New World's Cash Shop: A Case for Price Adjustment

[GROMMI]

New World's Cash Shop: A Case for Price Adjustment

A Quick Preface

Let me preface by saying that I think New World A. has been a tremendous success. I'm enjoying it, and I even got my wife to enjoy it and play with me! The game content itself has been a lot of fun and, in my opinion, a good success. I hope this maintains.

I have a fear that I suspect not everyone will agree with: I think the monetization, or profit revenue, is not done correctly. And I think that this will lead to an eventual problem in content development or sustainability.

---

The Current Situation

My main issue here is that the digital content in the shop is not appealing enough for the majority of players. And I would argue this is largely because of the current pricing layout.

The cash shop currently prices most items around the $20 mark. And it feels like a large portion of the game is paywall locked for no really good reason other than 'steer the player to the shop for visibility'.

Why Current Pricing May Be Problematic

1. Target Demographic Mismatch

• Unlike mobile games that can rely on "whales" for sustainability, MMOs like New World need broad player base support
  
• The general playerbase is unlikely to make frequent $20 purchases for cosmetic items
  
• While players might make occasional purchases, this isn't sustainable for consistent revenue

2. Digital Products vs. Physical Goods
These items are a digital product. What does this mean? It means it is a genius method of monetization that has little to no production cost post creation. It takes almost nothing to simply copy the assets of a skin someone purchases. Unlike, for example, a physical product where material costs are always a factor. A $20 outfit is nearly always $20 in profit, unless there is some strange behind the scenes witchery going on.

• Digital items have minimal reproduction costs once created
  
• Each $20 sale is nearly pure profit
  
• Lower prices could drive higher sales volume, potentially increasing overall revenue
  
• Example: A $10 item that sells to 1000 players generates more revenue than a $20 item that sells to 400 players

3. Personal Perspective as a Willing Spender
I'd argue I'm likely their target demographic, as I spend an eye-watering amount on digital skins in games like League, even for things that are pretty useless, like Eternals (lol). Despite being comfortable with digital purchases, New World's prices feel difficult to justify. The value proposition doesn't align with the cost for items like:

• Transmog tokens
  
• Emotes
  
• Housing decor
  
• Company crests
  
• Mounts, even. Why are the majority of customizations behind a pricy Paywall?

---

Proposed Solution

1. Implement tiered pricing:
I would handily argue that a lower price, encouraging more sales, will net more profit over a higher price with less sales. And some items can and should be higher prices, as they gain merit on exclusivity; however, I don't think the majority of these items fall into this category.

• Keep select premium items at higher price points for exclusivity
  
• Reduce prices for basic cosmetics and convenience items
  
• Create more entry-level purchase options

2. Benefits of this approach:

• Encourages more frequent purchases
  
• Encourages players to purchase repeatedly more frequently, as opposed to one-off dips
  
• Makes the shop accessible to a broader player base
  
• Maintains exclusivity where appropriate
  
• Potentially increases overall revenue through higher sales volume

The Takeaway

This isn't a criticism of monetization itself - games need revenue to sustain development. However, the current pricing strategy may be limiting rather than maximizing the game's potential income. For New World to maintain a healthy development cycle and continue producing quality content, it needs a monetization strategy that resonates with its player base.

I believe adjusting the cash shop prices would, in summary:

1. Encourage more players to make purchases, as well as repeat purchases
   
2. Create a more sustainable revenue stream
   
3. Support long-term game development

If the current model proves successful, I'll gladly admit being wrong. However, I think it is reasonable to argue that more accessible pricing models often lead to better long-term success, especially for MMOs that rely on a healthy and engaged player base.

EDIT: Tried to make readability easier, fixed formatting issues, and also say: They could also just increase the amount of tokens we get per purchase and retroactively apply this to past purchases, too. This could work.

[Brahson]

Dear GROMMI,

I've read your memo and while it certainly is a way to go we would need some facts and figures to go along with it. So could you please reply with what pricing models you have used and what the projected change on EBIT will be, with a scenario analysis? Thanks!

PS your arse is not a viable model

[Rhazes]

As someone who has wasted $400-600 a month on mobile games in last 2 years I can tell you that the prices in the store for me at least has nothing to do with why I have zero interest in the store in New world.

If new world had a character creator like Throne and Liberty or BDO I would have already dumped $200+ in it. I accept the game for what it is Amazon got a ton of DEI money and used it to make a game according to what ever stipulations that money came with. I hope that the DEI money came with some kind of term agreement and as soon as it ends Amazon adds character faces and armor skins worth having in screenshots. As soon as that happens 90% of DEI trolling/ranting/conversations in chat go away.

I'd pay $20-50 to purchase first person view and lock from the store.

If you have bought a meal at any restaurant this week than you paid the same price as most in game store purchases in games. A home made bowl of rice with real butter is like 23 cents even with our currency being devalued. You can literally add anything to rice to improve it. Eat rice for a week to afford several purchases.

[Grimwit]

Originally posted by GROMMI:

New World's Cash Shop: A Case for Price Adjustment

The cash shop currently prices most items around the $20 mark. And it feels like a large portion of the game is paywall locked for no really good reason other than 'steer the player to the shop for visibility'.

There is nothing "paywall locked" in the cash shop. the cash shop is totally optional for players to buy cosmetics or not, You don't need anything in the shop to enjoy/play NWA at all.
If once in a while I look in the shop and see a cosmetic I like, I will buy it, I will help support the game. Now If there were a bunch of cheap $$ cosmetics I don't like in the shop, I'm still not gonna buy them, no matter how cheap they are, that's $$ wasted to me.

[ZeroGiven]

Garbage in/garbage out. Your whole thesis is based on false premises.

[Bordric]

Derp

[Bordric]

Revenue doesn't equal profit. People get this wrong all the time.

"Example: A $10 item that sells to 1000 players generates more revenue than a $20 item that sells to 400 players"

If the item cost 6 dollars to create and sell then 400 players is way more profit than your thousand.
1000x$4 = $4000
400x$14 = $5600

You should pick up some new hobby besides this one.

[ZeroGiven]

Wait, they make each cash shop item bespoke? Why wouldn't they just make it once and sale the same thing to everyone?

Originally posted by Bordric:

Revenue doesn't equal profit. People get this wrong all the time.

"Example: A $10 item that sells to 1000 players generates more revenue than a $20 item that sells to 400 players"

If the item cost 6 dollars to create and sell then 400 players is way more profit than your thousand.
1000x$4 = $4000
400x$14 = $5600

You should pick up some new hobby besides this one.

[Xaade]

Originally posted by Bordric:

Revenue doesn't equal profit. People get this wrong all the time.

"Example: A $10 item that sells to 1000 players generates more revenue than a $20 item that sells to 400 players"

If the item cost 6 dollars to create and sell then 400 players is way more profit than your thousand.
1000x$4 = $4000
400x$14 = $5600

You should pick up some new hobby besides this one.

As a developer, I can also add that it really is impossible to determine exactly what it cost to make. Devs fudge time estimates all the time.

And then, it won't actually cost $6 flat per sale. It would be a fixed amount.

Say it cost $400 because it took almost 10 hours. Then it takes about $1 per sale for maintenance.

1000x$9 - $400 = $8,600
400x$19 - $400 = $7,200

So, obviously they don't expect 1000 sales to happen, they expect at most 844 sales, and they're ok selling only 400 copies.

[Bordric]

Originally posted by Xaade:

Originally posted by Bordric:

Revenue doesn't equal profit. People get this wrong all the time.

"Example: A $10 item that sells to 1000 players generates more revenue than a $20 item that sells to 400 players"

If the item cost 6 dollars to create and sell then 400 players is way more profit than your thousand.
1000x$4 = $4000
400x$14 = $5600

You should pick up some new hobby besides this one.

As a developer, I can also add that it really is impossible to determine exactly what it cost to make. Devs fudge time estimates all the time.

And then, it won't actually cost $6 flat per sale. It would be a fixed amount.

Say it cost $400 because it took almost 10 hours. Then it takes about $1 per sale for maintenance.

1000x$9 - $400 = $8,600
400x$19 - $400 = $7,200

So, obviously they don't expect 1000 sales to happen, they expect at most 844 sales, and they're ok selling only 400 copies.

Its not just games, people make the comparison on all kinds of products. Especially since we don't ever really know the overhead cost as outsiders its not a good point. It could be a dollar or 9 dollars just never know.

[GROMMI]

Originally posted by Xaade:

As a developer, I can also add that it really is impossible to determine exactly what it cost to make. Devs fudge time estimates all the time.

And then, it won't actually cost $6 flat per sale. It would be a fixed amount.

Say it cost $400 because it took almost 10 hours. Then it takes about $1 per sale for maintenance.

1000x$9 - $400 = $8,600
400x$19 - $400 = $7,200

So, obviously they don't expect 1000 sales to happen, they expect at most 844 sales, and they're ok selling only 400 copies.

This is actually a really cool perspective. I'd like to get more of your thoughts on this. I guess my question is why don't we expect to sell more at a more affordable price? I feel like a larger pricepoint prices out the market, and we end up with a much smaller amount of possible sales. As you mentioned, they're okay selling only 400 copies at a much higher pricepoint as it comes close, but is it unreasonable to expect a larger number of sales if it becomes more affordable?

I thought about buying the battle pass for example, as I always buy them in League. But the pricepoint is $20, higher than my average $15. This rubs me the wrong way, and I'm not sure I want to support that as it feels like it is inflating. Certainly others will, but are we not worried that we're losing sales by this digital price inflation? Just curious your thoughts on this as a developer.

[GROMMI]

Originally posted by Bordric:

Revenue doesn't equal profit. People get this wrong all the time.

"Example: A $10 item that sells to 1000 players generates more revenue than a $20 item that sells to 400 players"

If the item cost 6 dollars to create and sell then 400 players is way more profit than your thousand.
1000x$4 = $4000
400x$14 = $5600

You should pick up some new hobby besides this one.

I thought about not addressing this reply because of the snarkiness, but I think you bring up a valid point. My problem with this is that I'm not sure it's entirely feasible. Maybe you could educate me?

In my eyes, this is a digital product that has a single expense. Correct me at any point if I am wrong here.

The expense is the design, labor, and efforts that go into producing this product for the first time. Once this expense is done and the product is complete, my understanding is that the product becomes a digital, 'downloadable' product. Let's imagine a mount for ease of understanding. They create the new mount. It looks great. They animate it, add those high quality sounds, and it took quite a big investment. Great, it is now in the shop. They do not need to recreate the labor of animation, procuring sounds, or any product costs (such as buying eggs and flour to make a cake), they simply place it in the shop and every purchase henceforth is purely profitable.

Let's say in the most egregious scenario, they licensed an asset and every sale of that asset takes a 30% cut. Then Steam takes a cut of 30%. Even then, if they sold it for $10, would they not make $4 of pure profit?

If so, then why is this so contentious? My argument at its core is that New World deserves to be profitable, and I think that profitability for an MMO comes from a wider, more engaged purchasing audience. I think that purchasing audience is missed when we raise prices too high, especially considering these prices are for digital content (after a $60 box fee as well).

[ZeroGiven]

Originally posted by GROMMI:

Originally posted by Xaade:

As a developer, I can also add that it really is impossible to determine exactly what it cost to make. Devs fudge time estimates all the time.

And then, it won't actually cost $6 flat per sale. It would be a fixed amount.

Say it cost $400 because it took almost 10 hours. Then it takes about $1 per sale for maintenance.

1000x$9 - $400 = $8,600
400x$19 - $400 = $7,200

So, obviously they don't expect 1000 sales to happen, they expect at most 844 sales, and they're ok selling only 400 copies.

This is actually a really cool perspective. I'd like to get more of your thoughts on this. I guess my question is why don't we expect to sell more at a more affordable price? I feel like a larger pricepoint prices out the market, and we end up with a much smaller amount of possible sales. As you mentioned, they're okay selling only 400 copies at a much higher pricepoint as it comes close, but is it unreasonable to expect a larger number of sales if it becomes more affordable?

I thought about buying the battle pass for example, as I always buy them in League. But the pricepoint is $20, higher than my average $15. This rubs me the wrong way, and I'm not sure I want to support that as it feels like it is inflating. Certainly others will, but are we not worried that we're losing sales by this digital price inflation? Just curious your thoughts on this as a developer.

Taking the battle pass as an example with numbers pulled out of the air.

If they sell 1000 BPs @ $20, lowering the price to $15 would cost them $5000 in revenue. They would have to sell 334 more BP @ $15 to make up the difference. They might lose sales @ $20 but they aren't losing revenue.

If there is one thing Amazon is good at it is maximizing revenue.

[Bordric]

Originally posted by GROMMI:

Originally posted by Bordric:

Revenue doesn't equal profit. People get this wrong all the time.

"Example: A $10 item that sells to 1000 players generates more revenue than a $20 item that sells to 400 players"

If the item cost 6 dollars to create and sell then 400 players is way more profit than your thousand.
1000x$4 = $4000
400x$14 = $5600

You should pick up some new hobby besides this one.

I thought about not addressing this reply because of the snarkiness, but I think you bring up a valid point. My problem with this is that I'm not sure it's entirely feasible. Maybe you could educate me?

In my eyes, this is a digital product that has a single expense. Correct me at any point if I am wrong here.

The expense is the design, labor, and efforts that go into producing this product for the first time. Once this expense is done and the product is complete, my understanding is that the product becomes a digital, 'downloadable' product. Let's imagine a mount for ease of understanding. They create the new mount. It looks great. They animate it, add those high quality sounds, and it took quite a big investment. Great, it is now in the shop. They do not need to recreate the labor of animation, procuring sounds, or any product costs (such as buying eggs and flour to make a cake), they simply place it in the shop and every purchase henceforth is purely profitable.

Let's say in the most egregious scenario, they licensed an asset and every sale of that asset takes a 30% cut. Then Steam takes a cut of 30%. Even then, if they sold it for $10, would they not make $4 of pure profit?

If so, then why is this so contentious? My argument at its core is that New World deserves to be profitable, and I think that profitability for an MMO comes from a wider, more engaged purchasing audience. I think that purchasing audience is missed when we raise prices too high, especially considering these prices are for digital content (after a $60 box fee as well).

I didn't need you to respond to it, I was pointing out your false information. You don't understand the basics so continue on with your walls of text that mean nothing. Didn't read past first sentence.