LOOT’s Portable Radios, and Why the Price is Fair
by NorseGamer, HSM Editor-in-Chief
There are times — there really are — when studying the Sony forum makes me feel a bit like Margaret Mead struggling to anthropologically understand a bizarre foreign culture. Insofar as I can tell, the prevailing sentiment from its more vocal members is an acute hypersensitivity to anything priced higher than one dollar — as if it is somehow immoral and detrimental to our virtual society for a developer to dare to try to make money.
And yet, at the same time, one glance at the monthly suggestion threads clearly indicates a near-insatiable appetite for more and more stuff. And not just basic, run-of-the-mill stuff, either: some of the requests are enormously complicated to achieve (if at all feasible with the Home Development Kit), requiring considerable timetables and costs to bring to fruition.
Off the top of my head, there are few demands repeated as long — or as loudly — as the ability to play music in personal estates and clubhouses. Granted, the ideal would be to stream music from your PS3 console itself, but everyone’s more or less accepted that that’s a legal impossibility. Still, the desire to have music playing in a personal estate — actual music, not that racket piped through your headset via the R2 button that sounds like Guns N’ Roses’ “Oh My God” fed through a blender — is a longstanding request with a lot of pent-up demand behind it.
So if there was any one virtual commodity that I felt could drive a premium price tag in Home…no, let me rephrase that: if there was any one virtual commodity that people would just instinctively realize was a good value, and be willing to pay a premium for, it would be the LOOT Radio.
You can thus imagine my surprise when LOOT announced its pricing for the radios — $9.99 for one, or $19.99 for a nine-piece bundle — and the forum reaction has largely been negative.
Waitaminnit. Time out. This is the only virtual commodity in Home which allows users to select from a ton of radio stations and play all sorts of fantastic music. This is to Home’s conventional music items (those boomboxes and the like) as television is to cave drawings. It has taken forever for something like this to become available in Home, it’s been in development for ages — seriously, I saw this in development at LOOT’s offices over a year ago, at which point they’d already been working on it for quite a while, and every core update causes all sorts of ripple-effect complications for products in development — and it’s a hot-button request for damn near everyone in the community.
So, um, why exactly are people screaming that a ten-dollar price tag is somehow inappropriate? Ten bucks to have, in perpetuity, the ability to play awesome music in any personal estate or clubhouse you own is, frankly, a deal.
Ah, but if you purchase it, goes the silly counter-argument, you are tacitly supporting ermahgerd price-gouging from evil developers, which will eventually cause the implosion of the community, the Mayan apocalypse, the sinking of the Lusitania, and the collision with Nibiru.
Oh. For. God’s. Sake.
Right, time for some economics. Social games like Home adhere to a fairly sharp consumer power-law distribution, meaning that most of the revenue is derived from a relatively small group of people (which, by the way, doesn’t correlate one-to-one with the denizens of that forum, much as they like to posture themselves as such). Once you cross the “Penny Gap” — once a consumer has made the conscious decision to spend money on something — it makes very little difference what the price itself actually is by comparison. And for any losses in number of transactions, the higher price point offsets it.
Think about it. If the radio was priced at, say, a dollar, then LOOT would have to sell ten times as many of them in order to reach the same revenue as selling one radio at ten dollars. And this is where behavioral economics starts to come into play: who’s most likely to actually buy this radio?
Generally speaking, the person who invests in this radio is an entertainer. A socialite. Someone who likes hosting parties, and who is usually motivated by a desire to portray a certain level of status, as host, to their peers. A higher price tag merely reinforces the exclusivity of the item; having a LOOT radio at your party is a status symbol — one which says that you care enough about hosting a quality event that you invested in having great music for it. Hence why the price is so much higher to have a nine-item bundle, so that you have exactly the right piece of furniture to match your meticulously decorated party pad.
The entertaining socialite, then, is the primary target psychographic. Going after more solitary users will net some results, yes, but there is far less motive to play music in an apartment if you’re the only one there — and if you are so motivated to play music, LOOT’s own Sunset Yacht is a bargain at half the price. Or you could just plug some earphones into your iPod. And they know this.
Social game economies like Home follow power law distributions. Adjust your thinking.
Now it gets interesting. Let’s assume the radio was priced at a dollar, and nine people happily purchased it. That doesn’t equal the same revenue stream as one radio sale priced at ten dollars, even if the other nine people decry it and say it’s not worth it. The lower the price, the wider you have to cast your net in hopes of selling to enough people. Since most social games — including Home — function predominantly as whale economies, the goal is to get as much money as possible from the people who want the item enough to buy it.
There’s a name for this. It’s called capitalism.
And here’s the beautiful part about it: don’t like the price? Then don’t buy the item.
All virtual commodities are luxury purchases. All of them. You choose which luxury experiences you want. For some, a Lockwood MechJet is worth ten bucks. For others, a Heavy Water castle is worth ten bucks. For a lot of people in Home, absolutely nothing is worth ten bucks (or even one dollar, if we go back to the Penny Gap). And, for some, LOOT Radios will be worth ten bucks.
(Here’s the other thing to remember, by the way: in sales, you can always start high and drop later to pick up residual sales. But if you open low, you have utterly nowhere to go. And you’ve left money on the table.)
If you want the item and you think the price sucks, then you have a value proposition: are you willing to endure the short-term economic pain for the long-term benefits? Can you, for instance, pass on two trips to Starbucks and use that money instead for this — if you want it badly enough?
Metaphor.
This isn’t 2008 or 2009, when Sony artificially price-controlled the rudiments of its virtual economy and went so far as to subsidize the cost of developing an Alternate Reality Game (Xi), because they had to give away the house in order to build up the user base. We’re weeks away from 2013, SCEA isn’t even on Home’s top-ten sales lists any more, and a whole ton of innovative and expensive commodities are being brought to market by third-party developers (who have to pay a cut of their top-line grosses to Sony, which creates inflationary pressure) in a fierce competition for your dollar. Stop clinging to some over-romanticized memory of a bygone Home experience that never truly existed, and embrace the fact that there are a whole lot of interested developers who would love to know what you’re willing to pay a premium for.
I get that none of us wants to pay more for something than we absolutely have to. But can we please declare a moratorium on this lunatic notion that commodities price inflation is going to unravel Home’s society as we know it? This isn’t some crime against humanity that’s worth of a Nuremberg trial, and frankly this knee-jerk hysteria is getting a little old. It’s the same refrain I heard three years ago when I discovered Home, and in that span of time Home’s user base has grown and Home itself has flourished with a wealth of fun gaming activities — and, yes, social enhancements — for everyone to enjoy.
The LOOT Radio is fairly priced for a luxury commodity with a lot of pent-up demand. And I intend to buy one. Hopefully you will, too.
December 5th, 2012 by NorseGamer | 16 comments
NorseGamer is the product manager for LOOT Entertainment at Sony Pictures, as well as the founder and publisher of HomeStation Magazine. Born and raised in Silicon Valley, he holds a B.A. in English/Creative Writing from San Francisco State University and presently lives in Los Angeles. All opinions expressed in HSM are solely his and do not necessarily reflect the views of Sony DADC.
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I will be in the store to buy one of these as soon as they open their doors, no question. As a club owner I feel like it is a must have for parties. and I though I love to DJ this will give me a break if I want to just have fun instead of wasting my index finger on the R2 button. I doubt I will invest in the bundle as I really have no need for all of them, but that Jukebox is a must have for me, I have been waiting anxiously for a long time for this to appear.
Great read as always Norse and also as always you make a heck of a lot of sense.
The naysayers on the forums seem to forget that developers have families to support too.
They changed the prices already. It is $14.99 to get the nine pieces, but it is also the only way to get the jukebox version. All of the one piece are $6.99 except for the reel to reel which is $8.99.
The new prices feel more fair to me. I’m not sure why $14.99 feels so much less than $19.99, but it does. And making the jukebox exclusive to the bundle is smart marketing — if I could have only one radio, that’s the one I would go for, with the reel-to-reel being my second choice. At this point, the bundle is the only obvious way to go.
MotherShip 16 is getting a jukebox tonight!
Oh, thanks forum people. You just cost me about $5 since all I wanted was the jukebox.
This story was rushed to print specifically because of the impending price changes, and it’s a fascinating lesson for the community to study.
At first glance, it appears the prices have been reduced. But in return, the most popular radio variant — the jukebox — is now only accessible via bundle.
Thus, as a result, the forum users are placated because they feel they were heard (which will drive up their engagement levels for a while), and LOOT still maintains a good chance of hitting the revenue targets that were budgeted into the pro forma, albeit via a different route. It’s an absolutely brilliant move on their part.
I love this virtual economy.
Perception of a fair price for anything is very, very subjective.
I’m currently fretting over needing to drop another $20 into the Casino, because my recent sessions have been extremely lossy. This despite the fact that it will be only my third $20 buy-in, the previous $20 netted almost two million chips total win, and $20 in a real casino lasts approximately thirty seconds.
I accept that, economically, I am an irrational animal. Watching my subjective reactions to price and value is one of the grand entertainments of Home.
I had no problem with the original price.
However I am upset and angry that unlike the LOOT Yacht TV/Radio the only one of the radios that plays 50s/60s music is the Jukebox and that station is not even listed in the list of stations. It plays automatically with an option to change it to other stations.
There is only one radio station on the LOOT Yacht now, the Billboard Top 100 which is on the Free Radio offered so people can judge how much of a space the radio covers.
The Jukebox works well in the Silent Hill Diner btw and would in the GZ Diner if I had enough space. Maybe I can find some.
In short, price OK as was and as is, but not happy as to radios not all having early rock music except for Jukebox.
Off to the forums to see what people are saying.
Look like they just changed the navigation.
up/down to free music, right arrow to radio IO, hit X, hit X again. and there are our old stations
Hey, thanks Dr_Do-Little!!! On the LOOT TV Yacht your instructions work. What I did before was click on Free Music instead of using the right arrow.
And on the radios besides the Jukebox, I found the 50s 60s music with the Elvis picture listed under ROCK two or three spaces over to the right. I don’t think it was there before but if it was it wouldn’t be the first time I was wrong.
Dr_Do-Little, ya done a lot.
I am a much happier camper now, for sure. You’ll win an award from me but sorry to say my awards are all in the garage and I can’t get to them until WInter is over.
Thanks again!
You know this is what I would spend 50 bucks on honestly! Thank you LOOT for making this happen. I love music, and I am very glad to have this in all of my personal spaces!!
You guys get it. I have to tweet something now. Thank you LOOT!!!
I really hate it when adults say things like that. Where are we kids supposed to get $50.00? I get one $50.00 PSN card for my birthday every year and that’s it.
The price of the radios seems fair enough. The main deterrent keeping me from buying one is the lack of space in any of my apartments for active items requiring 20+ memory slots. I like to furnish my spaces with lots of items and the active items just don’t fit. It’s not a complaint, just a matter of priority.
As the article states, it’s no longer 2008 or 2009. At that time, I would have jumped at the chance to buy a radio from Loot. These days, I barely use my personal apartments, and entertain guests rarely. I would have been satisfied just having the radio option in my Sunset Yacht and Hollywood Hills spaces. If I’m reading Kid_Fleetfoot’s post correctly, it sounds like those radios only receive a single free station now? That development is very disappointing since those EOD’s never used up any furniture slots within the spaces. Oh well, I’ll just continue to play my own music over the stereo while I use Home. It sounds better anyway and I can pick the music exactly as I please.
Even though I probably would not use one, I’m sure that many people will love the Loot radios. They are a very nice feature for many users.
Just read on the Forum that the radio only uses 16 slots (compared to 25 for the TV’s?). That’s a little better than 20+ but I’m still not sure that I’d use it. It’s a shame that they can’t solve the proximity issue and allow the radio to be audible throughout the spaces.
Yep. Slots requirement magicaly lowered to 16. Price advertisement at highest acceptable price and “bargain” on release day…
You thought them well Master Norse.
I wailed like a small child about their tactical decision to remove the stations from the built-in TVs, obviously to drive up sales of the portables. But after checking the spaces, and seeing they put back a channel I figured that was a sorta fair enough move. Then I heard they’d dropped the price for the bundle pack. These things, coupled with the fact I have this weird love for 40’s-50’s American decor, made me buy that bundle pretty quick. Also, you’ve made another good point Norse; I do like having my friends in my spaces to entertain, weird how my RL nature is so easily adopted by Home sometimes…
A good deal is only a good deal when perceived to be, Ive seen ex display products sell in a closing down sale for more than a brand new one did a week before hand, because people thought closing down sale must be a deal. In a world where I can thousands of radio stations on the net for free, I can get music on You Tube. Other social medias are so far advanced compared to home selling internet radio players with 900 channels for a dollar or less, You Tube music players for a dollar or less, so if its on You Tube I can listen to it and so can my friends. The major difference is that the Loot radios feel more robust and better quality, which because its virtual is a bit weird I know. But 900 channels and no updates means eventually you could end up with 900 channels of white noise, you tube player is good but hard work to get a string of songs together. But should there be budget versions that have none of the glitz of lids opening menu systems and 60 channels why not have a basic player, not like the free radio but perhaps just a picture of a radio station logo, no heads up, no menus just a few channels that you have scroll through to get channel you want.