What will game cost on release?

[ashtonw]

 

Feargus has indicated that there's gonna be another Kickstarter sooner rather than later. I'm kinda hoping it'll be Hmmm Hmm Hmmmm Hm Hmmm Josh Sawyer's Personal Dream RPG Experience. I'd back that for sure, if only to see what would happen.

 

I'd totally back that. I'd also back Chris Avellone's Hatemance with Elf Genocide RPG Experience. Either one would be acceptable projects. 

 

 

Elf genocide? Sign me up!

[ManifestedISO]

I've never heard Obsidian say they value IP over cash, much less 'repeatedly'. It would be practically unethical for them to dismiss the value of profit from PoE.  

[nipsen]

Nice post,  anameforobsidian. It always surprises me, even though it shouldn't, when journalists, gamers, hardcore fans, analysts, etc. Insist that even if the game isn't very good, even if the studio that made it didn't really get paid and never could finish the game, even if the salaries people get are peanuts (and cut off halfway into the project), even if the employees are treated as crap (I mean, it's not exactly uncommon that some of the best developers retire from games-development and start using their education on something more profitable - by necessity, regrettably, etc.) -- then that doesn't matter as long as the company made a profit on the project.

 

Because then we will be given another bug-ridden, half-finished, soulless serial-produced game once more in the future. Which will be great. And the industry will go on.

 

The same people also bemoan a perpetual incoming industry-apocalypse because the cheap customers refuse to pay a premium for dlc, etc.

 

I mean, one day, we will have games-development houses that are supported in a way that they can operate independently. So they can develop quality titles while hiring out their excess personnel to publisher projects. And it will be common, and acceptable, for these developers to talk openly about "tent-pitchers" - that they do hired/requested work to earn money so they can develop what they want more freely.

 

That won't be the death of the industry by any means. Instead it will very obviously increase the talent and the output. And like I said, it really is disappointing when that goal, of independently financed developers, somehow isn't favored by actual people who just play the games. That's like literally saying: "I want Joss Whedon to make /only/ Avengers and Buffy - forever". ..Nothing of that creative stuff that slightly provokes people on the internet, please!

 

And it's made all the worse when the argument you hear - and I've had this said while I was listening, with my mouth open, right after the PoE Kickstarter took off - that Obsidian is a developer that has little discipline and knowledge of how to make good, polished games, so they should be grateful for the assistance a larger publisher will provide. Hence the kickstarter success is a curse in disguise, and we are only waiting for the kickstarter fails to come in (and you've seen some of the eager press about that subject, from that exact angle, in more than one major site).

 

Stuff like that.. not a huge fan, have to admit.

[Bryy]

 

 

they aren't making a dime until the game releases.

A horrific truth of Kickstarter is that each of your backers that pledged to a reward tier equals a sales loss.

 

There's a bunch of problems with a statement that absolute.

 

1.  A kickstarter pledge is a sale.  

What? No.

[Hiro Protagonist II]

<stuff>

 

I take it you either don't run a business or not in any position in management or authority overseeing the day to day running (of their area in) a business.

[Elerond]

 

 

 

they aren't making a dime until the game releases.

A horrific truth of Kickstarter is that each of your backers that pledged to a reward tier equals a sales loss.

 

There's a bunch of problems with a statement that absolute.

 

1.  A kickstarter pledge is a sale.  

What? No.

 

 

Kickstarter pledges aren't sales, but it is also fallacious say that they equal loss of sales, as game would not be made in first place without those pledges and popularity adds sales in most cases, meaning that it is probable that higher backer count owning game will sell more copies than lower backer count owning game.

[Karkarov]

Kickstarter pledges aren't sales, but it is also fallacious say that they equal loss of sales, as game would not be made in first place without those pledges and popularity adds sales in most cases, meaning that it is probable that higher backer count owning game will sell more copies than lower backer count owning game.

And truthfully some people are stupid like me and really really want to support Obsidian on this one and might rebuy the game when they see it cheap just to give them a little boost.

[anameforobsidian]

 

 

 

 

they aren't making a dime until the game releases.

A horrific truth of Kickstarter is that each of your backers that pledged to a reward tier equals a sales loss.

 

There's a bunch of problems with a statement that absolute.

 

1.  A kickstarter pledge is a sale.  

What? No.

 

 

Yes.  At least according to US Federal tax law, and state sales tax law.  It's a sale made before the game is made rather than after the game is made with little guarantees that the product actually comes, but a sale nonetheless.  Obviously there are a few outliers, like the order of obsidian and no reward chosen, but that is only a minute portion of the money raised.  There's hardly a better term for giving an organization money with the express expectation of receiving a product in return.   Despite talks of pledges, kickstarter is neither charity nor investment.

 

 

<stuff>

 

I take it you either don't run a business or not in any position in management or authority overseeing the day to day running (of their area in) a business.

 

 

Nice ad hominem.  I assure you that my experience as the assistant manager of Newark's only combination strip club / waffle house / shoe repair and leather tooling store make me more than qualified to comment on multimillion dollar game development.  I'd like to see the certified internet qualifications of everyone else before this thread goes any further.

[Amentep]

Yes.  At least according to US Federal tax law, and state sales tax law.

 

Technically US Federal tax law considers the money raised "income" for the entity behind the kickstarter and thus taxable as personal/corporate income; afaik it doesn't make a judgement on whether it is an income from purchasing something or not (ie, a sale of an item).

 

Sales taxes are levied at the state level in the US and an in-state "purchase" is considered applicable to local sales tax laws. I'm not clear on whether this includes tiers that aren't receiving the product, though (like the common $5 thank you tier).

 

From Kickstarter's perspective, a pledge isn't a sale which is probably what Bryy is referring to (this is, presumably, partially to cover themselves if a project never delivers anything). From a pledge's perspective, I think this makes the most sense to take the pledge as, to be honest.

 

I'd like to see the certified internet qualifications of everyone else before this thread goes any further.

I thought the internet was ruled by the "Opinions are like ****, everyone's got one" addendum?

Edited July 14, 2014 by Amentep

[Karkarov]

Doesn't matter what backwards tax law says.  Kickstarter FUNDED the game.  Therefore any money that came from Kickstarter is not a sale as that money was spent to make the game.  When you give money on kickstarter you are not pre ordering a game, you are funding it.  If you don't go and buy a copy after release then you were a 0 sale customer because your money was spent making the game and therefore generated 0 profit.

[anameforobsidian]

Think about it this way.  Let's say Obsidian had $4m sitting in the vault and they fund the creation of this game themselves.  When the game releases their balance books show -$4.5m.  The game sells 95k copies for $60 on steam, their balance books now show 0.

 

Now, let's say Obsidian had $0 in their bank account.  They do a kickstarter campaign and 74k backers give them $4m in funds.  The spend it all developing the game, but they finish the game and release it to their backers.  No one else buys it.  Their balance books now show 0.

 

From the basic accounting standpoint there is no difference between the kickstarter pledge and the purchase.  Each pledge or purchase is a credit / income; each expense during development is a debit.

Edited July 14, 2014 by anameforobsidian

[Junker]

If you ask me, anything over $40 and they are shooting themselves in the foot. You start to cater to the hardcore crowd at that point and you lose the impulse buyers and the new (usually younger) crowd of interested gamers.

 

I think a $29.99 tag on day 1 would be the way to go. You shouldn't have to lower your price for at least a year and you get a lot of extra sales from the casual gamers, RPG fans, and people that want to enjoy the CRPGs of old but can't get past the dated presentations of those games. Getting all those extra hot-off-the-press sales is very important if you plan on leaving a good impression because it greatly expands your audience that are willing to pay a premium for DLC or expansions.

 

Plus they were selling the game for $20 in Kickstarter. Do you really think they would allow for a 50+% discount to a sizeable portion of their sales right off the bat? The next tier sold the game for $25.

 

I think we're looking at a $30 game here, folks.

 

 

 

PS: Most "supporters" would not fund through Kickstarter if they did not get the products in return. Kickstarter is, in essence, a way to preorder a game that allows a funder to give even more in return for extra goods. You are preordering items. Yes, it makes you feel good because you feel like you are making stuff happen or funding a project, but from a business perspective your are simply minimizing or reducing debt. Sales post-release reduce the incurred development costs until they start turning a profit. In pure dollars and cents it doesn't matter if you bought the game for a reduced amount through Kickstarter or you buy the game after it is released.

Edited July 14, 2014 by Junker

[Bryy]

Doesn't matter what backwards tax law says.  Kickstarter FUNDED the game.  Therefore any money that came from Kickstarter is not a sale as that money was spent to make the game.  When you give money on kickstarter you are not pre ordering a game, you are funding it.  If you don't go and buy a copy after release then you were a 0 sale customer because your money was spent making the game and therefore generated 0 profit.

Exactly.

 

I'm getting rather tired of people going "but the law says this". It's the same thing as people going "but the dictionary says this" when using stupid phrases like cancer and rape to describe things that are nowhere near context.

[anameforobsidian]

 

Doesn't matter what backwards tax law says.  Kickstarter FUNDED the game.  Therefore any money that came from Kickstarter is not a sale as that money was spent to make the game.  When you give money on kickstarter you are not pre ordering a game, you are funding it.  If you don't go and buy a copy after release then you were a 0 sale customer because your money was spent making the game and therefore generated 0 profit.

Exactly.

 

I'm getting rather tired of people going "but the law says this". It's the same thing as people going "but the dictionary says this" when using stupid phrases like cancer and rape to describe things that are nowhere near context.

 

 

I don't think using rape out of context is the same thing as using tax law to define what a purchase is.  That sounds like a false equivalency.  Although, wouldn't you use a dictionary to define things?

Edited July 14, 2014 by anameforobsidian

[Bryy]

 Although, wouldn't you use a dictionary to define things?

My point is that things get said all the time out of context of what they have evolved to mean in a different context,

[Karkarov]

Think about it this way.  Let's say Obsidian had $4m sitting in the vault and they fund the creation of this game themselves.  When the game releases their balance books show -$4.5m.  The game sells 95k copies for $60 on steam, their balance books now show 0.

 

Now, let's say Obsidian had $0 in their bank account.  They do a kickstarter campaign and 74k backers give them $4m in funds.  The spend it all developing the game, but they finish the game and release it to their backers.  No one else buys it.  Their balance books now show 0.

 

From the basic accounting standpoint there is no difference between the kickstarter pledge and the purchase.  Each pledge or purchase is a credit / income; each expense during development is a debit.

I see your analogy but you are wrong.

 

In example 1 where Obsidian just had 4 mil and they self fund they then get their 95k sales and boom.... they have their 4 mil back and can self fund again or go to kickstarter for the money and just have 4 mil in the till.

 

In example 2 they had 0, we gave them 4 mil to make Eternity, then they get no sales so they are now back at 0 and either have to go to kickstarter again or lay people off and have nothing in the till and significantly fewer options on how to proceed.

 

You see the key difference is in Example 1 the balance sheet is 4 mil and no one is in danger of losing their job.  In example 2 the balance sheet is 0.

Edited July 15, 2014 by Karkarov

[Bryy]

You see the key difference is in Example 1 the balance sheet is 4 mil and no one is in danger of losing their job.  In example 2 the balance sheet is 0.

I wasn't going to bring this up, but the fact that, when I went to Obsidian, people were thanking me for giving them the ability to keep their jobs (which, by the way, is something I will never forget), it kind of proves that this is not a matter of "oh, they already have $4m in sales".

[Sedrefilos]

 

 

 

Saying that, the game have already been paid for and will not be shipped to stores, only purchased digitally. So the price to be honest shouldn't been more than 10-15$. But it probably will be higher, because you know, everybody wants to earn money.

 

Yes, those pesky concerns like rent and food.

Correct me if I'm wrong, but don't the devs gets payed during the creation of the game from the games budget and after release they take part in other games creation and get payed from that's game budget? And if they not working on other games their contract expires, I think one of the CEO's of Obsidian stated that on this forum. So their rent and food during the creation process is covered right now. 

And all that means that any cash from sales goes into company's income and will not necessary go for devs rent and food.

 

Sharp. I refuse to believe that you don't know what I was getting at, which was you implying that making money is somehow inherently bad. Or rather, more than the mythical Just Enough.

 

 Thing is, since the game is just a digital download and they don't have to pay for manuals, boxes, shipment etc, the game should have a relativly low price, compared to shipped products.

 We usually (always?) see that: a game has the same high price either you download it or purchase it from a retail store. Makes no sense.

[Malekith]

Divinity:Original Sin costs $40$ and it's the Top Seller for 2 straight weeks. Wasteland 2 and Pillars of Eternity will propably release at the same price.

[Sensuki]

Yeah I orginally posted $40-45 but after D:OS performance at $40, that's probably the number to go with.

Edited July 15, 2014 by Sensuki

[anameforobsidian]

Yeah, especially considering the rave reviews D:OS is getting. People will compare them unfavorably regardless of PE's quality if the price is higher.

 

 

Think about it this way.  Let's say Obsidian had $4m sitting in the vault and they fund the creation of this game themselves.  When the game releases their balance books show -$4.5m.  The game sells 95k copies for $60 on steam, their balance books now show 0.

 

Now, let's say Obsidian had $0 in their bank account.  They do a kickstarter campaign and 74k backers give them $4m in funds.  The spend it all developing the game, but they finish the game and release it to their backers.  No one else buys it.  Their balance books now show 0.

 

From the basic accounting standpoint there is no difference between the kickstarter pledge and the purchase.  Each pledge or purchase is a credit / income; each expense during development is a debit.

I see your analogy but you are wrong.

In example 1 where Obsidian just had 4 mil and they self fund they then get their 95k sales and boom.... they have their 4 mil back and can self fund again or go to kickstarter for the money and just have 4 mil in the till.

In example 2 they had 0, we gave them 4 mil to make Eternity, then they get no sales so they are now back at 0 and either have to go to kickstarter again or lay people off and have nothing in the till and significantly fewer options on how to proceed.

 

You see the key difference is in Example 1 the balance sheet is 4 mil and no one is in danger of losing their job.  In example 2 the balance sheet is 0.

 

 

Sorry, you're right that the two weren't quite equivalent.  Although, their balance sheet does hit zero (or the limit thereof) right before the game launches in the first example, and people are in danger of losing their jobs if it doesn't sell.

 

So what if Obsidian had 4 million in the bank, raised 4 million from kickstarter, and spent all the kickstarter money and no one bought it?  The relationship of the change is the same.

 

Sales can just be seen as deferred kickstarter pledges and vice versa.

 

 

You see the key difference is in Example 1 the balance sheet is 4 mil and no one is in danger of losing their job.  In example 2 the balance sheet is 0.

I wasn't going to bring this up, but the fact that, when I went to Obsidian, people were thanking me for giving them the ability to keep their jobs (which, by the way, is something I will never forget), it kind of proves that this is not a matter of "oh, they already have $4m in sales".

 

 

They do already have $4.5m(ish) in income, and the money from those sales allowed a substantial portion of the company to keep operating for two years, thus letting people keep their jobs.  The fact that it was important to them and to you has no bearing on the balance sheet; income is income.

Edited July 15, 2014 by anameforobsidian

[Chilloutman]

From time they invented biggest evil in gaming industry *cought* DLC *cought* I dont buy day one even if its golden brick for 1$

[Valmy]

I hope 39.99.  I, and many RPG fans, will be getting this at release.  Obsidian should not worry, a profit will be made.  Now I just hope they reward our confidence.

[Bryy]

Thing is, since the game is just a digital download and they don't have to pay for manuals, boxes, shipment etc, the game should have a relativly low price, compared to shipped products.

 We usually (always?) see that: a game has the same high price either you download it or purchase it from a retail store. Makes no sense.

How does that negate the fact that making a profit is not bad?

[anameforobsidian]

Making profit is neither bad nor good.  It's only bad in the sense that too much profit is normally an inefficient allocation of resources and thus can take jobs away from where they would be better used, and good in the sense that a long term negative profit means that a firm will shut down and people will lose their jobs.  

 

In the ideal (most efficient) market, the average economic profit is zero.

Edited July 15, 2014 by anameforobsidian