XIha Life has just lowered prices in all it’s games to 6.99 and 10 euros to attract better sales. This means that more than 1000 of their games have been lowered into more affordable price groups. This is something, having a casual gaming background, I’ve been waiting for. Xiha Life is growing strong, according to Jani Penttinen – one of the founders. Xiha Life received a nice investment some time back from some Chinese investors and are building their network with that, they already have 4 international offices open.
If you look at pricing on a larger scale – it doesn’t make much sense to try and sell casual games at 20-30 dollars. Even World of Warcraft is priced at 13-15 dollars a month (depending on contract). Even with low prices, its extremely hard to build a healthy consumer base. Habbo Hotel for example has some 10% of its users paying for its services at around 10€ a month. With such figures, Habbo is considered to be one of the benchmarks in the industry.
Furthermore, looking at the price distribution of the iPhone appstore (data from July 2008), you can see clearly that most products are priced extremely modestly. With such competition, it’s very difficult to build a sustainable business. Then again, pricing online is relatively simple as you can find out the elasticity over time and thus price your products accordingly.
What’s the most you’re willing to pay for an service online and do you differentiate your willingness between service genres – entertainment, music/videos and others?