Free Markets or Fair Prices? Indie Game Pricing Debate Continues

75% off?! This is a daily occurrence on Steam.

Remember that South Park episode covering Wal-mart? Remember who they targeted as the real problem? Ah yes, it’s not me. It’s not the consumer. It was that darned mirror.

Whatever your stance on the political aspect of economics, there’s no question that the principles of laissez-faire capitalism apply most easily to entertainment-focused media: books, music, movies, and now video games. With the exception of the occasional ratings board or outright censorship, these products are traded freely, and at prices that work for the market.

And things have become even easier, on the supply side, with the advent of the Internet. In a supply and demand equation, the fact is that the supply of any given product is now limitless in a digital format. It’s difficult for me to hear a startup game developer complain about the lack of success they receive when, 15 years ago, the best they could’ve done was get a demo of their game on a crappy Shareware CD that gets circulated at the local Babbages.

Which is why I’d like to turn your attention to this blog post by Ido Yehieli at Dinofarm Games. In it, he argues that Steam sales and Humble Bundles are good for consumers and “the 1%” of game developers, but it leaves the rest of the game devs in a worse situation:

“There are thousands of indie games out there. The vast majority of these do not get into the Humble Bundles. Most of them do not get on Steam, either (Steam’s quality control is extremely uneven and inconsistent, and lets in plenty of shitty games as well as leaving out plenty of good games). Of those that do get on Steam, most never get into lucrative, high-visibility sales. Saying ‘just get on Steam/Humble Indie Bundle’ is about as helpful as suggesting that you should win the lottery. It’s not a valid business plan and no one (except maybe the people in Indie Game: The Movie) can guarantee your number will come up. And the race to the bottom means that if you don’t you will still have to sell your games for a penny on the dollar.”

Okay, there’s plenty to unpack here. One place where I must wholeheartedly agree with Yehieli: Steam is wildly inconsistent as a gatekeeper. And I think we can all guess why this is: it’s not what you know, it’s who you know. Once you’re networked in with the right people, you can get all your games on Steam, regardless of their quality. Other devs, regardless of how stable, interesting or critically acclaimed their game may be, can’t even get a response from Steam when submitting a product for listing. I understand the frustration and acknowledge the grievance. Of course, if my choice between gatekeepers were Steam or GameStop, I will always choose Steam.

As for the rest of the argument, I can’t bring myself to see it as anything more than a lament. Why should this situation be surprising? It’s the equilibrated state for the rest of digital media. This talk of a “race to the bottom” may be true in terms of prices (good news for all consumers), but not so for quality. The market for indie games is saturated, and at this point it will be little more than a hobby or failed busines venture for many new devs. What does that remind you of? Oh, right, it sounds like local bands, or indie filmmakers, or novice writers. This is the way of the world.

This isn’t to say I don’t sympathize. Hell, when I first went to college, I wanted to be a classical composer, but found myself drowning in a pool of peer talent that made me feel (rightly) like a D-grade pianist. I’ve had the occasional dream of being the next Jeff Gerstmann or Leigh Alexander, but let’s face it, even they are probably just getting by at “barely comfortable” as full-time writers and “game critic personalities,” and they’re the top 1% in that field. So for me, writing about games is a hobby. Meanwhile my full-time job, though not technically prostitution, makes me feel like I’m a living cell within the Whore of Babylon (I won’t disclose my employer’s name, but here’s a hint from Mr. Eisenhower).

Here is Ido’s concluding paragraph:

“Sadly there is not much any of us can do about it. Of course, there are also some positive long-term consequences to the current situation (a lot of people who never played indie games before now do), but as a whole it mostly means that the situation has become even more of a ‘winner takes it all.’ One thing you can do, is to head to places such as Indievania, Desura, Gameolith or even your favorite developers’ web site and buy some little-known indie games at a fair price.”

First, count me as part of the group that was brought into the fold with Humble Bundles. This isn’t something to be overlooked. Again, your supply is potentially infinite (with the only real costs being bandwidth and perhaps some continued user support); as the target market expands, more people have potential to win. To declare this situation ‘winner-take-all’ is largely myopic. The mere existence of an indie game scene, saturated or not, tells us that there is a healthy and diverse market here. Triple-A publishers still do their business and sell their console games for $60 a pop. Small-scale, one- or two-person dev studios can sell their games for $5-$10 via whatever marketing and distribution channels they get themselves on, and hope for the best. That’s a new thing, and it’s a great thing. Yes, maybe Jeff Rosen at Humble Indie Bundle is making out like a bandit, and maybe consumers are being spoiled (after all, it’s time more than money that precludes myself and many of my peers from trying more games). But Ido, I never would’ve heard of you or your game were it not for the advents of technology, and I sure as hell wouldn’t have cared if it hadn’t been for Steam Sales and Humble Indie Bundles. And as for services like Desura, I point you to my South Park link at the top. Should Steam ever die (perish the thought!), someone would out of necessity fill the gap, and it could very well be Desura (I’d count it an improvement if Desura remained DRM-free).

Finally, this language of “fair price” irks me. I can accept the term used in the case of “fair trade,” where an extra 10 cents makes for a more sustainable business model re: 3rd world country farmers trying to feed their families. But video games are a (low cost) luxury item. If your games aren’t selling, you have two options: keep making them out of a sense of duty to your own creative urges, or give up that dream and find a more profitable venture. Selling your game for $5 or less may become the new norm, and there’s nothing immoral about that; there’s no need to guilt gamers into paying more for similar products. Low price and “pay what you want” for digitally distributed indie games seems like a good deal to me, and a great way to boost your audience at that.

And for readers unfamiliar with Ido’s previous work, here’s a link to Cardinal Quest (selling for, yes, under $5), and he’s currently working with Dinofarm on a new roguelike game Auro: The Golden Prince. Hexagonal grid? You’ve sold me!

PS – To all readers who want to know about my own interest in economics, my training is entirely non-formal and comes primarily from reading books and listening to the econtalk.org weekly podcast. Host Russ Roberts does a great job and pulls no punches for his guests, regardless of whether their background is Keynesian, Austrian, Classical, or some other school of thought.

PPS – If Ido or anyone else at Dinofarm reads this and would like to respond in an interactive manner, consider this blog post an open invitation to be a guest on our Jurassic Hour podcast, where you can happily tear us a new one over Skype. Just leave a note in the comments and we’ll get in touch, or contact me via email: patricksgann ;at; gmail…