The system works!

That is to say I pirated a game before and felt it was worth buying. Once it came down to a price point that suited me, I bought it.

I’ve ranted about this before and I’m sure I will again – it seems that many people, executives included, cannot grasp that digital goods can be priced at a very low price point and still make a significant profit.

It comes down to a combination of low marginal cost and the technology adoption cycle:

20110714211709!DiffusionOfInnovation

Ooh, and bit of Bottom of The Pyramid: Anti-capitalism_color

The current/old way of thinking stipulates that the goods have a value and below that price point one either a) makes a loss or b) “devalues” the product.

What this way of thinking doesn’t take into account is the fact that a) is no longer relevant in the realm of digital goods due to the aforementioned negligible marginal cost and b) is nonsense.

Take Assassin’s Creed Revelations for Windows. I bought it for £3.74 today. It is still being sold for £15 at various big name retailers.

Does an influx in sales seem likely at this stage? It came out in Q4 2011. By annual video game franchises that’s pretty old. The notion that the series should command that kind of price tag at this point is somewhere between arrogant and moronic. It’s a good game but at that price it’s competing with much newer, better things.

On the other hand, how big is the market that would pick it up for £3.74? I’ve often paid more than that for a pint.

Publishers seem to be slowly realising that there’s little point in demanding what they feel an old product is worth. They can spin all the snake oil tales they like, the crowd is just walking away. Make us an impulse-buy offer and those of us who want it will buy and those of us at the bottom of the pyramid can also finally afford the damn things!

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