Pay-what-you-want marketing experiment

Indie game developer 2D Boy just made an interesting experiment, in which they sold their game World of Goo for whatever price you were willing to pay.

I find this quite interesting from a business standpoint. Considering that most things are freely (if often illegally) available on the internet, I think exploring new marketing strategies is of paramount importance, probably more so for smaller companies than for large companies.

2D Boy wrote an exhaustive blog entry about how the experiment went and they also published an interesting chart on how much people decided to pay:

Many people only paid one cent for the game, (16,852 of them), and 15,797 paid between $1 and $2. They even had a questionnaire later on where they asked people to answer why they paid what they paid, and while many said “That’s all I can afford right now” (which I don’t buy for the 1 cent crowd, as I imagine anyone who can download a video game online could probably do without at least $1), many also said they wanted to support the “pay-what-you-want model”, many said they already had it but wanted it for another platform, too. Some said “I’ve played the game but never paid for it, took this opportunity to get legit”.

They also wrote that their sales of the game on Steam rose 40%, which makes me wonder whether maybe some of those that paid 1 cent for the game decided to buy it for the normal price once they tested and liked it.

I also wonder whether the people that only paid $0.01 would have bought/obtained the game through any other means or whether they wouldn’t have been customers any other way.

It’s also interesting to know that 2d Boy made no money on purchases of around 30 cents and under, as they had to pay PayPal for those purchases, too.

“Since the birthday sale started, about 57 thousand people bought World of Goo off our website. The average price paid for the game was $2.03 a significant percent of which went to PayPal for transaction fees. Normally, they keep about 5% of the revenue, but because PayPal fees are structured in a way that they take a larger percentage for smaller transactions, we ended up paying over 13% in transaction fees. For all purchases of around 30 cents and under, we actually saw no money, PayPal took it all, but they probably ended up losing money on most of those transactions ($0.01) as well, they’re not the bad guy.”
(http://2dboy.com/)

At any rate, I suppose this could be a good way to make some money off of a digital “product” few people are buying anymore.