Pay What You Want and the Four Currencies

Cross-posted on gamasutra

Today I'd like to apply my "four currencies" model to the "pay what you want" phenomenon.  Like piracy, this is a case where the results we observe don't match what conventional wisdom says should happen, and I use my "four currencies" theory to explain the discrepancy. 

A quick summary for new readers:

In my first two articles, I explain that while piracy costs no "money-dollars" ($M), it still has "time-dollar" ($T) and "pain-in-the-butt-dollar" $P costs, ie, the time and hassle of tracking down a torrent, as well as the risk of malware, especially for non-techies.  There's also an "integrity-dollar" $I cost, ie, piracy makes some people feel guilty, and adds a small risk of legal trouble.  So, although piracy costs zero $M, it has non-zero $T, $P, and $I costs.

Raising large hurdles lowers sales

Image courtesy of haven't the slightest    

The legitimate product has no $I cost, and with a quick and friendly purchasing experience, it will also be "cheaper" than piracy in terms of $T and $P, making the customer more willing to spend $M. On the other hand, DRM and treating players like criminals raises both $T and $P, and makes players feel less guilty about piracy, lowering its $I cost.

This is a super quick and over-simplified summary. See the original articles for more details.  

The Pay-What-You-Want Paradox 

Conventional wisdom suggests that customers who are free to pay what they want for something will pay as little as possible.  This was widely repeated before RadioHead released their In Rainbows album as PWYW, and again when the first Humble Indie Bundle was announced.  In both cases, the conventional wisdom was partly right - lots of people did pay only the minimum amount.  But many paid more, and by any measure both sales were big successes.

Before we get into that though, let's look at a model where the conventional nay-saying wisdom matches reality - voluntary donations for software downloads.

Donationware Doesn't Work

image courtesy of MindfulOne

Donation-supported software rarely works.  There's a few outliers but for the most part it's a terrible way to fund a project - but why?  Let's apply the 4-currencies model.

When a developer offers a free download link on her website with an optional donation button, she is legitimately offering the game for two different minimum "prices":

The 4-currency "costs" are always relative to each individual.
This is just a theoretical "average person" example. 

The $M price of donation is as low as possible - any positive value will do, so why don't most people donate even 1 cent?  Because they can already download the product quickly ($T) and painlessly ($P) for free ($M).  Since the developer herself provides the free option, most people don't even feel guilty ($I) about it.

Pulling out a credit card, typing a number into a paypal window, etc, is too much bother ($P+$T),  especially when the developer provides a legitimate option to skip all that.

Raising NO hurdle lowers sales

Image courtesy jim.rocco

Now, what if there was a minimum price?  Let's go with 1 cent.  Let's temporarily ignore the fact that transaction fees for such small amounts would actually cost the developer money.  With a 1 cent minimum, the two "prices" now look like this:

By removing the "don't pay" option, all we have left is paying any amount, or piracy.  Piracy costs no money, but takes time, is a pain, and makes many people feel guilty. The only low $I cost option left is buying legitimately.  If the developer makes the experience quick and painless, she lowers the $P and $T costs sufficiently that many would-be pirates become customers instead*.

*Some will always pirate, because their personal valuations of the $P/$T/$I costs are different from those shown above.  These players will likely never be customers, so there's no point in worrying about them. 

Raising a tiny hurdle raises sales

Image courtesy of sombraala

Since there's no option to download both legitimately and for free, the small $P and $T cost of pay-what-you-want won't seem too bad for most people, especially if the payment page is slick, professional, and user-friendly.  Once these customers are over this initial barrier, purse strings will open, because the real obstacle was $P and $T, not $M*.

*For some people, such as those who don't have credit cards, or who live in countries not serviced by the payment processor, any amount of $M results in an insurmountable $P barrier, because there's no way for them to send the developer money.

There are some for whom money will still be an obstacle - this is the group that's paying only $0.01 or $1.  For those with a little more to spare, however, the results speak for themselves - people are more than willing to part with their $M, giving $5, $10, $100, or even $1000+.

Making it work for you

All this is simply to show how - and more importantly, why - the Pay What You Want model can work.  This doesn't mean it works in all cases.

The most successful variants of this strategy exhibit the following features:

1. Limited time
2. Product of significant value
3. Generates goodwill

The limited time is important, because it serves as a call to action - get it now while the price is incredibly low.

I have to admit that although I bought the first few Humble Bundles, I haven't bought some of the latest ones.  This is mostly because I simply don't have the time to play all those games, and I have pretty particular interests so what's on offer isn't always interesting to me.

I did, however, pay $10 for both Proun and Sleep is Death as PWYW because they caught my interest and were well worth the amount I paid.

The last point is the one I want to explore a little before signing off.  I believe people are more likely to behave cynically - that is, to pay the minimum amount, the more impersonal and detached their relationship is with the creator.  The more they see the creator as a real person with real needs, and the more they develop a personal connection with your work, the more likely they are to reward you with more than the minimum amount. This is why building a community around your game is very important, and why it's also important not to be a huge jerk, because it makes it easier for people to justify pirating your games.

The Humble Indie Bundle generated goodwill through its charity drive, by offering cross-platform versions of the games on sale, and through the sheer novelty of the promotion (which by now has worn off).

Also, anyone who tried to donate less than $1 was greeted with this picture before their order was finalized:

This likely had the effect of raising the $I cost of any transaction less than $1.

So, those are my thoughts on PWYW and the four currencies. I think the PWYW model is here to stay and can be successful in the future, but the novelty factor has now worn off.  That being said, PWYW seems like a much better option for generating revenue than an optional donation.

Part 4 : "Free-to-Play and the Four Currencies."

Details on upcoming GOLD version

EDIT:
For everyone who's been asking, YES! If you have bought any version of the game so far, you will most definitely receive the GOLD edition as a FREE udpate. With Level Up Labs "Free Updates" does indeed mean free updates :)

Hey Defender's Quest fans!

Monday is when we will normally issue updates, if we have any ready. We don't have one this week because I've been busy working on gold features, which will be held back until they're all done and then released all at once.  When we do have udpates, though, rest assured, you'll see them on Monday :)

Also, Anthony's at GDC all week so it's just me and James holding the fort, so it might take a little longer to answer emails / respond to forum posts, etc.

So, with that all being said, let me tell you guys what we've been up to lately! Announcing...

Defender's Quest GOLD EDITION

Gold edition will be version 1.0 of the game, but we haven't definitively and clearly stated what will and won't be in the game.

Now that development is well under way, here's what we can commit to:

New Art!
Yes, we're giving the game a major face-lift! We're keeping the character designs mostly the same, but we're putting in all new backgrounds, new sprite animations, and depending on time and budget might overhaul  the UI and some other elements as well.

For digital painting stuff, we've hired the amazingly talented Karen Petrasko, who's worked for  Amaranth Games, PassionFruit Games, Wadjet Eye Games, Gamenauts, and others.

Here's the new title screen she did for us:

Here's another quick tease - the new "golden man enthroned" background:

We'll share some more art in the future as we get it done :) We also have some sprite artists, too, but we'll share more details on that once we get some stuff done at that front.

Note for those with art-style grumps:
If you're incredibly attached to our old art style for some reason, we'll consider an option to switch between the styles. This will require us to switch the way we load assets to the game, so we'll only do it if we have time, it's technically feasible, and enough people really, really want it.  Unlike last time, we will have two complete sets of art , so it's at least possible this go-round.

This would add the native ability to mod the art style for the game, so it'd have other uses as well, but we've got a ton on our plate already, so unless there's a lot of demand please understand that though it's doable, it's a bit low on our priority list.

More End-Game Bonus Battles
We'll be including more bonus battles for sure.  Right now we're leaning towards most of these being "epic" battles, ie, a fixed-wave challenge, such as 50 or 100 waves, with one or more "endless" challenges as the very last ones, so there's a natural progression to the list.  Haven't decided for sure yet, but basically - more bonus battles!

Doing Something With Unique Equipment
You'll notice you can't sell any of your unique equipment.  This is because we're doing something with it in Gold edition - we're not sure just what yet, though!  Basically, I want there to be some mechanism for upgrading these items into "super" versions that are viable end-game choices. What exactly that means though is still TBD.


New Game PLUS
A common feature in JRPG's is a "New Game+" mode where you can start a new game using the data from a save slot that's already beaten the game, and experience some new features.  Chrono Trigger famously did this, letting you retain all your experience and equipment to blaze through the game and experience some secret endings.

In Defender's Quest, all you have to do to enable NG+ mode is beat the game. Any challenge level will do, so even if you only eke by with blue stars on casual mode, you'll still get there.

When you beat the game, your save slot will look like this*:

After you've started a New Game+, it will look like this:

*Just a design mockup. Final look will depend on the new UI and sprite styling.

"Play" will take you to your normal save slot.  "Play+" will take you to your New Game+.  The data for NG+ works under a "two-slots in one" model.

Your party data is shared between the two worlds.  All levels, xp, equipment, scrap, skills, etc, gained in one will be exactly the same in the other.  Your map and battle progress in each world, however, is tracked separately.  Since party data is shared, when you start a NG+, Azra starts out at full strength with all her xp, levels, and spells.  You start with an empty party but whenever you encounter each hero, like Slak, Ketta, etc, that character class is unlocked in NG+ mode, and you'll now see all of your recruits from that class at their old powered-up strength with all their equipment and skills.

All of the battles will be given a face-lift for NG+ that raises the challenge.  We could have just bumped everything up by X levels, but that sounds boring.  However, creating new content for each and every challenge would be way too much work.  What we're doing instead is creating new monster types that only show up in NG+ mode, and creating a global replacement rule across the game.

That means, every monster in normal mode will have a corresponding "alternate" version in NG+, kind of like how in the original Super Mario Bros' "second quest" the turtles were replaced with fireproof buzzy beetles, which in turn were replaced by unstompable spikeys.  We'll also apply a global monster level bump of some sort, and that will be how we generate the new battle content for NG+.  Hopefully that will be a good amount of new and interesting content without too much extra work.

These new monster types will have new and interesting behaviors, not just rehashes of stats and existing abilities. What exactly those will be is still a secret, though :)

For boss battles we might manually hand-craft the NG+ versions of those, we haven't decided yet.  Battle rewards will probably be new, and there'll most likely be a new set of non-unique items in the game so you still have stuff to spend money on.

New Game+ will also raise the level cap, for obvious reasons :)

The next thing about New Game+ mode is that it will include some other special features. Namely...

Side Quests

We've identified natural places to insert new missions that run perpendicular to the normal story arc. These will inject a bit more story and gameplay content and generally add spice.  These battles will be special and do things like restrict which classes you can use and a few other surprises so they're not just "more battles" (because we already have lots of that with NG+)

So, first off - why are Side Quests only in NG+ mode? Why not also in normal mode? A few reasons:

1. Most of you have already beaten the normal game
   If we include sidequests in the normal quest, there's little point in playing them in the normal mode as you'll be way over-leveled.
   
2. We like the "core" story experience of normal mode
   Side quests tend to slow games down.  We feel normal mode has really good pacing and a driving central motivation pushing things forward.  We feel that in normal mode, the sidequests would be distracting to new players, but in NG+ where you've seen the old stuff already, these will be a nice new treat.
   
3. If it ain't broken...
   We've got a good thing going with normal mode, so in the unlikely event sidequests totally destroy the narrative, it only affects a special bonus mode and doesn't tarnish first impressions of the game.

These sidequests will reveal a little bit more of the backstory of Defender's Quest and also give us more chances for individual characterization, as well as cool new battle set-pieces. The next feature is related to this end...

Azra's Journal

Being a Librarian, Azra has been writing down her experience in the Pit.  In NG+ mode a prominent "Journal" button will be added to the UI which lets you read her thoughts:

New Journal entries will be added as you progress through the game, documenting Azra's observations and generally fleshing out the experience through details, notes, and sketches.  We're going to try to nail that "British Naturalist in the Galapagos" vibe.

So, what's the point of the journal? And why is it only in NG+?

1. Gives our writer something to do
   Most of the NG+ features are art and programming heavy, but this will keep James busy and will hopefully provide some content that people who love story will really be able to dig into.
   
2. Provide NG+ story rewards
   In normal mode, before and after every battle you get a little cutscene, which is a great little reward.  In NG+, you've seen all the cutscenes already (and yes, we'll add an option to auto-skip cutscenes) so the reward is diminished.  This should provide a new story reward for those who are into that.
   
3. PacingThe Journal is available only in NG+ mode for pacing reasons, again.  In normal mode, I would be afraid people would feel obligated to click on it every time it shows a new entry, and since normal mode has so many cutscenes already it'd be in serious danger of slowing the player down.
   

We might use the journal to provide basic info-dumps on in-game things, like an enemy bestiary, for example.  If we do that, we'd probably make those basic functions available in normal mode, but keep the extra story entries as exclusives for NG+.

So, those are some things we can formally announce for Defender's Quest Gold edition!

One last thing, because some people have asked?

Why Gold Edition? Why not a sequel?

Some people have asked why we're bothering with such a big update to the game rather than focusing on immediately doing a sequel. Some have mentioned that the updates might be of only marginal value in attracting new sales and that our time would be better spent making an all-new game for our existing fanbase.

There's several reasons we're doing GOLD edition:

1. This is the game we want to make
   This is the definitive version of Defender's Quest, and we would have finished it to this degree if we could have afforded to, but we had to release early to survive. Now that we're doing pretty good, we can afford to roll out these bonuses and make the game we're happy with.
   
2. We really want to get picked up by Steam/HIB, etcWe've submitted to Steam and the Humble Indie Bundle, but haven't heard back from either.  These added bonus features - in particular the new art style - will give us a better chance of being noticed. If we get picked up by either we could likely expand our audience by 10x at least.
   
3. We want to put our best foot forward for Desura/Impulse/GamersGate/IndieVania/etc
   Regardless of whether Steam/HIB come knocking, we're going to launch on the other big digital distribution portals, and we want to polish up the game a bit before then so that we can really drive sales on first impressions.
   
4. Attract another round of press attention
   Releasing a big update will hopefully get us some more reviews. By responding to all the criticisms we've seen so far, hopefully the next round of articles will be even better :)

Oh right, I forgot one last thing:

RELEASE DATE : When it's done.

We slipped on our original release date for early release, and we're not making that mistake twice. Our honest estimate is something like a month or two, but who knows.  Could be longer, could be shorter. 

We'll keep you posted.

-Lars out.