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On Universal Combat Pricing

In apparent response to 3000AD's Derek Smart's complaints about the price point for Universal Combat (story), DreamCatcher sends along a brief statement describing their stand on the decision to market the game as a value-priced product:

A DreamCatcher Spokesperson says “Our pricing strategy has been set in the best interests of the title and more importantly the consumer. Universal Combat provides terrific value to the consumer at $19.99 and we are happy to be able to deliver that value.”

DreamCatcher does not expect to comment further on this matter.

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49 Replies. 3 pages. Viewing page 1.
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49. Re: I'll throw old Derek a bone here Jan 31, 2004, 12:36 Chris
 
This is a very strange situation because Derek and the publisher have interests which coincide: They both want to make as much profits as possible off the game. Of course, that isn't the same as setting a very high price for the game because demand curves slope down!

Disagreement over pricing suggests only a few possible scenarios:

1. The contract is not sensibly written, leading to divergent interests over decisions such as pricing. This would be the case, for example, if Derek gets a fixed fee per unit sold rather than a fixed share of the profits, although in that case the publisher would prefer a higher, not lower, price than the Derek.

2. Derek and DC have have different expectations over demand for the game. Derek thinks that $40 will maximize profits while DC thinks that $20 will maximize profits.

3. Derek doesn't understand elementary economics and simply thinks that higher price --> greater profits.

4. Derek may recognize that price=$20 maximizes profits but also thinks a budgetware release will harm his repuation. His reputation is one aspect where his interests and DC's don't coincide. In other words, he's willing to lose profits in order to gain the prestige of a higher-priced game.

My guess is that the explanation is rests on points 2 and 3. Regardless of the explanation, Derek's public temper tantrum and promise not to support the title is impossible to interpret as anything other than yet another epic business blunder.

 
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48. Finally - Discount Jan 31, 2004, 07:55 emgarf
 
It's about time we got a discount as compensation for Derek Smart's whining, although he probably owes us money at this point.

 
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47. Game Price Jan 31, 2004, 00:35 The Half Elf
 
But I also have to admit that when I got into a software store and I see a box and pick it up and look at the cover the price is useally the first thing I see, and when I see 20 bucks for a game I'm not familiar with I useually take a quick glance at the box art, see if it's value ware and put it back.

And in all honestly if I had no information about a game such as Deus Ex 2 and saw it on a shelf at the local EB for say 19.99 one of the first things I'd wonder is if it is indeed valueware.

But I do think that 29.99 would be a better MSRP then 19.99 provided it's not a typical Derek Smart game that you can't play more then 10 mins cause it's bugged and feature's are missing. Then it should be 'pay me to play it'

 
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46. January Jan 30, 2004, 19:08 Cyski
 
Hey at least it's given up some interesting reading in the slow gaming months!

Personnelly I believe DC are thinking "This guy is a twat, let's hurt him the best we can". I'm damm sure they're lawyers are better then DSs - christ I can understand that letter to DC and not once does it refer to his contract stating he has a contractual right to be involved in setting the price.

It's basically a letter saying "Please mr DC sell it for more then 19.99 even though there's fuck all we can do about it"

I wonder if he'll post the reply where DC, ever so politly, tell him to piss off.

 
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45. cmon dude Jan 30, 2004, 16:53 space captain
 
what, larger than Derek Smart??

that is the ONLY implication... they certainly arent "big name" publishers

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44. Re: this GARAUNTEES another damn BC game... Jan 30, 2004, 16:46 Hump
 
who do you think has deeper pockets?

Derek fuckin Smart... or an (almost 10 yr old) multi-national corporation??

I don't think Dreamcatcher is a large as you are implying.

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43. Re: Ouch! Jan 30, 2004, 16:40 sinner's saint
 
"Normally, I don't respond to idiots, lunatics, or pedophiles. But as you can see, in your case I've made an exception... "

Gee can you coin that phrase too mr ingenious?


 
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42. what is 6 x 7? Jan 30, 2004, 16:19 space captain
 
post 42...

(in honor of Marvin)

_____________________________________________
Give me slack. Or kill me.
 
______________________________________________
"When the bomb drops it'll be a bank holiday
Everybody happy in their tents and caravans
Everybody happy in their ignorance and apathy
No one realizes until the television breaks down..."

- SUBHUMANS
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41. this GARAUNTEES another damn BC game... Jan 30, 2004, 16:17 space captain
 
who do you think has deeper pockets?

Derek fuckin Smart... or an (almost 10 yr old) multi-national corporation??

bye, bye, mr. smarts profits!

the next game will be "Battlecruiser: Revenge Mode"

_____________________________________________
Give me slack. Or kill me.
 
______________________________________________
"When the bomb drops it'll be a bank holiday
Everybody happy in their tents and caravans
Everybody happy in their ignorance and apathy
No one realizes until the television breaks down..."

- SUBHUMANS
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40. Re: Ouch! Jan 30, 2004, 16:07 WaltC
 
"To coin a phrase, "It's the price, stupid"... "

Wtf kind of phrase is that. Please shut your gay hole.


Normally, I don't respond to idiots, lunatics, or pedophiles. But as you can see, in your case I've made an exception...:)

 
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It is well known that I do not make mistakes--so if you should happen across a mistake in anything I have written, be assured that I did not write it!
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39. I'll throw old Derek a bone here Jan 30, 2004, 16:05 Creston
 
I can see where he's coming from. If you're working on a title expecting it to go for 40 bucks, and the publisher decides to sell it for half, you're not looking at very much profit. The store takes about 25-35%, you can bet your ass that the publisher takes their cost plus a healthy 20% or so, that doesn't leave very much money for Derek and his boys.

Now, even though he is an idiot of a magnitude almost unheard of in the game industry, that doesn't mean he isn't entitled to make a buck, or be rewarded for what's undoubtedly been hard work for a number of years. If he and Dreamcatcher agreed on a full price title, Dreamcatcher shouldn't release it as a budget title. (how that works legally is really a contractual matter between the two parties, into which we have no insight.)

What I can never understand about Derek is why he keeps making this crap? He can blab about his niche games all he wants, but why does he PERSIST in making this battlecruiser junk, when (how many now, four?) previous titles haven't sold worth diddly squat.

I'm sure that if he and his team put their effort into it, they could make a decent FPS. Or even a decent spacefaring game, a la X2, albeit smaller, less beautiful and probably not as involved. But I think they could still be pretty decent games. And yet over and over again he keeps making this weird hybrid crap nobody wants to play. Oh well, it's his money. I'm sure that after this latest incident, even if he's right, publishers will just be lining up in droves to work with him.

Oh, and Derek? For God's sake, buy yourself a decent dictionary and take some sixth grade grammar lessons. Make sure your lawyer joins you.

Creston

This comment was edited on Jan 30, 16:06.
 
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38. Re: Ouch! Jan 30, 2004, 16:04 Bronco
 
I would guess that the case here - remember, UC was Battlecruiser Generations, being funded internally before he made the deal with DreamCatcher. I would guess that he gets, as I said, a royalty on sales in return for the decreased development costs to DreamCatcher (IE - his own funding). If so, I can see why he would have (and why DC would agree to) some clause concerning pricing at retail.

This sounds a little bit like movie studio accounting.

If DC sets the price low enough to keep DS royalties from kicking in but still make a profit. Pretty sneaky if it is true.

Normally I wouldn't spend so much time speculating on this but DS seems so intent on telling the entire world his personal business that I almost feel obligated to comment.


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37. Re: Ouch! Jan 30, 2004, 16:01 Anvil
 
I would guess that he gets, as I said, a royalty on sales in return for the decreased development costs to DreamCatcher (IE - his own funding). If so, I can see why he would have (and why DC would agree to) some clause concerning pricing at retail.
Thanks. I'm afraid I think of royalties in general as x$ per unit not x% of sales price. I'm a bit daft not to think that you could do it the second way.
 
Anvil - from the land of warm beer and mad cattle.
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36. Re: Ouch! Jan 30, 2004, 15:59 sinner's saint
 
"To coin a phrase, "It's the price, stupid"... "

Wtf kind of phrase is that. Please shut your gay hole.

 
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35. Re: Ouch! Jan 30, 2004, 15:57 Hump
 
I would guess that the case here - remember, UC was Battlecruiser Generations, being funded internally before he made the deal with DreamCatcher. I would guess that he gets, as I said, a royalty on sales in return for the decreased development costs to DreamCatcher (IE - his own funding). If so, I can see why he would have (and why DC would agree to) some clause concerning pricing at retail.

It sounds logical but that may not be the business model that DC and Derek agreed on.

As an example 4DRulers developed Gore over a number of years but somewhere along the line DC ended up getting cash and 4DR got nothing (or so I'm told). Obviously its more complex than that but thats the basic idea.

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"Perhaps the answer to the perennial problem of delinquent teenagers dropping bricks from motorway and railway bridges is to sue the creators of Tetris."- Unknown Author
 
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"Both the “left” and the “right” pretend they have the answer, but they are mere flippers on the same thalidomide baby, and the truth is that neither side has a clue."

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34. Re: Ouch! Jan 30, 2004, 15:43 WaltC
 
Smart's complaint about the retail price strikes me as bizarre. Often, when best selling games are talked up (The Sims, Wheel of Fortune, Who Wants to be a Millionaire?, etc.) what is never mentioned in conjunction with those games is the average per-unit selling price. On one occasion I spotted "The Sims" on a WalMart software shelf for $14.95, brand new, and from that point on I've never had any doubt whatever as to why "The Sims" has sold so well (read: in such high volumes), nor do I have a problem understanding it with other $15-$20 games.

To coin a phrase, "It's the price, stupid"...:) The simple fact is that for average folks checking out computer games $15-$20 games are much more attractive than $50-$60 games, especially when an average shopper thinks--"Look, I can buy these THREE games for the same price that ONE game costs--what a deal!" And there you have shopping psychology in a nutshell. I have been waiting for a long, long time for the major software publishers to figure this out, and to figure out that selling software at such low prices often ensures phenominal sales in terms of volume, and that low prices are their best possible defense against piracy, both casual and organized. I'm still waiting, and DS seems particularly dense on the subject.

I've spent $50 before on games that I would class as "real stinkers," and have learned the hard way that paying more for a computer game is no guarantee of anything, and that paying less does not guarantee inferiority. As far as I know, there is no law written anywhere that states a "good computer game must cost at least $40." It's too bad that people think about it like this--bad for both customers and publishers because the idea is so limiting.

When we hear, for instance, that "Myst has sold X million copies" (I've seen 5-7 million inserted here), you can take to the bank the fact that great majority of those copies were not sold at the $40-$50 price, but rather for well under $20, many at the $10-dollar level in bargain bins, and many bundled with other software for less. Also keep in mind the $10 bargain bin pricing is what the retailer is selling it for, and not necessarily what the retailer paid the publisher for it.

Just a few weeks ago I bought M$'s Dungeon Siege LoA expansion pack for $24.95 at Best Buy's, and it included two games--the original, engine-updated Dungeon Siege KoE along with the LoA expansion, and if you were new to Dungeon Siege that works out to $12.50 per game! And even if you only consider it an expansion to the original game, it was still priced only $5 higher than what DS is complaining about. And LoA is in every sense a high-quality product--played it through in 40-some hours (took my time) and never crashed once. It should sell very well at this price point.

I hate to say it, but Smart's worry about this, stated publicly as he has done, doesn't bode well for the game Dream Catcher is trying to sell. It sounds like he's worried that the up front money won't be enough and he fears that the game sales will decline rapidly once people find out about it--and so he's peeved because he doesn't think he'll make enough money before interest in the game drys up. I mean, if it was a really good game and Smart knew it I assume he'd be dancing in the aisles at such an intelligent decision on the part of his publisher, since good games at that price point sell millions of copies. I am sure his publisher has grown fonder of Smart over this incident...:) (Heh...:))

Edit:typos
This comment was edited on Jan 30, 16:13.
 
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33. Re: Ouch! Jan 30, 2004, 15:42 Blackhawk
 
That is the basic model, but there are always variations. Derek Smart hasn't released the specifics of the contract; doing so would put him in default (since most such contracts have a built-in NDA). It has been 3000AD's practice, though, that they have funded their own games' development, then, when published, they take a royalty on sales.

I would guess that the case here - remember, UC was Battlecruiser Generations, being funded internally before he made the deal with DreamCatcher. I would guess that he gets, as I said, a royalty on sales in return for the decreased development costs to DreamCatcher (IE - his own funding). If so, I can see why he would have (and why DC would agree to) some clause concerning pricing at retail.

 
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32. Open letter to D.Smart & DreamCatche Jan 30, 2004, 15:39 Enahs
 
DreamCatcher wants to sell the game for $19.99, and for legitimate reasons they want this game cheap. We know from Serious Sam that budget titles, if it is any good it can make you money!

Now, with the deal Derek Stupid has worked out with DreamCatcher, which none of us know, he is saying they will not get enough money. It could be true, or he could just be trying to be a greedy whore because he knows only a SMALL suck-up fanboys will buy this game, so he needs as much form each game as possible. But it really could be true, $19.99 (remember though, this is the stores price, and they are making some amount of money off that, so you have to split less then that two ways). So Mr. Stupid wants to sell it for $39.99.

Has any of the damn geniuses on either side stood back, and though well…..we both have good points, let’s compromise.

$29.99! That is still a cheap game that might open up more of an audience to the game (which is DreamCatchers intention), and they will make enough money to support the game!


Is that so freakin’ hard you (Mr. Smart and DreamCatcher) incompetent jack-holes?


_____
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31. Re: Ouch! Jan 30, 2004, 15:35 Anvil
 
This is how I would expect contracts like this to work.

dev gives distribution rights for game to publisher in return for:

a) x dollars thru development on completion of milestones.
b) y dollars per game sold.

Publisher gives marketing effort and receives the income from sales.

developer makes money by developing for as little as possible (less than x dollars probably), publisher makes money when (avg sale price - y)*no of games sold > x + cost of marketing.

this idiots guide can't be correct though because then the developer would logically have no say in setting the retail price - it isn't their revenue stream.

does the games industry in fact know nothing about how to make money?
 
Anvil - from the land of warm beer and mad cattle.
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30. Re: The thing I don't get... Jan 30, 2004, 15:28 Hump
 
...is why, after all the previous problems, Smart does not have either control over these items or extremely specific agreements.

I imagine he mustve gone into the contract with some pretty specific language after the crap he went through with BC3000AD.

As someone else said, DC must be on some kind of solid legal footing to do something like this. I can't fathom anyone in their right mind breaking a contract in such a way unless they know they're secure.

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"Perhaps the answer to the perennial problem of delinquent teenagers dropping bricks from motorway and railway bridges is to sue the creators of Tetris."- Unknown Author
 
Avatar 10137
 
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"Both the “left” and the “right” pretend they have the answer, but they are mere flippers on the same thalidomide baby, and the truth is that neither side has a clue."

- Jim Goad
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49 Replies. 3 pages. Viewing page 1.
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