How to Price Your Indie Game (And Not Regret It Later) transcript

You like to make money because otherwise you wouldn't probably be watching this video. You've been spending a bunch of time working on the game. You've put blood, sweat, and tears into it. And now it comes that point where you're gearing up for release and you need to put a price on your game, but you're not really sure how much you should charge because you want to make sure that enough people can buy the game, but you also don't want to feel like, hey, if I sell this game for $1, then I'm basically going to get peanuts for all of my hundreds of hours of work.

This is a question that I deal with sometimes as well. But I think pricing wise, there are a few three main core anchors basically that can determine your indie games price. And I think outside of that, there are a few core rules. I think the core first rule that I want to say is that it's going to be a number between $5 and $20 for your game. If you are an average indie developer, that is going to be the point. Don't go lower than $5 and don't go higher than $20 is the general advice I would say.

Now, let's dive a bit deeper into how do we come to these numbers. Like I said, there are three main points that will determine how expensive your game can be. The first one is simply replayability. If you're making a game that is a one-time very shortrun game, like for example, a Kyoto Anomaly, which is a game that we released, or an overtime anomaly, where you can realistically finish the game in like less than 2 hours, maybe 3 hours at most, it's going to be very hard for people to spend $15 on that game.

I'm not saying that nobody will buy it, but you are going to need to keep this thing in mind. If you look at a pure value of dollars spent per hour of gameplay, gamers can be extremely spoiled and extremely extremely like, how do I call this? Demanding in a very nice word. I think if you're making a game that is under 2 hours long, going for over like 56 $6 can get harder. Especially like 2hour games over $10 is a really really tough sell.

Unless you have an exceptional reason as to why it's going to be that expensive. Like it's a triple indie narrative game with like beautiful gorgeous graphics and whatever, but even then you will get this point in like reviews and stuff like oh it's kind of overpriced. The longer your gameplay is generally the more you can ask for a game to begin with in general like an 8 hour game. Yeah, you can probably get away with $15 pretty easily with that.

But I do want to say here as well, caveat-wise, do not look just that, okay, so I want my game to be $15, so I should get eight hours of gameplay, right, Marx? No, that's not what it boils down to. But I just think that if you're making extremely short games, there is always going to be a hard cap to how much money you can charge for a 2-hour experience or a 4-hour experience or an however many hour experience. Once you go over like 10 hours of play time, do whatever you want.

I think that point you can charge 20 bucks for it, you can charge five bucks for it, but especially on the lower end of play time, pricing is going to be an impact. The second big thing that's going to impact the game is, okay, what is the genre and what is the production value? I'm going to say for this one, genre is kind of an easy one. I said that, you know, you don't go under $5 and you don't want to go over $20, for example.

This is one thing where genre maybe comes out and these things come together with playtime as well. The only indie games generally that do perform well going over the $20 mark is games like RTS's, Forex games, those very, very deep strategy games or automation games where you can put a lot of hours into it and it has a more rich audience. I don't know how to call it. You see this with a lot of those grand strategy games basically.

For us, even if you have a 2D platformer with a 100 hours of content somehow, getting that over the $20 range is going to be a way harder story, unless you have those absolutely breathtaking visuals and narrative and whatever, it's just not going to be something that the general person will be interested in. I think one of my favorite examples of this, of like how pricing can basically immediately like punch a game right in the nutsack when the game comes out is a game like Skim.

CM was a game that had a brilliant marketing strategy. It got like over 200,000 wish lists before launch and is sitting I think right now at like 70 or 80 reviews and has not gotten basically any conversion based on how many wish list it had to how many people bought it. The reason for that, it's a pretty cute and short game with not all the crazy amount of mechanics and all of that and it looks really good marketing wise, but it's priced at $25 where once again going back, Steam people are extremely extremely demanding.

That's just not going to fly. That game could have probably performed a lot better at like $10 or whatever, but that's also something that's going to happen with publishers. Like for example, Skim was working with PlaySm. half usually depending on the contract but generally this is the case quite a bit of say over what is the price going to be for the game and yeah if you then realize that okay we put so much money into the game and this is what the big corpo xx then say we put so much investment into the game we can expect this many sales so we're going to make $10 billion so we're going to price at a $25 sale price you're going to like I said fall flat upon release I think going for these higher price games only if you're making those games where there is hundreds of hours of content in a genre that generally game prices start like a cheap game is $20 like an RTS, like a grand strategy or whatever.

Okay, you can do it. And the last third thing basically is okay, how much money do you as a developer want to make from your game? This is something you need to keep in mind as well. Is this a hobby project or is this more of a professional project where hey, you actually have five people working for you and you need to pay their salaries and whatever. These are things that are going to impact your pricing strategy as well.

If you do make these games kind of just for the love of the game and as a hobby, yeah, you can be more easily leaning into the lower $5 range, for example, and probably still get a pretty nice amount of money from it, assuming that your game gets some decent amount of reach, but it's probably not going to be enough to completely fund the next game and do a publisher recoup and all of these other things. Now, this also kind of ties into the problem of Steam generally has had price stagnation.

We don't have inflation on Steam. Basically, we have the opposite thing where, like I said, people expect more and more game for way way less price. And then that is something that we professional game developers who do want to pay ourselves wise and all that need to consider as well. You're going to be competing with people who will make games completely for free, who are going to be making games that are going to probably be better than yours game and be released for free.

And that is an unfortunate truth that you're just going to have to deal with at some point. don't go into a full race to the bottom, but you're going to need to find that balance somewhere. And I think for most games, I'm going to narrow it down a little bit more. That balance is going to be like the $10, $15 range ideally, if you're really not certain how much should I charge for my game. We have been charging pretty low prices for our games.

Overall, Unicycle Pizza Time was priced at $5. Overtime anomaly was priced at $6. And then Kyoto Anomaly was priced at $4. Another game kind of thing we made, My Virtual Friend, is also priced at $4. We only have one expensive game right now, our automation game, Forge Industry, which was priced at $17 when it originally released. By now, we have reduced the price to a permanent $10 instead. There is a problem with that.

And this is also why I am kind of coming back on my own idea of, oh, go for these shorter scoped, lowpriced games like a Unicycle, Pizza Time, whatever, because the amount of copies that you need to sell is kind of bonkers in comparison to how much money you're going to be making. I was doing this exercise earlier of like Kyoto Anomaly and My Virtual Friend. Both of these games are priced at $4, the same price as an Exit 8, for example.

The take-home pay that we get because it's remember this is $4 is what the customer pays. The take-home pay that we get on average for every game sale, like that goes to our bank account, is about 50% of that, $2. If I sell a,000 copies, which is a high number, a,000 people is a lot honestly to convince, you're going to get $2,000 in your bank account. Is that really enough to justify a year of development or however long you spent on it?

Probably not. How do I come to 50%, because you may be thinking, "Oh, but Steam only takes 30%, right? How is Gabe Newell going to fund his sheep farm otherwise, right?" The catch is that there's more impacts. You also have to keep in mind taxes. VAT is also something that you're not going to get paid out to you. So even if the game is four bucks and then VAT is like depending on where you live, 10 sometimes 20% in Europe, then also the 30% cut.

But wait, there's more. There's localized pricing. You are going to be selling your game for probably $4 in the US, let's say. But in China, you maybe only want to sell it for $181, for example, which is about $220 because there is less purchasing power. Regionalized pricing is a really good thing to get more people to buy your game. But that also means that the on average earnings for your game is going to be a lot lower.

Now, I quickly want to interrupt this video because some big stuff has gone down since I originally recorded the rest of this video, mainly in regards to the platform cuts. I've just covered the 30% for Steam, but this is something that you also see on mobile with, for example, the iOS App Store or the Google Play Store and things like that. They all take a 30% cut on all payments going through that store. And here, some big things have changed. mainly on April 30th, the US District Court in the Apple versus Epic case ruled that Apple has to allow developers to support off-platform payment links basically.

So they can't be forcing developers anymore to utilize the Apple payment toolkit basically. So this allows you to get rid of that 30% cut that you have to give to Apple specifically for purchases made in the US, which is great because 30% is a very big chunk of your revenue. But you may be wondering like, okay, but how do I roll my own payment? How do I actually deal with this? How do I do my own payment providers? And this is where this video sponsor Exola comes in because they have some really cool solutions just the Exola web shop and the Exola buy button which allows you to set up your own web shop to sell your inapp purchases directly without the 30% fee.

It's been purpose-built basically for this change where platforms are becoming a bit less monopolistic and you have more freedom as a developer to choose for which platform you want to go for. It's currently used by a lot of massive studios already. And all of that while still remaining approachable for indies like you and I. So, we can also do this because the best part of this is that instead of 30%, they only take a 5% cut, which is a very big difference.

If you suddenly got 25% more revenue for your game. Well, that's a very big difference that you're getting. So, that's why I think this can be a really cool solution if you're developing mobile games. But now, you may be wondering, okay, but how do I set this up? Well, the good news is it's very easy to set all this up. It's a no code drag and drop builder basically. So you can get started very quickly. And on top of that, they even offer some extra marketing tools such as for example personalized promotions or general offers as well.

So you can drive up more revenue, you pay less, and you maybe even get more from your games, which is also a big win. It integrates with all the major distribution platforms. So, if you are a mobile game developer or mobile games publisher and you are looking for ways to increase the revenue you're going to get from your games, I definitely suggest you to check out the Exola web shop in the link down below. It's a really solid tool at the end of the day to improve your sales.

So, if that's something you're interested in, then head down below because there's a link right there that will help you set up your own web shop very easily. Once again, thank you for Exola for sponsoring this video. And let's go and talk a bit more about pricing your game now. And it's not just all boohhoohoo. not going to be able to afford my Lamborghini by going for these lower priced games like the sub $5 range.

I would say it's also that certain marketing vessels become unavailable for you. And what do I mean by this? It's mainly going to be advertising. You go for advertisements on things like XD everything app or on Reddit or on Facebook or whatever or Google ads and you make like your art of like this is my game, go and buy it, go and wish list it. And there are some numbers that are like kind of overall standard in terms of games where an ad is about $1 per wish list.

Like the amount of impressions that you give to a viewer and then the click-through rate and everything basically at the end of the day boils down to $1 per wish list. Then the range from going from a wish list to a sale is between I would say it costs between 7 and $10. It's around 10% on average, but it depends on so many other things. But let's go with $10 here. you're going to spend $10 on advertising to get one person to buy your game.

Well, if your game only costs $5 before any cuts and whatever, you're going to be burning money to pay people to buy your game basically. Whereas, if you're looking at those more expensive genres like automation games, this is why you see this with city builders and things like that as well. They do this advertising a lot because they are basically printing money to a certain degree. If they can guarantee that for $10 of advertising cost they can get one sale, which is pretty normal, and their game costs $20, well, they do now basically have a way to print free money, even though, yeah, it's just a few dollars bonus per game, but it is going to be more game sales and going to be making profit from it.

That is just not possible with these lower priced games. To give you some more ideas, our most successful game, Unicycle Pizza Time, priced at $5, has sold over 7,000 copies at this point and is at like 25K total revenue. Try to imagine 7,000 people paying for your game. That is not an easy feat. That is not, unfortunately, I hate to break it to you, that's probably not going to be how many sales you're going to get, even though you wish you had.

It's not what we've been able to get nearly on any of our other games. And even then, with 7,000 sales, you just don't get that much money anymore for you to keep as the developer yourself. And a final thing about pricing too low and how much you should price your game as well is that the price that you're going to be selling your game for only really matters for the first few months. So, let's say you're making a simulator game or whatever, and you're going to price it at $15.

It's going to cost $15 upon release, but not really cuz you're going to immediately start with a launch discount of like 10 20% even maybe for one or two weeks where you're going to get a very high amount of sales. So immediately you're not going to be actually selling the game for $15. It's just going to be the base price you start discounting from. And then you're going to have between four and 6 weeks generally of where the game is going to be full priced, where people will actually buy the game at the full price of $15.

And then, uh-oh, the Steam summer sale is coming or whatever other sale is coming, you're probably going to want to discount your game again. This is a pro tip that I have for you. You do not ever want to discount your game for less than 20%. Why? If you discount your game for less than 20%, Steam will not send out notification emails to all of the people who have your game on wish list still. So nobody will basically know that your game is going to be on sale if you discount for only 15%.

For example, you want to do those sales for 20%. So once again, your game is now selling at $12. And the further you go, basically once a game has gone on discount once, that basically becomes the new price. I think Steam has trained its users extremely well to look at things like, you know, Steam DB, what was the lowest price before? Uh, it was 30% off in the last sale. Well, the next sale is coming in a few weeks. It's probably going to be 30% off again.

So, this is another benefit of like pricing your game higher. And this is what we saw with Forge Industry, for example. We didn't get a super high conversion rate when the game originally released, but then once you consider that we hit that first sale and I think then we discounted at 20 or 25%. There was such a high conversion because a lot of people just by principle will not buy a game at full price because on Steam there will be so many discounts and we've actually gotten pretty good conversion later on then with those discounts.

Now, if you're once again taking a $5 game and discounting it by 20%, 30%, 50% sometimes, well, you're getting basically nothing anymore sent to your own bank account at that point. So, then it's better to just go a little bit more expensive than you think it's going to cost and then just discount a little bit more. Do every discount you can get. Discounting is for indies something good. Yes, I know there are games like Factorio that have never gone on discount, but be honest.

Is your game a Factorio with that same kind of following? No, you're not that special. Participate in the Steam meta discount as often as you can, always over 20%, keep that discounted price also in mind when you're coming up with that original price. It can be extremely tempting once you release that first game and not as many people buy it as you expect to go into panic mode and immediately schedule a 50% discount.

Once again, this is something that we thought about when we released Forge Industry. Don't do that. It's just a waiting game at that point. You do slow discounts and at some point people will buy it. Whether that is at 20% or at 50% or at 75% in 2 years, at some point the conversion will be there. You just have to be patient, basically. So, I hope that was interesting. If you have any other questions about pricing or whatever, leave it in the comments down below.

Or if you were one of those people who priced the game at 99, let me know. How much did you actually make from your games? And was it more than $50? I'm just interested in it, honestly. And sharing your experiences will also help other developers read in the comments. So, thank you very much for watching. If you're new here, we upload these videos every week where we just talk about the hard fought lessons we've learned making games and selling them on Steam.

So, if that's something you're interested in, be sure to head down below and subscribe. Thank you very much for watching and we'll see you guys in the next one. Bye.