Gears of Glory: Apex Ace Pricing

It’s time to discuss pricing for Gears of Glory: Apex Ace.

Originally, I wanted to price the game around the cost of an espresso; about £1.50. The game is small, but there is a certain replayability aspect if you enjoy racing, so I think £1.50 is perfectly reasonable, albeit cheap for a PC release.

I’ve had to increase this to £2.40, for various reasons.

Reason 1) VAT. Before I state the following, please remember I Am Not An Accountant.

UPDATE

Well, I did say I was not an accountant. The next point on VAT is completely false. For digital goods, you only need to register + charge VAT in your own state if you go above the national threshold, which I don’t think I’ll be doing. So, VAT is now no longer an issue. I’ll post a new update in time! – Colin

Domipheus Labs is based in the UK. I am not registered in the UK for VAT. I do not expect income from games/services Domipheus Labs provide to go above the VAT registration threshold, so technically I do not need to charge VAT in sales to the UK – currently 20%. However, the EU Vat rules for digital goods are complicated. Basically, VAT is charged at the customer rate rather than the supplier rate. This means I would need to have in place the ability to charge and send VAT to the EU depending on location of the person buying the game. This is just far too much work for a 1-man band, so I am using a payment processor that handles this for me. But this then means I need to charge UK VAT, as it’s the payment processor who is actually selling the product, not me. Technically I can sell minus VAT only to UK buyers, via something like PayPal. I may do this in the future, but for now, it’s just too much work. I want the price quoted to be the price customers pay, so the VAT is absorbed into the higher sale price.

Reason 2) There are no good micro-transaction payment portals.

By good, I mean will handle everything I need – the above collecting of VAT for the EU, notifying my servers of a sale for licence key allocation, and, most importantly, doing this at a reasonably percentage cost of the transaction total. As it turns out, £1.50 is most definitely micro-micro transaction level – and there is just nothing good out there that will charge anything less than a third for the service.

The above two issues are expensive. Not expensive in terms of monetary value, it’s less than a pound we are talking, but as a percentage of our ‘micro transaction’ payment it’s massive. The payment processor I am using is FastSpring, and this cost will be around 50p per transaction. Now, FastSprings service has been amazing, so for 50p, to me, it seems worth it from my end. But it’s still more than I had envisaged. That brings the cost up somewhat, and then we have 20% VAT on top, bringing it much closer to the £2.40 mark.

If you think I am somehow greedy in this, consider that from that £2.40, after various taxes, monetary transfer fees and other things, I’ll be getting less than 50p per sale. From that, I need to pay expenses, rent the servers, and pay for bandwidth. When I say I’m not doing this to make a heap of money, well, this confirms it.

What I’m doing to offset the fees, for buyers.

I am a massive fan of the ‘4 pack’ buys you get from Steam, etc. I have teamed up with friends and bought for example Left 4 Dead and distributed the keys. I have decided to make pricing tiers available for Gears of Glory: Apex Ace, but I’ve been more lenient, and extended it to a volume licencing model.

Quantity: 1, each licence costs

  • USD 3.50
  • EUR 3.05
  • GBP 2.40

Quantity: 2+ , each licence costs

  • USD 3.20
  • EUR 2.85
  • GBP 2.10

Quantity: 4+ , each licence costs

  • USD 2.85
  • EUR 2.45
  • GBP 1.80

This represents a 25% saving on buying 4 or more keys at the same time, instead of four single ones. But, even buying only two will entitle you to over 10% of a discount. I am still looking over the figures, and may be able to increase the saving even more, so will update if this is the case.

Now, this doesn’t solve my VAT problem, which is why the price is still a bit higher than I wanted, but it certainly offsets the payment processor fees, and I hope it will make people buy keys in groups, or maybe even gift a second key to a friend.

I hope this explains some things.

Lastly, you will be able to purchase keys very soon – and the Single Player beta, with 24 circuits, leaderboards and achievements, is being released mid-September!

The beta will initially roll out ‘Direct from the Developer’, and be available on game distribution platforms like IndieCity and Desura in due course.

A demo is also being made available, which allows 1 day access to the first two tiers of circuits.

It’s certainly been difficult trying to sort these matters out, but hopefully the volume discounts will entice gifting of Gears of Glory: Apex Ace to more friends – that’s the idea, anyway.

Cheers,

Colin / @Domipheus

 

3 thoughts on “Gears of Glory: Apex Ace Pricing

  1. Cheers for the comment Kraig 🙂 The idea was that when it came out of ‘Beta’ with full in-game editor, user-generated circuit shopfront (without IAP), and MP with two modes, I’d up the price slightly (did have £3 in mind). But for the game to work, it really needs active leaderboards – so I don’t want to endanger that by charging too much too early.

  2. I don’t think 60p is necessarily a deciding factor on whether a game is bought or not. I’m more inclined to buy stuff that price things honestly, or do an honest discount, rather than worry about the pennies. It’s noted a lot now that charging above the bare minimum actually makes products more attractive because they’re worth *something* – I remember Apple did an intervention on Papa Sangre because they were actually charging too low…

    Trust the Lean Methodology. Your first *beta* customers are already making/made up their minds whether to get your game or not. Your early adopters will understand why paying a lower earlier price that is higher than your minimum early price makes sense.