Hacker News Reader

Comment by numlocked | Hacker News Reader

Holy moly this is interesting. I have a bunch of reactions:

1. I always get wrapped around the axle on pricing discussions - will x offset y? How will different groups react? I'm not crazy! It is hard and the effects do sometimes totally offset. Radically changing your pricing may in fact have absolutely no effect whatsoever. Whoa!

2. I wish more companies would publish results like this and we didn't have to rely on the occasional (though terrific!) academic study. I'm sure Amazon runs experiments like this all the time.

3. I feel genuinely bad about the mobile game industry and how these "high value customers". Maybe I'm making a bad assumption but it seems unlikely these folks are the idle rich spending their spare thousands on gold bars.

4. There might be metrics in your business that are much harder to move than you would think. Local maximums that might be very hard to change.

Terrific, terrific study. Kudos to King for this, at least.

View on HN

> Maybe I'm making a bad assumption but it seems unlikely these folks are the idle rich spending their spare thousands on gold bars.

Having worked at a mobile games company: they actually are! We were heavily propped up by, among other things, Saudi oil tycoons trying to out-spend their (equally-rich) friends in cash-shop items, for the sake of being on the team with the highest power-level. We were effectively a virtual arms dealer selling to both sides of each little status-war between these folks. We considered them so important to our business-model that we took their likes and dislikes heavily into account in deciding which new games to make.

I work in AAA and I've heard (anecdotally) that there are people who 'buy the game'. That is, they buy every boxed edition on sale, every purchasable in-game item, every game guide, the t-shirt, every other piece of tie-in merchandise. They just buy the lot in one go, to the cost of $thousands.

This is very interesting, reminds me of the I'm rich app that used to sell at whatever the max app store price. If you could estimate, what percentage of revenue would be from these ultra rich?

Did you work for the Game of War guys? That's what it sounds like! :-)

Re #3: I have heard of data at three companies, and anecdotes at more, that their whales are mostly upper middle class players who play games instead of a more traditional hobby like e.g. golf. This was against my prior expectations -- I thought "probably Vegas slot demographic of pensioners and/or people w/ depression or similar" -- but despite being skeptical of company PR I have to admit there might be something there.

It matters -- if games just push the buttons of bored engineers/doctors/business owners well and they spend a few hundred bucks a month on them, well, I'll never buy a Hamilton ticket but I won't look down on anyone buying or selling them. If OTOH the entire social industry is exploitative and propped up by vulnerable people then that changes things.

A presentation to read if you're interested in this topic: http://www.slideshare.net/emily_greer/dont-call-them-whales-...

Oh man you should buy a Hamilton ticket though. It lives up to the hype.

Re. 1: Actually, there is an effect. There are even two effects: medium-value customers spend more, while high-value consumers spend less. Unfortunately for King, these two effects balance out in this specific case.

For other businesses, the gains from the revenue increase in some groups may trump the gains from the losses in other groups, or the other way around. Your mileage may vary.

Reply on news.ycombinator.com