Business Theory: Fixed vs. variable costs

Business Theory: Fixed vs. variable costs

in Guild Wars 2: Heart of Thorns

Posted by: Huddi.8297

Huddi.8297

Q:

Warning: This thread might be boring for people not interested in business

A lot of business litterature on the topic of computer games claims that the fixed costs (development cost, marketing) are much higher than the variable costs (servers, customer service, packaging). Since HoT is only available digitally, the packaging costs are irrelevant and the relation becomes even more unbalanced.

Usually, when one has high fixed costs, one tries to benefit from economies of scale. In other words, one tries to obtain a high sales volume with a low/moderate unit price.
I am sure that the marketing team was aware of all the different strategies and selected the most profitable one. So why do you think did HoT end up with an arguably medium to high price strategy? Maybe because we GW2 players are not very price-sensitive?

Did I miss any major points? Feel free to share your thoughts!

Business Theory: Fixed vs. variable costs

in Guild Wars 2: Heart of Thorns

Posted by: K A O S Theory.6825

K A O S Theory.6825

I honestly believe that the marketing team thought that, given World of Warcraft’s success at selling 40-50 dollar expansions with a subscription fee, that they can get $50 for a game without a subscription fee. Many people justify that the price is perfectly fine given that there is no subscription fee. There is of course no way to really know this without an official statement.