The Power of (Almost) Free
Or, “if it’s truly worth something, offer to give it away.”
2D Boy, makers of World of Goo, recently published the results of a little experiment: they offered to sell anyone a copy of their game for whatever an individual user was willing to pay for it.
About all that can be said about the extraordinary nature of the response has been said here. Summary: 2 blog posts | 57,000 copies sold | average price: $2.03.
That’s $114,000 in incremental revenue, for a game that had already been on sale for a year. No additional development effort, just a couple of blog posts.
Of course, it helps to have a product that people want and love.
There is a lesson here for anyone who sells digital products: if it wasn’t immediately clear already, you are at the complete and total mercy of your audience. The point is not that 17% of people chose to pay as little as possible for World of Goo; it’s that 83% chose to pay more. Most chose to pay, in their own words, “about what they could afford.”
For physical products, this pricing model does not work: it does not matter what you can afford to pay for that BMW, it’s going to cost what it’s worth. Granted, there are intangibles factored into that price (prestige, reputation, bragging rights… things that, you know, comprise a brand), but by and large the constraint on pricing is a matter of physics.
Not so with digital merchandise, where the only contributors to value are intangible: that is, value is measured inconsistently across the range of possible uses and users, and those able to pay more are likely to do so only if their perception of value is consistent with their budget. That is:
price = (budget / value)
Note that this is different from the give-away-the-razors-and-we’ll-sell-the-blades model that EA Games offered with Sims 3, or that seems to be the business model du jour. (Hey, the value’s in the community, so we’ll just charge for that!) In that model, centralized control of the economic model is still sought out. When the content creator seeks to control both its distribution and consumption, they often find that the marketplace responds in “irrational” ways: piracy at best, indifference at worst.
Putting your product into the hands of the people who will love it, and giving up control, does two things. First, it enables at least the possibility of outsize rewards, if you truly deserve them. Second, it simply acknowledges reality: you don’t have control anyway.
What a relief this should be for people who are actually passionate about what they’re creating: the monetary and intangible rewards become much more intricately linked with the true value you create, rather than the “message” you’re able to sell.
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