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MacroHard

Shop Pricing: Dynamic Pricing and the Invisible Hand

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Background:

For any given avatar, there is a unique demand curve.  The more that avatar costs, the fewer will be sold.  As avatars are "digital" goods, the supply line is perfectly flat; FB can meet any arbitrary demand with no additional investment.

To maximize income, avatars should be priced at wherever COST x UNITS SOLD is maximized.  This is a challenging calculation that relies on market predictions, which is why there are constantly sales and adjustments for all digital content across all digital games.

What if game companies didn't have to predict pricing demand?  What if prices fluctuated constantly and automatically to maximize BOTH customer interest AND net income?

 

Proposal:

Establish an initial price for all avatars.  If no units are sold within a given time period T, the price automatically drops by X percent.  As soon as somebody buys that avatar, the price automatically increases by Y percent.  These prices would be global; the more other people buy an avatar the more expensive it will become for you.  Over time, the novelty will decline and the prices for old or poor quality avatars will naturally drop.

No matter the circumstance, the price of the avatar will always be exactly what the market can bear.  No avatar will ever be overpriced.  No avatar will ever be underpriced.

 

 

If FB ever considers this I can help with the mathematics and simulations to optimize the ebb and flow of prices.  I didn't want to get too bogged down with the math on a suggestions thread.

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This actually reminds me of a brewery in Kalamazoo where FB is/was(?) located. Basically there is a board with a bunch of prices for various types of specialty beers, but as the amount of purchases of a certain brand went up so did beer prices for that brand. Likewise, if a specific beer would not get purchased enough its price would begin to steadily drop until it was low enough for people to decide to spend a couple of bucks buying and trying it. Thus continuing the cycle.

I just found the concept extremely interesting and can see it here as well.


I need to know something, Newerth. The way we used to be together... I... I don't mean lately, but before... It was real, wasn't it?

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Well aren't you a cleverboi.
Years of fancy HoN maths & graphs explaining things, still putting out the good ideas. gj

I think this is quite smart, my only question would be about how this would relate to gold coins vs silver coin prices.
Would a definite conversion rate need to be nailed down?
Or perhaps a fixed Silver price and the fluctuating Gold price to incentivize purchases?

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the incentives to buy are quite low in HON so I dont think it would really matter much people arent really spending real money on Hon and fortnite is already in decline so i suspect a new beast of a game battleroyal moba style will arrive in 2021 and a new era of money will be made sadly it wont be hon that ship sailed when they let league of legends out market them in the west

 

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