Digital Indie Game Prices – What Should You Charge For Your Game? Here’s A Mathematical Formula.

I’m now on the verge of releasing my second indie game, “Unfinished – An Artist’s Lament” on Steam. For both this and my previous game, I questioned myself about what to charge for it. What price should it be set at? What general rules should indie developers use? No one knows, but here’s an informative opinion that may or may not be completely wrong.

Digital distribution has changed the game marketplace forever. Yes, I prefer physical because reliable Internet is still difficult to find (I’ve been at five hotels in major cities across Ontario this summer, all with free high-speed wifi, only two of which actually had Internet functional enough for me to check my email). Now you can buy games and download them within hours without leaving your home. Now publishers don’t have to worry about printing costs, or estimating demand before release.

That’s why I hate AAA developers charging full price on their digital games to match physical prices. Yes, I understand development is getting more expensive and companies don’t want to de-value their products any further, but buying a digital copy always feels less than buying a physical one, shouldn’t it cost less too? I haven’t seen a digital movie cost a retail price of $29.99 USD. And even though games go on sale on Steam at steep discounts, you can find similar discounts at your local electronics store, usually lasting much longer while a Steam sale might last a week. These high prices are probably the sole reason why physical copies are still made at full capacity, and I strongly believe that digital games should cost $29.99 at max, or roughly half what their physical copy would be.

More an issue, what should indie developers charge? Most of us don’t have physical copies to compare with.

Recent articles have quoted another indie developer’s neogaf rant, asking that indie developers charge less, since most are charging too much. He argues that over $20, most gamers won’t consider buying it unless they are really excited for it, loosing profit from impulse buyers. He has some points and you should take a read. There are also many other articles you can read with a quick search on Google, but thank you for considering mine.

Generally, I think there are 3 main things to consider when pricing your game: 1) how much did it cost? 2) how much is it worth to you? and 3) how much is it worth to the gamer? What’s a gamer’s thought on price after a first impression?

Game development is one of the most and least expensive things in the entertainment industry. Indie developers are fully aware they could make a game by themselves for free if they had to. High-quality tools, engines and software are now free, or else very cheap compared to a decade ago. They could also hire friends for free, which is usually certain to end in tears. More often developers would like to hire and pay appropriate compensation, which is always my rule of thumb. This is also subject to whatever available funding you have, either from other sources or your own pocket (I would love to hire full-time competitive salaries, but that ain’t happening any time soon). Don’t forget to pay yourself: you can either take all the risk to reap all the reward, or treat yourself the same as whomever you’ve hired and pay yourself a share similar to them.

Generally, I would never spend more than a couple thousand to make a game (unless I was certain it would be the best game ever and worth any price). I also don’t like to spend more than a few months of hard development on a single project if I can help it. That’s significant enough to be a factor, since I would like to make my money back, but not enough to justify a price point above $10. I’ve seen other serious indies spend years on their projects, some quoting to spend hundreds of thousands of investment money into their first project. With them, I’d understand wanting to charge over $20. Months after release, if you’ve made your money back, you may want to drop the price to something more palatable.

It’s hard to say how much a game is worth to you, after spending so much time on it. My first released game, “Drew and the Floating Labyrinth”, was the first game I’d completed that impressed me. It was something I would personally pay $20 or $30 just to exist, bugs and all. This is a huge bias, since I chose the art style, I chose the game genre. It makes sense that I would like it more than most people.

From what I’ve heard, most developers use this factor as their biggest influence, when it should be their least. Unless you can put it side by side against a AAA game on a store shelf and not know which is better, you shouldn’t be charging a high price for it. Or rather, if other people can’t tell which is better, that says a lot more. Your personal opinion should only help decide what is the cheapest amount you would be willing to charge. Basically, whether or not you think the game should be free.

It’s hard to know what other gamers would be willing to pay for your game. After going to numerous conventions, I’ve gotten reactions from people, but most of them are very kind. I have good friends, since most of them are more honest. The Internet community can also say a lot, although most people would just want a better game rather than a cheaper one, whether or not you are capable on your own to make the game any better than it is.

If on your own, ask the basic questions. How fun is my game? Does it impress me visually? Does the music or sfx impress me? Is there a story worth following? How long is it? Does it look like a mobile game, a PC game, or a console game? If I saw it on sale today, what price would I not hesitate to buy it at? Charging $20 for a 2-hour game doesn’t make sense, with some exceptions. Remember that most gamers will also wait for sales and prices drops, so charging a tiny bit more than what the average person would want is probably safe. I consider myself good at looking at my own projects objectively, seeing the good and all the bad, but a second opinion couldn’t hurt.

You could also compare your game to others, but I don’t think it works. There are too many games now with varying prices. Good games range everywhere from $5 to $25. I’ve seen games that look like mobile ports or free-5-mimute-flash games charge over $15. It’s hard to get data on how these games perform, so I tend to ignore most of their prices.

Overall, I don’t think games should be free if it cost any money to make. I don’t think any indie game should be outside $5-15, any cheaper would be self-deprecating and any more would be too much. If you had to make a mathematical function to tell you exactly what to charge, I might use something like this:

P = AVERAGE(P1, P2, P3)
where P1 = (SQRT(SQRT(development cost))
where P2 = ((minimum possible personal worth price * 9) + (maximum possible personal worth price)) / 10
where P3 = gamer’s worth first impression price

And yes, of course I made this up. But with it, the suggested cost of my games “Drew” should be about $5.87, the cost of “Unfinished” should be about $4.21. As of now, I’m giving a permanent price drop to “Drew” of $4.99 instead of $7.99 since I’ve made back the money I’ve spent, and “Unfinished” will also be set to $4.99. If a game isn’t worth five dollars, then it just isn’t worth your time.


(Update on August 10, 2015: I posted this on Reddit, and while some enjoyed this article, many panned it and called it idiotic, saying the only thing that should decide cost is P3, the gamer’s value, according to business and economics 101. Now that this audience has subsided a bit and the chances of an argument frenzy lessened, I’ll explain why I think this is wrong. While it makes sense that you should simply charge what a gamer thinks the game is worth paying for to get the most profit, there are countless examples in physical and digital goods that show this isn’t common. The price of gas has little to do with what you are willing to pay. The price of cars has little to do with what you are willing to pay. Recently, special and collector’s editions of movies and shows target what a very tiny group of people are willing to pay, ignoring the rest. The price of movies have been standardized, regardless of how good the movie is, a sign that it is considered standard for a person to pay $20 for a film on DVD for any movie, no matter how good or bad they think it is, such a standard price does not exist for indie games (incidentally, the retail price changes for home video changes throughout time, but the accepted sale price is largely the same). The price of software continues to be high for certain brands, and some powerful tech such as Unreal Engine decided to go completely free just to compete with what they think modern people would pay, since most people just don’t pay for software like they should, and likely aren’t seeing the return they are hoping for. The biggest problem with P3 is finding that value, which can vary wildly and the maximum profit point impossible to calculate without perfect data. Here, P3 is purely a wild guess and estimate, kept separate from P2 to make you realize that people may have different opinions than you, and meant to tweak your price slightly. Based on that, while P3 might seem the most important value, it is the first you should ignore in this formula if you wanted to take this made-up calculation seriously, and I stand by using P1 and P2 in your considerations. Anyone else who thinks otherwise, please leave a valid excuse before commenting.)