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April 14th, 2009, 20:14
Originally Posted by Yeesh View Post
I find no fault with your analogy to offline retail, but we know that things are different enough in the online world that different rules can and do apply. Most importantly, can you really look at mega-e-tailers like Amazon and iTunes and say they are "no longer doing anything to get the game sold?" Like GG says, just being in those stores leads to sales in a way that being in an individual chain, even a national one, would not. I mean, maybe Walmart is analogous, but even that's stretching it, because Walmart doesn't provide an in for indies, and Amazon and iTunes do just that. In spades.
The things Amazon and iTunes do are comparable to BIG specialized retail chains with staff who knows their stuff. With the difference that they don't even have to pay all the costs related to physical product.
Big retailers have a big audience. Getting in front of such an audience often has a huge value. But this value is certainly different for different products, even more so in combination with a price cut. I've read about (a few) indies with increased earnings after the price cut enforced by the Amazon situation (-> positive value), but 've also read about (more) indies with significantly less income (-> negative value!).

Please not that indies were neither asked beforehand nor notified about the new lower price. Amazon bought Reflexive, integrated them into their shop and lowered the price. The only indies not harmed by this were the ones clever enough to negotiate a minimum price into their Reflexive contract.

In your own example, you cut out the publisher. True, these mega-e-tailers aren't acting like publishers, but then neither are the developers. We have a new model. There's no reason that pricing power which used to belong to publishers should shift to the devs rather than the e-tailers.
I think you've got the perspective wrong. There is no "shift" in pricing power. Our whole economy is built on the principle that somebody produces a product and puts a price on it. That's not unusual, it's the standard. Then the market is either willing to accept the price or not.
For an indie game this would mean that the dev wants a market price of 19.95$ ( = RRP). He agrees to give shop A a rebate of 30%, Amazon 70%, a smaller portal 60%. All on the RRP. Or he simply asks for n$ flat. It's effectively both the same after the negotiations are over. Then Amazon can, say, buy the game for 8$. For how much they sell it is their own business. If they sell for 0.99$ you still get your 8$.

As of today, everybody here could write a book, list it on Amazon, set the price and let Amzon handle all formalities. All they demand is finished product, 60% when something gets sold and certain storage costs. That's better than the deals the typical indie gets.

Amazon doesn't provide a damned thing that Spiderweb can't, for example, in terms of the game you download. So why should Spiderweb want to sell games on Amazon? Because Amazon DOES increase sales big-time.
See elsewhere in my posts. This is unproven and not undisputed. Plus selling through portals has other negative effects, for example no new customers for the indie (address data is not transfered!), lower price everywhere including the indie's own site (usually almost 100% margin), the customer expects a lower price ( -> he values the product lower). That's a very complex topic. I doubt there are general rules. Every indie has to decide this for himself.
It's only simple if you can say "every sold unit earns me x.xx$" or "The whole (special sales) project earns me 500k".

In return for this sales bump, Amazon demands price caps. If Spiderweb doesn't like it, they can keep selling games the way they have been, and lose all those potential sales. And complain about it. I'm only saying let's not pretend Amazon isn't bringing anything to the table; if they weren't, why bother having this conversation?
Of course they are bringing something to the table. It's just not clear to whose table.

@Indy game publishers, and anyone who can influence them:
This is so stupid. While I was typing this out, I figured out the answer. Just frigging cut your content up into sizes where (price cap) X (# of chunks) = (what you want the game to sell for), and this whole issue vanishes. Duh. Just make Geneforge 5 Chapter 1, 2, and 3. Tada!
A good idea. Many indies will do just that. But on the other hand, as Jeff correctly writes, the more specialzed your product the more money you should ask for. Jeff would need ca. 4 9.99$ units to compensate for 1 28$ unit, due to the fixed costs (transaction fees, etc.). Is this possibe? Only Jeff can answer this. Please remember the target is to maximize your earnings, not the amounts of units sold.
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