Pay What You Want (But Please Pay Something!)

DriveThruRPG has the option to offer products for no set fee, but rather Pay What You Want (PWYW), in which customers pay whatever they think is appropriate for the product. The concept isn't new; PWYW has been around since performers have busked on street corners. But when it comes to role-playing games, certain PYWY strategies work better than others.

Picture courtesy Ron Mader.​

When PWYW Fails​

PWYW seems like a supremely confident strategy in one's product; if it's worth something, someone will feel obligated to pay for it. That's not quite true, as restaurants have found out. Vegetarian restaurant chain Lentil as Anything took a $4,000 hit in one day after customers took advantage of its PWYW pricing strategy. Likewise, a new restaurant in Guiyang China decided to try out PWYW...and lost $15,000 in the experiment. Another restaurant in China lost over $37,000 using the same strategy.

It's easy to look at these failures and assume PWYW is not a viable strategy. But in certain cases and certain circumstances it can work.

Then There's Radiohead​

PWYW rocketed into the spotlight when when Radiohead released their seventh album, In Rainbows, through the band's website as a digital download using a PWYW system. The band was between labels, so the PWYW strategy was as much a reaction to market forces as it was a marketing tactic. And the results were undeniable:

The Pay What You Want strategy (PWYW) was a good decision for Radiohead because it cut out the middle man and increased its profit margin. With traditional sales tactics, Radiohead would have only earned 15% of total sales (or around $2.24/album). By cutting out the middle man, it's profit margin has dramatically increased as the average album sold (accounting for fans who downloaded it for free) $2..25 which shows a slightly better margina on a per album basis. Assuming high sales volume, Radiohead's profit was even better than traditional sales tactics due to the popularity of the concept.

Since most role-playing game designers are not Radiohead, it's worth looking at another major publisher who has used PWYW successfully.

A Tip of the Hat​

Fred Hicks of Evil Hat Productions explained how the PWYW strategy worked for his company:

For Fate, we’ve been building an audience for a decade. Our fans are pretty damned dedicated, and the audience has grown to a very respectable size. The Fate Core Kickstarter is one way we’ve managed to tap into that. Our PWYW release of Fate Core and Fate Accelerated is another way. Over on DriveThruRPG, Core and FAE both went up on the 5th of this month. We’re 5 days later and we’ve grossed $2000 between the two of them (before DriveThru’s cut). Core itself has seen just shy of 300 paying customers, averaging a little more than $5 per purchase. These are folks paying $5 because they want to, not because they have to. Pretty incredible, and definitely something we’ll use to improve the Fate Core line.

I've released products using the PWYW strategy and they have not nearly been as successful. The one key element to all of the previous examples is that well-known brands benefit from the good will they generate. Start up game designers do not have that good will to begin with.

So When Does PWYW Make Sense?​

There are some circumstances where PWYW works. As mentioned above, a previous relationship with the customer is critical -- new customers have no emotional attachment or commitment to pay. But conversely, there's something to be said for giving away something without giving it away for free. This creates the illusion of value. As Fred puts it:

You do this because you want more folks, even the folks who couldn’t or wouldn’t normally afford the item at the price you’d set for it, to acquire your work, engage with it, become aware of it. That “better chance of a payment” side-effect can pay dividends to this goal, of course: if folks are paying even a little for a “free” item, there’s a greater incentive to regard the item as having value, which can increase engagement. Engagement drives to the heart of the marketing strategy, of course, so that’s a positive feedback loop in the mix.

This strategy also works when you're trying to sell excess or fill capacity -- a tactic that works for hotels and airlines but not digital products. Because digital products don't usually expire, they stay "on the shelf" theoretically forever and thus aren't nearly as relevant to PWYW.

But there is a strategy that definitely works for PWYW, and that's giving to charity:

In a 2010 paper in Science, a team of researchers led by Ayelet Gneezy conducted a field experiment selling souvenir photos after a roller-coaster ride using PWYW. Some customers were told half the money collected would go to charity, others were told nothing. Without the charity explanation, customers only paid $.92 for their picture. In the charity condition, however, people paid $5.33. For context, the normal price was $12.95.

One of the better known models of this version of PWYW that has been applied to tabletop RPGs is the Humble Bundle:

Humble Bundle, Inc. is a digital storefront for video games, which grew out of its original offering of Humble Bundles, collections of games sold at a price determined by the purchaser and with a portion of the price going towards charity and the rest split between the game developers. Humble Bundle continues to offer these limited-time bundles, but have expanded to include a greater and more persistent storefront. The Humble Bundle concept was initially run by Wolfire Games in 2010, but by its second bundle, the Humble Bundle company was spun out to manage the promotion, payments, and distribution of the bundles. In October 2017, the company was acquired by Ziff Davis through its IGN Entertainment subsidiary, though operates as a separate subsidiary.

So can the Pay What You Want work for you? Maybe, if you're a well-known game designer, you're giving the funds to charity, or you want to gain more visibility for your product without making a profit on each sale. But for those designers who can't afford to depend on the charity of strangers, a set price might make more sense.

 

[RolemasterBlog]

Evil Hat have quite a wide range of PWYW titles. I was also really surprised to see that they in the $000s of dollars. That is the power of brand recognition in action.