It is strange. Games have well defined pricing tiers that players and developers have worked out over time. $3 is generally considered somewhere between "trash you buy as a joke" and "a very short game without much in it". Does anyone know if there's any other markets that work like this? I can't think of any.

Games going on sale at launch also makes me assume its just because no one is buying it, but apparently more people buy games at launch if it says they're on sale. I don't get it.

Err... most things. Furniture for example.

When I was looking for a mattress recently, I wanted something affordable, but I shied away from really cheap options, because I was afraid they'd be very low quality. Similar reasoning could apply to many things.

Launch sales seem to be pretty standard on Steam, you can only set it up before the release and you can't change it afterwards AFAIK.

It is indeed. It turns out that the classical ‘supply and demand’ relationship only makes sense in fairly restricted settings. When it comes to consumer products like entertainment, it’s far more about psychology than rational value estimation and calculation.

If your product isn’t selling, (paradoxical though it may sound) raising the price can be a much better idea than lowering it and potentially both tarnishing your brand and making less profit at the same time.

And this is without even considering the notion of Veblen goods, which is an even more extreme example.

A lot of people who have never sold a digital product say stuff like this, but there's definitely a very obvious and gigantic market for low prices.

As somebody who has released several games and apps where some did well and others were crickets it seems like a combination of randomness/timing, visibility (related to the previous), and simply - is it good or not? If your game is amazing people will jump through hoops to try to play it. You can sell a great game for $40 or $60, and a very great game for $60 then $15/month to keep playing.

But you can't raise the price on a low-quality product and expect a great sales response. A lot of investor types say this out of hopes, or because they want that racehorse to run faster, but IME it's: Is it good? Charge market. Otherwise, free or freemium, you might even have to give away the code to get developer interest to help.

> But you can't raise the price on a low-quality product and expect a great sales response.

Well… obviously.

My point wasn’t that raising the price is always a good idea; it was that it sometimes is. It’s worth mentioning because even the idea that it’s sometimes sensible is surprising to many.

Of course there are good reasons to raise prices, but low or no sales is not one of them.

Well, you’re wrong. It’s been done before. It’s unconventional and perhaps rare, but it has been observed to work sometimes.

But I’m talking about products you’d buy regularly rather than one-time purchases like games or music.

I think if raising the price of your game increases demand, that’s a textbook Veblen good.

I’m not sure there is a formal definition, but it seems that Veblen came up with the idea because he was thinking about conspicuous consumption, which is slightly more specific.

It’s not that the high(er) price itself makes the product desirable — it just happens to help tell the right story about the product.