GAMING BLEND

TellTale CEO Not Happy About Digital Price Cuts, Bundle Sales

By William Usher 2012-01-16 15:15:46 discussion comments
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Most companies are excited to find out that their game tops Steam's or some other digital distributor's charts. I mean, it means people are buying your games, right? Right. Well, TellTale doesn't agree that just because a game moves digital copies it's actually making money.

In an interview with GameIndustry, TellTale's CEO Dan Connors is a little peeved at how people relate sales volume with success when he feels the revenue should speak louder than the amount of people the game reaches...
"There'll be a giant sale on iOS where a major company may offer up its entire library for 99 and some of that includes $59.99 retail products at console. So someone just sold $600 million dollars worth of content for $7 million, and considers it a success...It's still early, and volume is king, you can just say volume in a lot of places and and daily average users, monthly average users, number of install, it's all very sexy, but the amount of dollars attached to the user, from a business standpoint, is where the rubber meets the road. "



TellTale is known for their episodic content with games like Jurassic Park, Monkey Island, Back to the Future and the Sam & Max games; giving gamers a little taste of the game for shareware prices and then trickling out additional content for budget prices.

However, I must strongly disagree with Connors' stance on revenue vs volume for a couple of reasons:
1.) You don't lose revenue selling digital games at a lower price for higher volume. You're increasing your potential reach especially to those who would probably just pirate the game if it were just out of budget.

2.) You don't lose revenue on digital games because they're digital. You lose revenue to operation costs on retail games that sell for under their appropriated value (read this article to get a breakdown of why.) You never run out of stock of a digital game so if it doesn't sell for $50 bucks for a week and instead sells for $2.50 there's no loss of revenue on packaging, shipping, manufacturing, etc. A company's digital copy is still there and can just as well sale for $50 a week later without the company incurring any kind of loss from the product's $2.50 price tag.

3.) The only reason volume would not be as important as revenue is for quarterly financial reports. While a game may move 10 million copies at a $1 that doesn't look as good on the quarterlies as compared to a game that moves 3 million copies at $30. Despite having a smaller reach and less people playing the game, the end results of high revenue looks good for padding the portfolio of a company.

Besides, will a week or two at a quarter of the original release price really hurt the overall sales performance of a game? I highly doubt it, because refer back to point number 2.

You can check out the full interview with TellTale's Dan Connors by visiting GameIndustry.
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