I had a candid talk with my students about game pricing this last week. Some of my reflection on this appears in my post on arcades from a few days ago, but let me review it.
Generally speaking, there are some truisms that apply to all pricing models these days. You can see many of them explained well here. There’s two three things in particular I want to focus on here, and the WWE’s wrestling streaming network hits on all of them:
- $9.99 is always better than $10. $14.99 is a golden number for many subscription services (as is $9.99). That penny, while practically insignificant (it isn’t if you have a million people paying for something, but still) is a huge operative in getting people to buy your product. WWE Network is $9.99 a month. This is presented as an incredible value vs. the $39.99 a month that you’d pay for a wrestling PPV. Which is true. But it’s not a fair value judgment for the majority, as most of the people who subscribe to the network wouldn’t be paying for now two PPV cards a month. Here’s a link to how the math breaks down, and I’m going to trust it instead of doing my own. On the surface, it doesn’t look like WWE ismaking quite as much, but they’re close. But not so fast, my friend. The WWE didn’t get all of the PPV buyrate. They had to split it with the PPV providers. They get all of the network revenue (but now have to pay for bandwidth– still, the difference is likely not nearly the split of the money).
- That gets us into item #2: the value proposition. The WWE network isn’t just PPVs. It’s also weekly 205 Live for cruiserweight action (which is big in my house) and NXT, the WWE’s developmental program (which is arguably better than the main product at times). It’s also a handful of original programming and a massive tape library on-demand. It’s all that stuff. Only the average viewer doesn’t dig that deep. Most people watch the PPVs, some watch NXT, and now that they’re pushing it better, 205 Live. The other original content on the WWE network doesn’t get much play, and while the tape catalog is significant, I know that I, as a subscriber since day one, haven’t ever watched an old card. And I’m a nostalgia guy. The thing is that you don’t have to USE it; knowing you have that value is a big selling point. It’s like Spotify. Some months, I don’t listen to much on Spotify that I don’t actually own on CD (nineties stuff, Run the Jewels). But there’s a ska-billion songs on Spotify that I COULD listen to, so my money is well spent. Plus my wife is the one who pays that one, so I’m just an added value added valuer.
- The last thing is time. There is some stuff at the first link above about marketing and time, but this is where game designers can learn, where Blizzard has really run with the ball. People value their time more than their money. So if you subscribe to something that can give you original content/full value, it feels like a better deal. Back when I was doing my WoW research, my $15 a month paid for about 100-150 hours of use a month. Likewise, there’s more WWE Network content than you could watch in a week, just like Netflix or the music on Spotify. These things can offer us seemingly “unlimited time” for a flat fee, and if the fee is low enough, it seems like an awesome idea.
And this is where it hooks you.
How many of you belong to or have belonged to a gym you never go to? Yeah, me too.
A game subscription can work the same way. There were times when I didn’t go into WoW enough to warrant having it installed, but I didn’t cancel my subscription. And you know why? Because in our minds, we play this little game of fuzzy math. Look at what I pointed out above. I once got tremendous value from WoW, relatively speaking. A DIME an hour for gaming is phenomenal pricing. If we consider Skyrim to be a 300 hour game (which is what some claim–it’s technically endless), that’s still 23 cents an hour if you bought it new.
And because $14.99 isn’t that much money to many of us vs. the value we believe we receive, we don’t cancel our subscriptions. We don’t let that end.
Just like we don’t cancel our WWE Network subscriptions even though now the cable shows are written better and are designed to sell the network.
And why I keep using Spotify instead of taking my CDs to the car.
Marketing 101.