Why You Can't Have Every Game for a Dollar

Writing as a guest for Gear Diary, Spiderweb Software's Jeff Vogel pens an editorial titled "You Can't Have Every Game for a Dollar" which, as you probably expect, deals with the issue of price for videogames, in particular indie ones.  It's a theme that Jeff has already dealt with plenty of times, most recently to explain his recent decision to lower his games' prices. Here's a sampling:
There are two sorts of prices we developers figure can charge for a game: You can charge an amount of money that feels like money, or an amount of money that doesn't. In other words, you can charge an amount of money that is so low that most people will feel like they aren't spending anything, or an amount of money that makes you go, (Hmmm. Do I want to spend this?)

Where is the line? How much money feels like money? Well, in my own mind, I use what I call the Frappuccino Rule. A frappuccino is one of those super-sweet caffeinated milkshakes they sell at the many Starbucks that have infected our Earth. The rule is that the price for a large frappuccino is the maximum amount you can charge and have your customers not think twice about it. This means that, once your game is around five bucks, it feels like spending money. Three or less, than it doesn't.

Within these two ranges (cheap and expensive), there isn't a huge amount of difference. Your game will make pretty close to the same amount if you charge a dollar or two dollars. (At $2, you only need to sell half of the copies to make the same amount of money as if you charge $1. Not difficult.) Similarly, the difference between a game selling for $10 and $15 isn't huge. But the thinking process that goes into deciding to spend $1 on a game versus spending $10 on a game is entirely different. Before people spend $10, they will think about it. At $1, they won't.

So why would anyone ever charge $10? People just clicking a button and buying your game without thinking about it sounds pretty good. I love it when people give me money without thinking!!! Why would you ever do anything else?

The answer to this is that the sort of price you charge depends on the sort of product you are selling. This is why some developers have to charge more for a game, no matter how many complaints they receive.

Thanks RPGWatch.