Pidonomics

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I know there have been blog posts out there discussing the economics of RMT in games, but I am trying to wrap my head around the idea of how a company can determine what the sweet spot is for pricing in these cash shops. Your typical macroeconomics that you learned in high school tells you that the price is ultimately determined by the intersection of the supply and demand curves.

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In a virtual market though essentially what we typically think of as supply is now practically unlimited. How many heal potions are there? Answer: as many as we need. In this scenario supply is unlimited and the supply curve becomes a vertical line.

As the quantity is fixed at “unlimited” demand essentially governs the entire equation. For instance the demand for hair dye in a game like DDO is relatively low, so you can get the dye rather cheaply. On the other hand, potions of experience in a game like Everquest is rather high, so the price gets jacked up. In a big enough pool there will always be a few people who will pay as much as the seller asks and some that refuse to buy it at all, but the average bloke has a price point that more than likely falls in some kind of bell curve distribution.

None of this comes as a big surprise to me, but what I am curious about is how companies will determine what they can get away with. A hyped, polished game like Allods tried to push the envelope and caught some serious flack for it. Was it a ploy gone wrong or just a major miscalculation? I’m sure some people ponied up the cash for the high priced items, but is this really where gPotato thought the sweet spot was or were they thinking if they shocked the community with sick prices and then came back and lowered the prices a bit it would sell more? I really don’t know. In any event it should be interesting to see how these types of things pan out. For my part I am happy to pay my $15 a month and once in a blue moon drop a couple of bucks for that pink hair in a F2P game.

-Pid

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