Product Life Cycle

How sales volume and customer characteristics change as a product ages.

As products, like games, age they go through various changes. Some of these changes occur on the development and marketing side. You’ll have patches to fix bugs and lower the price as the game gets older. AAA publishers use this strategy to maximize revenue; its called price skimming. This works because your customer base changes over time. Bear in mind that this is a general framework for a well-marketed product or service, so all kinds of variables can change your game’s life-cycle. This is also not really true of games executing a long-tail strategy.

During game development you should engage in community building. Many of the people you attract into your community before release, are classified as innovators. Innovators are willing to take more risks than the rest of the market. They will back projects on Kickstarter, tolerate mistakes, and understand delays. They are your best hope of getting a hard launch with high sales; so find them and reward their loyalty to your project!

Following the innovators are early-adopters. They take social proof from innovators and the progress of your project as a good sign, and jump on board. They may buy early-access or pre-release.

After release the early majority market will begin to take notice and purchase your game. If you are executing a price-skimming strategy your game should still be kept at full list price at this point.

Next, sales momentum will drop (all else equal), and this is the point where you should begin to lower the price. Late majority buyers will begin to buy (also called patient gamers) based on social proof from earlier buyers and a discounted price-point.

Finally, laggards, who either didn’t know about your game, wanted to wait for an even lower price, or were occupied with other purchases will buy. At this point average sales will be at the lowest point of the lifecycle.