bylam
Funcom
- Joined
- Oct 30, 2006
- Messages
- 707
Customers have an acquisition cost.
If you pay one of the big companies like Facebook or Google for advertising, you are literally spending money to acquire customers. You aren't selling a game for $60, you are selling it for $60 minus whatever the average cost of acquiring a customer is. Typically the further you move from launch, the higher the cost of acquiring a customer.
Now look at Vogel. Perhaps every 1000th person who plays his games becomes a loyal fan. That means that they always buy his new releases at full price. Perhaps their average spend on his games is $100.
It makes sense for him to heavily discount a $20 game to cast the widest possible net to drag in more loyal fans. His cost for acquisition of customers is 0 - he actually makes money from all those people who spend a few $ to find out whether they like his games or not. But the loyal fans he acquires through this process - people who will spend money on his games - are the whole point. Not the "lost" revenue, which can't really be quantified.
If you pay one of the big companies like Facebook or Google for advertising, you are literally spending money to acquire customers. You aren't selling a game for $60, you are selling it for $60 minus whatever the average cost of acquiring a customer is. Typically the further you move from launch, the higher the cost of acquiring a customer.
Now look at Vogel. Perhaps every 1000th person who plays his games becomes a loyal fan. That means that they always buy his new releases at full price. Perhaps their average spend on his games is $100.
It makes sense for him to heavily discount a $20 game to cast the widest possible net to drag in more loyal fans. His cost for acquisition of customers is 0 - he actually makes money from all those people who spend a few $ to find out whether they like his games or not. But the loyal fans he acquires through this process - people who will spend money on his games - are the whole point. Not the "lost" revenue, which can't really be quantified.