Mike Rose: developers should price games higher

The man at the helm of No More Robots, Mike Rose, shared his estimates of Steam sales data.

Here’s what he says about obtaining the stats: “All calculations are based on publicly available stats, including Steam group numbers, store page review numbers, prices, algorithms for calculating year one revenue from month one revenue, and more.”

The developer looked at roughly 900 games released on Steam between July 5 – August 6, 2019. Around 700 titles he ignored as they had fewer than ten user reviews (these games can only hope to gross $5,000 in their first year). AAA games were also not considered.

The remaining games Rose ranked by revenue and removed the top and bottom 5% as outliers.

He ended with 170 games and here’s what he found:

• in the first year on sale, the average 2019 price is $10, versus $12 in 2018;
• in 2019, the average game sells 1,500 copies, versus 5,000 copies a year ago, that’s down 70% from 2018;
• in 2019, the average game generates $16,000 in revenue versus $30,000 a year ago. That’s a 47% decline.

Why does it happen?

A number of factors can contribute to the situation. Developers are pricing their games too low. More players get into free-to-play titles like various battle royales. Plus, the number of games coming out is still growing month by month. Lastly, there are subscriptions that can be driving gamers away from individual purchases.

Is there a silver lining?

The good news, according to Rose, is that developers can actually stimulate sales if they sell their games at higher prices.

There are clear patterns linking the performance of a game to its price.

• Games priced $10 or less sell 1,000 copies and bring in $6,000 in revenue.
• Games priced $11-15 sell 2,000 copies and bring in $35,000 in revenue.
• Games priced $16-20 sell 2,500 copies and bring in $55,000 in revenue.
• Games priced $21+ sell 5,000 copies and bring in $200,000 in revenue.

So how can developers turn the tide?

Obviously, pricing your games adequately will help. “Going for a lower price does not increase sales. Your game is worth more than you believe,” Rose says.

Figuring out your audience and putting together a marketing plan is essential.

Finally, building a community will go a long way in boosting your sales on Steam.