually forced to say to myself, "well damn, at that price, how could I NOT buy it?". THAT is the question you want your consumers asking. You do not want them wondering if they can afford to buy something.

For all of you who actually think GGG's business model is solid, just take a look at the participation rates and profits of other successful models. GGG's prices are literally the most outrageous that I've EVER come across. The fact that I'm sitting here trying, yet utterly failing to justify ANY purchase is not a good thing, especially considering the fact that I regularly participate in MTX in practically every other game I've ever played and enjoyed.

FWIW I totally agree with you, despite recently spending nearly $100 on stash tabs. I would love to buy a visual upgrade but am not going to pay $30-$100 for a cool looking armor. I even got 3 separate mystery cubes and got complete garbage (hideout stuff)... so now I'm turned off that too. I don't want to play Barbie's Dream house... I wanted to look cool!

Expensive AND ugly. I myself prefer to use skin transfers. MTX usually look extremely invasive and often ugly to the boot, they feel out of place.

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Gosukusan a écrit :

I can't say I'm surprised that most people responded to the thread title instead of the content and points made in the actual post, but I didn't really come here to debate. My main point is that there are MANY examples of proven, incredibly profitable methods of MTX out there, and GGG's system doesn't come close to matching them. It doesn't matter if they're making money; that is NOT the measure of whether a MTX system is successful or not. The success of a MTX system is measured by the participation rate of your entire consumer base.

Obviously, if you make a great game, some people are going to buy your outrageously-priced items, and I'm not suggesting that it's wrong to have certain items be on the much more expensive side. In fact, very expensive items are supposed to serve as a top-tier indicator, and are supposed to better illustrate the fantastic value of the majority of the product line. "Wow, that item is super expensive, maybe I'll get it one day. In the meantime, look at the awesome value of this other thing". That's an important component in any store.

However, if your MTX barrier to entry is so great that MOST consumers aren't regularly using it, then there is a problem. PoE has an ENORMOUS playerbase. Do any of you realize how much money GGG would be making if their MTX store was actually appealing enough to most of those players as to regularly encourage them to use it? It's just like I said, I've spent HUNDREDS of dollars in other games(not including subscriptions) simply because the developers kept thrusting all this terrific value in front of me. I was continually forced to say to myself, "well damn, at that price, how could I NOT buy it?". THAT is the question you want your consumers asking. You do not want them wondering if they can afford to buy something.

For all of you who actually think GGG's business model is solid, just take a look at the participation rates and profits of other successful models. GGG's prices are literally the most outrageous that I've EVER come across. The fact that I'm sitting here trying, yet utterly failing to justify ANY purchase is not a good thing, especially considering the fact that I regularly participate in MTX in practically every other game I've ever played and enjoyed.

You're simply wrong. Most F2P games have similar prices, even mobile games as I mentioned. Participation rate doesn't make you money, whales make you money. That's how F2P works. It's way easier to find one player who spends $100 than to find ten players who each spend $10. No matter how low prices are, most players stay freeloaders. That's why GGG's model is dominant in the F2P scene.

As usual people descend right into whitenknighting, missing the crux of the issue.

What was interesting here was:

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I'm very involved with the video game industry, a business major and an entrepreneur with several startups.

Although I have my issues with the game, only one of them is so glaring that I felt the need to speak up about it: the "micro"transactions. Perhaps I'm missing something, but what on Earth inspired GGG to provide such grossly-overpriced cosmetics? Surely somconeone on that team has studied the most successful microtransaction business models?

I don't want to go into a long explanation but, as a provider of products and services, your goal is to offer said products or services at a price point in which a significant portion of the consumer base would feel foolish NOT to purchase. In other words, the value is supposed to intuitively feel too good to pass up. This is a well-established model among the most successful companies who profit in this way. A microtransaction-type product should never have an investment-like price point. That is just absurd."

Claims have been made, claims that deserve to be investigated and supporting evidence + longer explantion is the only thing that is relevant here.

For those who think mtx are not expensive - consider that just one armour set is almost the price of buying a whole game.

It is possible that the GGG model is still most effective at earning the most, but its also going to drive people away due prices of packs and other effects that means you won't be having the cool things in game or a way to obtain it.

GGG's MTX model is interesting. I'll wager they don't make a huge amount of money off their visual MTX's (stash tabs are, as was mentioned, a different story). A lot of those MTX items, especially the expensive ones, aren't there to entice people to buy points. The enticements to buy points are found in the supporter packs, and those supporter packs come with points you can in turn spend on the other stuff. It's more of a 'rewards store' for people who already paid (and have all the tabs they need) than it is a siren singing a song for your cash.

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Gosukusan a écrit :

My main point is that there are MANY examples of proven, incredibly profitable methods of MTX out there, and GGG's system doesn't come close to matching them

One more time : you do not actually know that.
GGG's audience is different from most "main-stream games", they have obviously been studing their "target" and what they want to sell and how they want to do it, and you like it or not : it is working.

They know how well it's working out or not, and you don't.

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鬼殺し a écrit :

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Gosukusan a écrit :

I can't say I'm surprised that most people responded to the thread title instead of the content and points made in the actual post, but I didn't really come here to debate.

And yeah, you did. Don't kid yourself. ^_^ It's okay. Debate can be healthy if we do it like growed-ups. It can be educating.

I promise you I didn't. My goal was to state my points, then improve and expand upon the clarity by using a few responses in an effort to better achieve that goal. Of course debate can be healthy, I just don't have the time or interest to debate this topic after this post. The evidence is out there and people can research it for themselves. I made an assertion that I believe because of the massive amount of evidence that supports it. Don't take my word for it, throw any biases and cognitive dissonance aside and go do the real, in-depth research. I'm not here to convince anyone of anything with a few posts; going back and forth in what would inevitably be an endless discussion.

I don't plan to return to the thread after this post, I just wish to encourage people to understand the case I present by doing REAL investigation of the claims. That's it. If you give it a real effort and still disagree, then present your case for others to discuss.

I haven't seen that done yet and I don't expect to. Most people's standards for truth are low enough so as to only rely on the most immediate information that satisfies said standard. I happen to believe that it takes a lot of time and effort to discover actual truth. Check out the sales figures of MTX's in the most comparable games, then check out the figures of games that aren't immediately comparable, but share similarities in their playerbase, player retention rate/playtime and MTX infrastructure. Research F2P consumer habits and average expenditures(if you think that most money is made from big spenders/purchases than you're grossly mistaken). Investigate the MTX industry growth over the last 5 or so years and look closely at the consumer patterns and MTX models that dominate the market. Look at the evolution of MTX systems in general. Do some research on price elasticity and price elasticity of demand. Observe the trends in sales and entrepreneurial communities. Hell, just read some of the discussions about conveying product value to consumers.

It might sound like a lot, but a lot of it is very basic stuff. GGG's system is just overwhelmingly intimidating where sales potential is concerned. It's not just the price structure either, the whole shop is poorly-designed and guilty of a serious lack of functionality and transparency. I mean come on, even the basic point purchase system is devoid of scaling value. $5 for 50 points, $20 for 200 points. This is a BASIC economic misstep or oversight... If you want to cater to big spenders, then the LEAST you can do is clearly outline the increased value for spending big on base currency purchases(e.g. $5 for 50 points, $20 for 260 points). It's a basic and intuitive presentation of value, and it's a better foundation than "bundles/packs" because the value of those items isn't static. This shop is almost entirely devoid of any kind of actual streamlined or easily-digestible value.

It seems quite obvious to me that I am not alone when I say(once again) that I would love to spend money on this game, but I just cannot reconcile the prices of the products with the value I would gain by making those purchases. If you want to maximize your profits then you need to align that value with your price structure. Since that value is not static, then you must determine its optimal position among the consumer base via success modeling and price elasticity/demand experimentation.

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Gosukusan a écrit :

However, if your MTX barrier to entry is so great that MOST consumers aren't regularly using it, then there is a problem.

if you had a company with inhouse support that already struggles handling the existing customer base accounting and daily problems, outsourcing it to india is out of the question, would you rather have a large fluctuating community which pays less on average or a small but steady community which pays more?

when it comes to your company's costs regarding accounting and support and credit card fees, do you think that getting 1 mil $ from one person nets you the same revenue as getting one dollar from a million players?

after you finally got that having a small and well paying fan base is the optimum, do you think that them reaching their mtx saturation point after spending 10 to 20$ a month pretty fast is a good idea?

The prices are insane now, no thanks to increased dollar value. What used to cost 250HRK is now 350HRK. That's a 40% increase of mtx prices in last 2 years.

I used to buy packs for 40-50$ but that's just really too expensive now.

Maybe millionare charan can afford it and defend ggg, but for me, price barrier of mtx's is keeping me from buying any new ones.

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Odoakar a écrit :

TI used to buy packs for 40-50$ but that's just really too expensive now.

And yet the cheapest supporter pack this league costs ... 30$, the cheapest I've ever seen ( not that I am checking all the time though )