OUYA Subscription Model

[arcticdog]

I'd just like to give my opinion, for whatever its worth

I think this is a good idea by Ouya, people are talking about. I think its a very good deal for Devs. But here are two ways it is bad for me:


Me as a "lightweight" consumer:

Obviously for pass purchasers it is a good deal, but from a consumer point I'm not so sure. I wouldn't be planning on spending €60 on Ouya games in the year so in theory I should not buy a pass.

Let me try explain why I think it will be bad for me. I'm going to use Bombsquad as an example

Video games in general in economic terms are elastic goods. A change in price impacts the demand for the game. We see this every few months with Steam sales, where the price drops and demand shoots up. Bombsquad has gone on sale in the past, I'd imagine demand went up with the decrease in price too. People sitting on the fence at $5 would be tempted at $2.50 (or whatever it was)

Now what would happen if Eric increased the price of Bombsquad to $10? You would imagine demand would go down, as people might consider other ways of spending the $10.

Bombsquad is a pretty fleshed out game, If Eric decided that he wanted to charge $15 who would be able to say it wasnt worth that? But he chose to release it for $5 to keep the demand high. Possible he feels he can sell 3 times or more copies at $5 than he can at $15.

Now what happens if I am a pass user? My demand for goods is completely unaffected by its price (once its below $30). Eric could raise the price to $29.99 or drop it to $0.50 and it would not impact my demand for the game whatsoever.

So what does mean? If there are enough pass users, when it comes time to set the price of Bombsquad 2 why would Eric make it $5 over $15? Demand isn't going to be affected by price so why not go for the upper limit?

So all the pass users don't care as they are still getting the game for their subscription fee. So when it comes to setting the price of games developers are going to go for the upper range of what the game is worth. This will push the average price of games on the Ouya up.

Currently $60 would buy you most games you want to play on the Ouya, but I can see it in the future that it will soon only be able to buy you 6 average games. Which has no impact on pass users, but has a large impact on me (who doesn't plant currently to buy a pass)

I don't think the economics work quite that way, and even if they did, I don't think the effects you're describing are negative for the actual game customer. Presumably they want the industry to thrive to continue enjoying games.

Games may get slightly more expensive, but then, what is wrong with a game being priced at what it's worth and encouraging good developers to create more good games, rather than pandering to the "race to the bottom"? This is a universal problem that even the big brother consoles are having to contend with thanks to the mobile market. And if they have to cave into it too, that will be the beginning of the end for a lot of quality game development studios.

The race to the bottom has trained consumers to devalue games, and that will ultimately be detrimental to everything they enjoy. It WILL lead to a crash at some point, or at the very least, all games will race to the bottom in quality as well. It's arguably already started to happen.

Sure, more accurate prices will upset some customers. But these are the same customers that fail to realize that the amount of effort a developer is willing to put into a product, both in terms of up-front production values and on-going support, is directly proportional to how much they make on their efforts. If anything, it will help to build value to the game, and inversely make the subscription rate more attractive if more games are priced at what they're worth rather than priced to move units. It disrupts other app stores who care less about developers making a living more than how it feeds their other core businesses.

I know this still seems pro-developer, but without the developers, there is no industry.

Customers have and will always be there. The previous home game industry crash and rise of the Commodore 64 and similar home computing devices used more for gaming than productivity through that period proved that. And customers at one point had to pay for what the games were actually worth. Subscription is a good compromise for those that don't want to do that or resort to a "rental" kind of option. Because these customers have always existed too. A startling number of people out there don't actually care to own games. And games who price themselves out will always price themselves out. Nothing magically makes people pay for things they can't afford or don't want to buy at a particular price point. If moving units is important to a developer, they can set their price lower as they always have.

The customers that do understand the economics or get re-trained to know the actual worth will buy the games they want, and possibly subscribe to play the games they might want to play, but not necessarily own.

For the industry to survive, there has to be a point of sustainability achieved somewhere. The current race to the bottom is only good for the consumers until all the good developers leave the arena to make a living elsewhere. Beyond that, it will lead to either a collapse that affects all but a remaining few (and then they can run things and price things any way they want) or stagnation. A reasonably priced subscription is a good compromise to the customers that don't want to pay a lot for games, and developers that want to make money if they have a quality product.

Besides that.. as broadband access becomes increasingly more accessible.. either via efforts like Google Fiber or cellular technologies like LTE get stronger, everything will eventually be streaming and subscription based anyway, assuming the industry can survive to that point.

As a Hobby Developer:

The more selfish thing that will impact me about the pass is I think free games are going to get a kicking. If you paid to get into a sweet(candy) shop and you could have whatever you wanted from inside, you would try the most expensive stuff first and might start to feel sick before you get to the cheaper ones.

Free games are the cheap sweets, people will straight away will try and "buy" the most expensive games. The "Snob Effect" could come into play with games as people try to get value out of their pass, so games could even see an increase in demand as they raise prices

I released Soc-car for free because i wanted demand to be high. I would much prefer 1000 people to play it that 10 people to buy it. But I feel if the pass takes off demand for Soc-car is going to be massively lowered. And my next game will definitely have paid elements, which funnily enough feeds into my points about being bad for me as a consumers

Or another way to look at it is... it levels the field of visibility and elevates the expectations.

Not everyone is a hobby developer. In fact, what ultimately keeps OUYA alive is going to be the non-hobby developers. Think about that for a second. If you're a hobby developer, you gave OUYA $99 in exchange for them to evaluate (payroll spent), evaluate updates (more payroll spent) and host (ongoing AWS storage fees spent) your game. It won't bring to them any income beyond the marginal revenue that comes from those that buy an OUYA to play free games. And as OUYA Everywhere moves into production, even the revenue for the hardware begins to go away. By the time you get through a couple updates or submitted games, you've more or less exhausted whatever OUYA made on you.

That aside, why shouldn't you make some money in a place designed for commerce? Even if it's beer money. If you are completely against making any money, but feel you have to charge to get noticed, you can always donate what you make to charity. Advertising that would likely encourage people to play too. There's always a way to think outside the box here.

If the "Snob Effect" were in play on OUYA to it's detriment, then it would have no users at all. It clearly lacks the strongest hardware and market penetration of any of the other devices out there, including Android phones and iOS devices. I think for the most part, OUYA's primary customer is an audience member who views price as more of an obstacle than a status symbol. Most just want to play a game you can't get anywhere else, and many don't care if they are still playing it a year from now. They're willing to look the other way if the visuals aren't 100% in line with their big brother console counter parts. Snobbery just doesn't mesh with the personality for most people who want to enjoy games that way.

And if it does, I'm not sure that's a huge problem either. OUYA, and mobile gaming in general could use customers who are willing to pay for a game that's valued appropriately. That will ultimately attract more quality products and developers to the platform, which is good for everyone.



Many people, developers and customers are hung up on black and white/polarizing views. Both models can co-exist. There will always be options and other stores that don't do subscription, and may even price their items lower. Users can go there if they don't agree with the economics.
But at worst, your described scenario causes the games industry financials to self correct and become more sustainable. At best, gamers get to play games, and developers get to make money and everyone is happy about it because the risk for both sides evens out. That's good for customers and developers alike in the long run, even if they struggle with the changes in the short term.