Thoughts regarding third party pricing...

[YukonPete 599]

18 hours ago, mazex said:

There definitely is a small enthusiast market right now where there are enough customers willing to pay 50-150 USD for aircraft both in P3D/FSX/XP and DCS to cover the costs of producing them. The buyers are people like us here in this forum. I guess the median customer here is 47 years old and works as an engineer. Maybe has a PPL and to some extent regret that we did not go for a professional pilot career when we were young. But we didn't and it's too late now 🙂 And to be honest it's nice to be home the same time every day... But the median customer does not have financial problems and our main problem is actually to hide our software and hardware purchases from our wives/husbands/partners that would get very upset hearing that we spend hundreds of dollars a year on this hobby.

But anyone that has the most basic understanding of the economics of supply and demand know that if the potential customer base is ten times larger a lower price of 30-40 USD might very well bring more revenue to a company selling an advanced model of a 737 than 100+ USD. What happens otherwise is that someone else understands the market potential and does it. And if you sell it at 100+ now, it will be very hard to go down to 39 USD in a couple of months without getting loyal customers annoyed.

There is no doubt that we will continue to think that 70 USD is actually a fair price for a simulated aircraft. But the newcomers that will pour in now will not. And unfortunately, I think that in 6 months when the hype is over, we will be left with hopefully a customer base of MSFS that is twice as big as the community today. 

If I was responsible for the pricing strategy of one of the companies producing addon material for MSFS I would for sure consider the strategy that ORBX seems to go with. Reap the hype rider revenues now in the upcoming 6 months and rest confident that there will be a bigger customer base for a LONG time that will buy addons / DLC for 30-40 USD. But that's really the defacto high limit outside the niche enthusiast markets. And we hope to move away from that to some extent - don't we?

 

You pay for what you get. The cheaper the price usually = JUNK!   

[antonvs 76]

9 hours ago, Virtual-Chris said:

I’m new to flight sims and was shocked to learn that people will pay $130 for a plane. But then, I suppose these are the same buyers that spend $1000 on a yoke. I think the flight sim enthusiast economy is really screwed-up. 

........

 

I can understand this viewpoint by someone who is a “Gamer”. I don’t mean any harm in this statement. It’s just an observation that Gamers seem to be used to having a large catalogue, try something for a short while then move on to another “Game”.

I’m sure I may come as a surprise to these folk that as a “Simmer” over thirty years I have only had four “Games” this I call Flight Simulation so I guess we are in it for a different reason. Not saying we are any better or superior, just perhaps we are more serious about our love of Aviation, and Fight Simming allows us to pursue our dreams and goals.

This is probably why we justify spending up to $100 or more on an Aircraft. Especially given that perhaps unlike in the gaming world, it may last us for five years or more.

Also we know the amount of effort that goes into producing a Study level aircraft. This is often several years and with a staff of often five people. 

Conversely a $5-10 app may only take one person only a few days or  a month to get to market.

Anyway welcome to the Flight Sim World.

[lancealotg 95]

5 hours ago, DaveCT2003 said:

It's also why I work for Aerosoft - they're both good and smart people.

I have always had a soft spot for Aerosoft. Back when P3D first came out, I was pleasantly surprised to see their installer allow you to install their planes in either P3D or FSX or both, your choice.

While PMDG was requiring a full re-purchase price to install it in either sim (the infamous "patch" that prevented a fully flyable plane from working in P3D).

PMDG lost a customer and Aerosoft gained one. I have not given PMDG another cent of mine since then.

[Dominique_K 10,152]

On 8/14/2020 at 9:03 AM, mazex said:

. And we hope to move away from that to some extent - don't we?

 

Some remarks.

That the user numbers will grow (and I am not sure at all of that when, after 6 months, FS20 wont be a novelty anymore) doesn’t mean that the market will grow in the same proportion because the Gamepass creates a new commercial paradigm in the FS market. You can play once in a while, caricaturally put to check your house yet again, without be really committed to the game, without even buying it. « Doubling » the user base will not « double » the sale numbers and it would be dangerous for a TPD to believe in this mirage.

A market can have different segments, most have.  They answer more or less to the same basic need, with more luxury to the upper model and a brand name discriminating factor, the price (semiology 101). Is a Bentley SUV at 350 K EUR worth the price compared to a Lexus at 80K or a Nissan X-trail at 35K ? No answer but yours.  A Bentley and Nissan  are not in competition anyway.

You cannot compare Orbx and an aircraft TPD. Orbx has had a strategy to build a catalogue with hundreds of good products and to sell them relatively cheap. The aircraft TPD make a product once every two years and have a catalogue of less than 10 products. They generally make products that appeal to a small user base because they are more sophisticated. They have constructed a brand name and the price is a signal of that. Carenado falls in-between, a large catalogue expanded several times a year with middle-of-the-road prices (less and less but this is another story) and a middle-of-the-road quality. I personnally think that their price/quality ratio is lousy and I certainly do not want our hobby ruled by the Carenado business model as far as aircraft are concerned.
 

15 hours ago, Virtual-Chris said:

I’m new to flight sims and was shocked to learn that people will pay $130 for a plane. But then, I suppose these are the same buyers that spend $1000 on a yoke. I think the flight sim enthusiast economy is really screwed-up. 

 

 

The market is not « screwed ». It has been developping as it is for a long time. It is rational and rather healthy. What is screwed is the propensity of some (not targeting you) to want everything for not much. 
 

14 hours ago, joec63 said:

Understood , but for a newcomer I can see where they would be put off at that price level. Hence my comment. 

There are two types of newcomers , those who will stay in the hobby in any case and those who will use it a couple of times and throw it as a Kleenex they sneezed into.

High prices will not discourage the first because their intellectual curiosity will be stronger and they will understand that quality has a price, and low price will not keep the second category in the game because it is not made for them. I have said a couple of times that I play a lot of games, RPG, survival etc.  I am not not interested in twitch-and-shoot FPS though, CoD could be free, I wouldn’t download it. It is not for me.

 

 

 

[Eriol_Mits 33]

I honestly don't thing the price of third party add-ons for aircraft is going to change all that much for the high end market of study level aircraft like PMDG. The influx of a more casual base wont have any affect on their prices or marketing strategy because that's not the audience they are interested in. If you were to ask PMDG who there planes are built for, they wont be saying new casual flight simmers. So as long as people are willing to pay £100+ for an aircraft then that's what they will charge for it regardless. The only way I see this changing would be if people refused to pay the price and left them with no choice but to lower it to a more competitive rate and again looking at PMDG I highly doubt people would do that.

But that's okay, because not everyone needs or wants a PMDG. The people that want a high level study aircraft will spend the money. Someone who is new to flight sim will either decided to spend the money on the reputation that PMDG make the best 737, ect on the market, decided to go with a cheaper option which might not be study level but is aimed at the more casual player. I am sure they will be other 737's, ect. Out in the future as the intermediary between the default and the study level, or just not bother in the long run, maybe they are happy with the defaults and that's okay as well.

I think sometimes the community get confused because we want and expect 20,000 working systems. With virtual cabin crew that magically make a hot cup of coffee appear on your desk during a flight everyone wants that. Forgetting that a new comer will most likely be overwelled and quickly lose interest because all they want to do is get in the air. So the prices at the top end of the market will mostly stay unaffected, because the newcomers isn't the market they want. Its them intermediary level aircraft that bridge the gap in complexity between the defaults and the study level that will most likely see a price reduction. 

 

[Jetman67 517]

15 hours ago, 737_800 said:

I think no one here seriously wants a PMDG or FSL aircraft for 5-10 bugs. Most of us were ok to pay the old prices. That's where we need to go. However, when it comes to scenery, yeah the new ORBX system seems attractive and fair.

Agreed I will certainly pay what pmdg ask for the quality they output when I can get a super realistic jet that I can fly as much as I like,I think the people that complain are probably not forking out 350 an hour to  private hire a c172 so they think a one off 100+ payment is expensive,for me it's cheap for what I'm getting in the simulated environment

Edited August 15, 2020 by suchw

[mazex 419]

Well - just got a text from the CEO at my company (who knows I like flight sims) with a photo from the biggest swedish newspaper (DN) of today with the comment "Looks nice!". They have a full page review today that is very positive with the headline "Fly over the whole world - with the correct weather".

So CEO:s of Nasdaq noted companies are reading hyped up reviews about MSFS with their morning coffe. I'm pretty sure he has never read a review of a flight simulator before and would have to do a very deliberate search to end up with a review of P3D or XP last year... We sure will have an all new userbase in the upcoming weeks...

But I agree with @Dominique_K - it's very hard to tell if they will buy any addons before they lose interest. But it would be very odd if not quite a bunch of them gets hooked to a varying extent. Or are we that strange? 😉 Software sales in niche markets are odd as well these days with digital distribution with no real COGS for additional sales, odd elastics etc.

[Virtual-Chris 682]

24 minutes ago, Dominique_K said:

 

The market is not « screwed ». It has been developping as it is for a long time. It is rational and rather healthy. What is screwed is the propensity of some (not targeting you) to want everything for not much. 

 

Screwed was a perhaps poorly chosen word to summarize my previous observations.  I participate in a variety of hobbies... some come and go, some last a life time. We all know good things cost money. Large markets support thriving competition, tons of choice and something for everyone at many price points. What became immediately clear to me when entering this hobby over the last few weeks is that this is a very niche market, starving for choice, that pays a hefty premium for anything that’s not junk. Many products take an incredibly long  time to come to market, likely because the business case is challenging. So I disagree... the flight sim economy doesn’t seem that healthy to me. It seems to be barely functional, and extremely niche.

I do expect this new flight sim to change that though. It will bring masses of new people to the hobby that will see an influx of money. It may create a gold rush for 3rd party developers, and those that are quick, and not too greedy, with good products or enhancements stand to make a lot of money here. It will be interested to see how this plays out. 

[737_800 438]

1 minute ago, suchw said:

Agreed I will certainly pay what pmdg ask for the quality they output when I can get a super realistic jet that I can fly as much as I like,I think the people that complain are probably not forking out 350 an hour to hire a c172 so they think some off 100+ payment is expensive,for me it's cheap for what I'm getting in the simulated environment

That is not what said, but I am tired of the price discussion. So, it's all right.

[G-RFRY 1,734]

The biggest problem is there has never been as much competition in the gaming world, you don`t have to buy a game to play it just in game purchase's, and more are coming.   

[CFIJose 5,485]

Flightsim add-ons used to be affordable until the word "professional" was added to them.

Most simmers had no idea of what the word meant to flight simming.

In the words of Mike Tyson, it's ludicrous.

[mazex 419]

Thinking of it, I kind of agree that planes like the top tier PMDG ones would not really benefit from a lower price point as they are extremely complex and only apreciated by those who wants to use all those features. And they are probably already here. But someone doing a good loooking P-51 with nice historical skins, good systems and FM (much easier to do than a 737) might sell tens of thousands of them if the price is $29 or similar with the new customer base next week? And in the end they might make a lot more money than PMDG...

I would buy a decent P-51 for $29 on Tuesday without even thinking about it. Having spent thousands of dollars on virtual planes I would naturally pay a lot more for the best P-51 out there. But I think that a bunch of the newcomers to our hobby would buy that decent P-51 as well... But if it would be $80 they would never even think about it.

The guys at DCS really should port their P-51 to MSFS 🙂

Edited August 15, 2020 by mazex

[kiki 89]

We might be busy with all the default airplanes and the whole world to explore, so 3dp developers got to do their best to get some of our hard earned money! The products has to be really good or chesp (or both)! And many of has has  bought expensive hard ware as well...

[Dominique_K 10,152]

3 hours ago, mazex said:

 But it would be very odd if not quite a bunch of them gets hooked to a varying extent. Or are we that strange? 😉 

Oh, a lot of newcomers will be hooked by the simulation side of FS20  (the gamey side, I don't care, I am an elitist 😁). I am pretty optimistic. But I do not expect a  tsunami. I hope also to see more people in here from various horizons, not only Europe and North America.  We have seen these recent months more and more simmers from Eastern Europe, the Baltic states and the Middle-East. Great. Still too few from the rest of the world. Maybe FS20 will help. I saw that MS did some real marketing efforts in the Chinese world.

3 hours ago, Virtual-Chris said:

 .

I do expect this new flight sim to change that though. It will bring masses of new people to the hobby that will see an influx of money. It may create a gold rush for 3rd party developers, and those that are quick, and not too greedy, with good products or enhancements stand to make a lot of money here. It will be interested to see how this plays out. 

The market is healthy in the sense that it caters to the needs of users with a  large price range and is not dominated by one or two oligopolies dictating prices. PMDG and FSL have their counterparts with Aerosoft and iFly and now the default airliners. A2A, Milviz or Carenado etc. are on different level of prices. And there are a couple of very good freeware. Also,  no addon is necessary to have the game working. Not one is a compulsory purchase. This small market  has a wide offer for all budgets. Healthy. 

The gold rush concept to get lower prices is a fantasy  IMHO.

And the only greed I see on forums is user greed.  TPD make aircraft and sceneries to earn their life as best as they can. Some get rich ? Then what ? Your choice is yours to buy or not. 

BTW, flight simulation is not the only game to have these absurd discussions. Re :  the never ending and tiresome  saga on Stream about the Europa Universalis DLC ... 

3 hours ago, DJJose said:

Flightsim add-ons used to be affordable until the word "professional" was added to them.

 .

 Come on, my friend. The evolution toward high prices predates P3D and LM marketing trick to ask for 140 bucks just to erase a watermark from our screen. It is a normal evolution born from our insatiable  hunger for better products 😉.  

 

 

[honanhal 1,427]

You can already see the setup for the self-fulfilling  prophecy here. “Addons can’t be priced more cheaply because this is a niche market where only a small number of people will buy them.” Yeah, it’s well documented there’s no connection between demand and price...But sure, keep those prices in the stratosphere and you’re absolutely right you’ll only see a small niche customer base even with a broadly popular sim like MSFS.

As a customer, of course I’d love to see lower prices. But what really kills me is that if developers miss this opportunity to broaden their market, they also lose out. Literally no one benefits from that outcome.

James

Edited August 15, 2020 by honanhal