
Cheap Beer and the Psychology of PlayStation Now Pricing - adidash
http://www.psychologyofgames.com/2014/08/cheep-beer-and-the-psychology-of-playstation-now-pricing/
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ewzimm
You can see in the graphic in the article that they advertise the price as
"from $4.99." I think the ability to advertise a lower price, even if nobody
actually takes it, is probably more of a factor. I think people are used to
simplifying costs into multiples of 5, so "about $5 with a $2 upgrade option"
sounds better than "almost $10."

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evv
That is surely why they have a $5 option, but why 4 hours of gameplay vs 1
day? To make the 7-day rental look like a great deal.

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ewzimm
Right, which is related to but different from the article, which says that
introducing a cheaper option drives people to spend less and choose lower
quality for less money rather than paying a little more for better quality.
But I am not disagreeing with the original point. I agree that Sony might have
a motivation to get people to rent for shorter periods, such as encouraging
willingness to try more games because of less money devoted to a single game.
But I think the dominating factor is just being able to advertise below $5.

But there could be other factors, like making it such a bad deal that people
feel better about themselves when they avoid it. In a traditional retail
store, you often can choose between multiple brands of the same thing.
Different video games have some pretty big qualitative differences, so you
can't consider choosing between games to be the same as choosing between
bleach. You can usually shop around different stores to find better deals and
feel good about yourself about finding a better price. But with digital
distribution, when you are the only store someone can shop at, there's no
choice and no way to feel good about finding a good deal except for sales.
With streaming, there might be occasional sales, but they probably want to
keep prices pretty even, so they need to invent a bad deal to allow you to
feel good about avoiding it.

I don't know if it will last though, and I bet the length will get extended,
because seeing that your store is willing to offer you a really bad deal is
probably worse than the benefits of feeling smart enough to avoid it.

Either way, I would much rather buy used games for $5 rather than rent them
for any length of time.

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ekianjo
> Either way, I would much rather buy used games for $5 rather than rent them
> for any length of time.

That goes without saying. Renting Digital Goods is just nonsense, because you
can create a perfect digital copy for such a marginal bandwidth cost in the
first place. The "added value" of renting is an extra layer of DRMs. I'm very
glad Steam did not introduce any of this renting nonsense in their store.

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eterm
I actually wish steam did have a rental option.

I own way too many games that even at £5 a pop haven't given me £1/hr value.
Renting would let me play a wide variety of games without spending that much.

Other the other hand, the 500 hours clocked on cs:go would be terrible value
at any rental price.

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ErikRogneby
I've always found the lack of a secondary market for digital goods
interesting. If done wrong it would certainly screw the publishers, but a
system like steam that already does have a market for their trading cards and
some other in game purchases could implement a publisher tax. 25% of resale
goes to the publisher or something of that ilk.

I am sure if I actually read the EULA it would state something about single
party license that is not assignable.

But yeah, what if you let market forces control the price entirely? Launch day
only release X copies and then Y copies every day after. Have a market bid
system. Most games don't have long term value so prices would naturally
decline over time. An interesting thought experiment.

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VLM
The marketing scheme portrayed in the article is valid. However, I could see
renting a game to decide if its worth buying, and my decision will be made in
less than 4 hours so I have little interest in renting it for a week.

I could also see a gaming party where we rent 3 or 4 games and see what we
think as a group. Again my interest would be in minimization of total spend,
not optimization of hourly cost. Obviously the lowest hourly cost would be
poker night or go on a hike and picnic.

Also, for an article only two months old, Amazon reports I can buy the game
new with free prime shipping for $17.99 which makes the "rent 90 days for $30"
rather odd, because less than 60 days later I could buy the game for about
half the rental cost.

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z3t4
> I can buy the game new with free prime shipping for $17.99 which makes the
> "rent 90 days for $30" rather odd

I would say the 90 days is the "evil" option, because it makes the others seem
like a bargain.

There's a lot of psychological in in sales because it's almost impossible to
"value" something. All you can do is to compare it to market prices.

I especially like the "and get something extra for FREE" trick. :P

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gcb0
those prices are for kids. only.

since the xbox, and passing trhu the app store (e.g. FTL is 9.99 drm free for
3 platforms, vs appstore 9.99 for a single device). everyone with half a brain
knows buying online is never the best option. xbox FPS games are around $20 on
target and the like. buying on the live network it is $59.99.

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redindian75
This is similar to the current iPhone 6 gap-jump pricing of 16GB ($199) and
skipping the usual 32GB version altogether and going 4x 64GB for _just_ $100
more - $299.

If they had done away with 16GB model and started with 32GB, not many would
have jumped up to the $299 tier. So its effectively a price increase, as most
will likely go for 64GB model as it offers more value/gb. And Apple gets to
advertise it as from $199.

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freditup
I think another part of it might be that units are inherently less intuitive
to us than numbers. Your mind sees the choices and reads "4 7 30 90". And look
at that! The 4 option is about $4 and the 7 option is about $7! Both seem
quite reasonable!

And this is all great until you realize that 4 _hours_ is quite different than
7 _days_.

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unsignedint
If the highest tier actually was perpetual rather than 90 days, then I might
consider it. (I remember that's actually the way OnLive had it.)

Though, maybe I'm just not their target demographic of the service as I
haven't ever "rented" games in the past.

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PhasmaFelis
They already have a highest tier that gives you perpetual access. It's just
buying the game.

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unsignedint
It's not direct tier though. For instance, you won't be able to buy PS3 games
via download on PS4.

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lorenzfx
I find the second plot looks almost linear, IMHO plotting price/time versus
price (or time, doesn't really matter) visualizes the sharp price increase
much better

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AgentConundrum
4 hours ~= 124.75 cents/hr

7 days ~= 4.16 cents/hr

30 days ~= 2.08 cents/hr

90 days ~= 1.38 cents/hr

This is based on the full 24 hours per day. If you do it based on "usable"
time, which I've defined as 8 hours a day, it looks like this:

4 hours ~= 124.75 cents/hr

7 days ~= 12.48 cents/hr

30 days ~= 6.25 cents/hr

90 days ~= 4.17 cents/hr

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robert_tweed
This works from the other side too. When you have a range of product options,
one of which is very expensive, nobody really buys that one, but it raises the
perceived value of the others so people are likely to spend more on average.

Both methods work because for most goods, people do not have a good way to
estimate what is a fair price, so they use the price distribution of
alternatives as a guide to what the price should be.

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lorenzfx
Not the point, but for a two year old game (looks like released in 2012) I
wouldn't pay more than 30$ to _buy_ it.

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bitwarrior
Nor should you. The game costs $18 brand new on Amazon:

[http://www.amazon.com/Darksiders-II-
Playstation-3/dp/B0056WJ...](http://www.amazon.com/Darksiders-II-
Playstation-3/dp/B0056WJA6M)

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ConAntonakos
A bad deal is a bad deal no matter the cost obviously. But what I find
perplexing is why wouldn't people compare against the current market rate to
actually purchase said game? If Darksiders 2 is discounted to $10, why would
it be rented at $5 for 4 hours? This comparison immediately discredits
PlayStation Now's value.

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backlava
Part of the strategy is to emphasize the comparison to on demand movie rentals
which get you 2 hours for $4.99.

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ajmurmann
Where is that? Google Play gives you 30 days and Amazon I believe gives you at
least 48 hours for a movie.

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dmcg
Assuming you watch the movie once, it's 2 hours no matter how long it was
available for.

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luckyno13
But $5 for a one time watch isn't too bad if you are only going to watch it
once. Otherwise you buy it for $10-$15 and watch it once, and maaaybe come
back to it later.

With kids movies on the other hand, kids tend to watch their movies more than
once so the game changes a bit. $5 for 48 hrs vs 30 days vs $15 for perm
access becomes a bit more complicated. I would feel bad for my parents if they
had to pay for a TMNT movie each time I watched it :)

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hm8
This was covered in Predictably Irrational by Dan Ariely. It is an awesome
book that talks about human behavior in day-to-day life. The best part: it
goes on to demonstrate that even the smartest of the folks fall for these
tricks in a lot of context.

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chippy
So what should a rational consumer pick? I'm not seeing that in the article or
HN comments.

The 30 days option? A different pricing mechanism? Would would that look like?

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CPLX
"I would like a bottle of your second least expensive wine please" \- Homer
Simpson

