Player stats, sales, and reception speculation thread

[Siptah]

Why would they charge a premium triple-A price for a product with a lower customer base?

I don't understand this question. Price and costumer base aren't independent. Customers that thought civ 7 (or 6) was worth the fully premium price bought it at release. Customers that evaluate a game differently buy when the price is down to that, which might have been as low as 5€ for civ 6 for millions of people for all I know. That's what sales are for: enlarging your customer base by people that would not pay premium price (aside from some psychology of consumerism in action that gets people to buy stuff in general). But isn't a lower customer base a good reason to increase the price? That's how premium products work very often, at least in my experience. I'm not saying that civ 7 turned out a premium product though nor that the customer base will always be smaller - but I think the competition in the 4X and historical strategy market is tougher than it was in 2010 or 2016.

I think Firaxis thought that those who played Civ in the past would migrate seamlessly over to 7 and pay that premium and then some.

It's speculation on both our parts, but I don't think so. The experience from the past games show that the transition process is slow. Hence, I don't think that FXS expected a seamless migration. Yet, it might well be that they expected faster/more sales from their previous customers, but I can't know that.

I think the more troubling part comes when you see that the audience isn't migrating to the new game even after a long time and multiple sales. For example, AoE2 and its earlier successors AoM and AoE3, which never really caught up in MP, or AoE2DE and AoE4 today. But I honestly think it's way too early for such a call with civ 7. If it has received a year or two of patches, was sold for 10€ in sales, and is still trailing around the current numbers though...

 

[misesfan]

I don't understand this question. Price and costumer base aren't independent.

This is basic economics. Demand for a good is inversely proportional to the price of that good offered. The higher price the lower the demand. Supply of a good is directly proportional to its price. The higher the price, the higher the supply.

Why would Firaxis or 2K offer something at a premium AAA price if they didnt think that the demand would not be there? They wouldnt - its basic econ. They took advantage of their customers ( I would say in a predatory manner) and are trying to gouge as much revenue as they can.

 

[protocol7]

I agree there must have been a pretty cynical conversation at some point about whether they should cash in on years of goodwill in order to sell an unfinished game at top dollar.

 

[aelf]

Well, basic economics don't figure that much into real-world pricing decisions. Nobody really knows where the equilibrium is or at which price point they'd be able to make the most profit taking into account monopolistic tendencies (under monopolistic competition). So pricing decisions are based on a whole lot of other factors, including (probably in a major way) the average price of comparable goods, the pricing set by competitors, and cost of production.

 

[0urBall]

I agree there must have been a pretty cynical conversation at some point about whether they should cash in on years of goodwill in order to sell an unfinished game at top dollar.

Which hopefully (and this would be my hope) was Firaxis on one side asking for a lower price/more time to finish/polish the game, and Take 2 on the other side being Scrooge McDuck and wanting to milk the established customer base for everything they've got

 

[KayAU]

[A minor correction: the all time low for the 24h peak of civ VI was 11k players at March 22, 2017. This was an outlier, but daily peaks below 20k were pretty common around that time. It doesn't change your overall argument though.]

Thanks for the correction. I was looking at the all time graphs, which are smoothed, just to get a sense of the "normal" player counts. As you say, it doesn't change the overall argument, but I should probably have specified that.

 

[misesfan]

Well, basic economics don't figure that much into real-world pricing decisions

The law of supply and demand has been proven to be true spanning though time and culture. It is as provable and universal as the law of gravity.

I think we are arguing in circles here. So I will leave it with this - I think that Firaxis, or Take2, has deliberately and predatorily priced this latest release. The game is certainly not worth either the 'base' $70 price tag, let alone the laughable $120 early access cost. This game is not a AAA game, but it has AAA prices. The demand for the game is lower because of the predatory price and people commenting on the shoddy craftsmanship. For the long-term health of the franchise, they need to course-correct. I dont think they will, I think they will double-down, and I think they will fail.

 

[trev1972]

The law of supply and demand has been proven to be true spanning though time and culture. It is as provable and universal as the law of gravity.

I think we are arguing in circles here. So I will leave it with this - I think that Firaxis, or Take2, has deliberately and predatorily priced this latest release. The game is certainly not worth either the 'base' $70 price tag, let alone the laughable $120 early access cost. This game is not a AAA game, but it has AAA prices. The demand for the game is lower because of the predatory price and people commenting on the shoddy craftsmanship. For the long-term health of the franchise, they need to course-correct. I dont think they will, I think they will double-down, and I think they will fail.

Again can only speak personally, but if the game was top notch, allowed me to play gigantic maps and the ages system / civ switching was an optional game mode instead of mandatory gameplay then i would not care about the price at all. Its a guess but i would not be surprised if 4x game players are on average a bit older than typical gamers (and probably more able to afford games without worrying about the cost)

 

[aelf]

The law of supply and demand has been proven to be true spanning though time and culture. It is as provable and universal as the law of gravity.

People who only learned basic microeconomics wield it like a hammer looking for nails.

Supply and demand explains something that has already happened (supply and demand reaching an equilibrium at a certain price). It doesn't really tell you how to price something when you produce it.

 

[Ornen]

The law of supply and demand has been proven to be true spanning though time and culture. It is as provable and universal as the law of gravity.

this glosses over valid criticisms that have been posed at economic theory over the decades — and in any case, it’s hardly “universal” enough for you to apply it meaningfully to a product (digital licenses) in which the supply is effectively limitless.

the question at hand really isn’t microeconomic supply and demand, it’s pricing strategy. if you’re really interested, this isn’t a bad starting point on how firms think about pricing in the real world https://hbr.org/1995/09/how-do-you-know-when-the-price-is-right

but my real point is that supply and demand is not very relevant in this case.

 

[Kyriakos]

Maybe Firaxis could release a "classic Civ option" expansion, which would still allow for the current state of Civ7 but also give you the option to go "classic" where civs won't be changing randomly with era nor have leaders from completely unrelated civs. And test the waters with it. If it does well, they can entirely remove the current set-up in a follow-up expansion. Of course such a plan will cost serious money to implement, and the product won't be ready anytime soon; yet if it looks like Civ7 will simply fail as it currently is, it might be worth trying.
Anyway, they really should have researched the target audience better, but it's neither the first nor the last time this happens to a company.

 

[sixty4half]

Is it normal that there are now more Civ V and Vi players on Steam than Civ VII?

Yes. The same thing happened shortly after launch of 5 and 6. People play a few games, get tired of seeing the same leaders/civs every game and go back to a complete game with more diversity.

Not sure that statement can be true, really ?, you believe more players were playing civ 4 and 3 than Civ 5 ? and likewise more playing 4/5 than 6 and can even be checked .

It absolutely is.

This is further co.pounded by Civ 7 being the first full version released on consoles at launch. Most of those playing on console will go back to their steam version of 5 or 6.

 

[99-percent-sure]

If it does well, they can entirely remove the current set-up in a follow-up expansion.

Why is this step necessary? Why must the option to play Civ VII as-is be eradicated?

 

[Kyriakos]

Why is this step necessary? Why must the option to play Civ VII as-is be eradicated?

I am not against it. It would cost even more money, though - unless they don't update current-Civ7 at all and focus on the Civ-classic in expansions (all this under the assumption that Civ-classic does well).

 

[sixty4half]

I am not against it. It would cost even more money, though - unless they don't update current-Civ7 at all and focus on the Civ-classic in expansions (all this under the assumption that Civ-classic does well).

This makes no sense. Why would it cost more money to give a "classic civ option" (you're words not mine) AND keep the current civ 7 system?

 

[Krikkit1]

I am not against it. It would cost even more money, though - unless they don't update current-Civ7 at all and focus on the Civ-classic in expansions (all this under the assumption that Civ-classic does well).

Don't tell me you think they are trying to make Civ7 into New Coke so they can sell Civ 1 remastered.

 

[Kyriakos]

This makes no sense. Why would it cost more money to give a "classic civ option" (you're words not mine) AND keep the current civ 7 system?

In the post of mine you quoted, you can see an "unless", which refers to "unless they just never do more work on non-classic". Surely you can agree that Firaxis won't be updating two widely different versions?

 

[sixty4half]

Exactly. You're solution involves stopping updates to the current system. You're earlier post says they missed their target audience and that they should remove the current system. What we're asking is, how does that benefit them at all? You're implying that those of us that do like civ 7 are not the target audience? How does that solve things for the rest of us, that like the game?

Sure, they just alienate the player base that likes the game. That'll do them good!

I don't have a problem with a mode without ages, but not at the cost of the current system.

More options are better. More restrictions are not.

 

[AddAdamSmith]

I have no desire to read this whole thread, but the last few posts have missed the keynote section from Econ 101.

Firaxis behaves as a monopoly. They’re the only ones that can sell Civilization. You could argue that they supply “strategy video games” in a more competitive market, but the discussion here already treats them as a monopoly. Maybe it’s a fun toy problem to think of what price Civ would need to be selling at to bring more Civ knockoffs to market, but that’s beyond the scope of what economics the State of Georgia mandated I learn. What everyone is trying to describe is what price should a monopoly set to maximize revenue.

Without price discrimination, that’s the price where marginal revenue equals marginal cost. But Civ is a software product, marginal costs are extremely low! That would imply the price would be extremely low, but it isn’t! Why?!

In the scenario above, consumer surplus is very high. Think about how happy you are when you buy the anthologies. You would be willing to pay much more, but you pay a lot less. Yay!

But won’t someone think of the poor shareholders? There’s all these people willing to pay much more money, but you’re not charging them that much! That’s so much lost producer surplus!

Thankfully, software and gaming companies have gotten very good at price discrimination, or finding clever ways to charge different people different prices. Gimmicks like Steam Sales, prelaunch early access, and limited editions are all exist to find ways to charge higher prices to customers willing to pay a higher price.

So really the question should be why aren’t they charging even more? Clearly lots of people were willing to pay for the Founder’s Edition and are happy about it. So why not go further? I’d easily cough up the cash for Ben Franklin skins. So why is Firaxis working on adding things for the consumers with much lower willingness-to-pay and not milking my wallet with Beach Day Benny? Do they hate their shareholders?

Obviously this is tongue-in-cheek, but it’s a good mental model for how a lot of games work, and why we see more GAAS and gimmicks like that. You might not like it, but not liking it isn’t the same as not willing to pay!

 

[Ornen]

I have no desire to read this whole thread, but the last few posts have missed the keynote section from Econ 101.

Firaxis behaves as a monopoly. They’re the only ones that can sell Civilization. You could argue that they supply “strategy video games” in a more competitive market, but the discussion here already treats them as a monopoly. Maybe it’s a fun toy problem to think of what price Civ would need to be selling at to bring more Civ knockoffs to market, but that’s beyond the scope of what economics the State of Georgia mandated I learn. What everyone is trying to describe is what price should a monopoly set to maximize revenue.

Without price discrimination, that’s the price where marginal revenue equals marginal cost. But Civ is a software product, marginal costs are extremely low! That would imply the price would be extremely low, but it isn’t! Why?!

In the scenario above, consumer surplus is very high. Think about how happy you are when you buy the anthologies. You would be willing to pay much more, but you pay a lot less. Yay!

But won’t someone think of the poor shareholders? There’s all these people willing to pay much more money, but you’re not charging them that much! That’s so much lost producer surplus!

Thankfully, software and gaming companies have gotten very good at price discrimination, or finding clever ways to charge different people different prices. Gimmicks like Steam Sales, prelaunch early access, and limited editions are all exist to find ways to charge higher prices to customers willing to pay a higher price.

So really the question should be why aren’t they charging even more? Clearly lots of people were willing to pay for the Founder’s Edition and are happy about it. So why not go further? I’d easily cough up the cash for Ben Franklin skins. So why is Firaxis working on adding things for the consumers with much lower willingness-to-pay and not milking my wallet with Beach Day Benny? Do they hate their shareholders?

Obviously this is tongue-in-cheek, but it’s a good mental model for how a lot of games work, and why we see more GAAS and gimmicks like that. You might not like it, but not liking it isn’t the same as not willing to pay!

"I am going to ignore not only this thread, but the pricing strategies that firms actually use to set prices, and instead try to apply what I learned in college economics to a situation in which these theories do not apply in any sensible way unless your entire way of thinking is based on applying economics to everything"