The Pros and Cons of the Bundle Promotion

In light of our recent post series on alternative sales methods developers have access to; there is one other that has grown in popularity -- Being part of a bundle. Sites like the Humble Bundle, Groupees and others have made a name for themselves while giving developers massive awareness for their titles.

But the reason why they weren't included in the post series is that it’s by far the riskiest option and one that needs to be handled very carefully.

Bundles:

The bundle promotion is simply the act of having your game be included in a set of games being sold for a massive discount. Sites like the Humble Bundle allow people to pay what they want for the basic bundle, with more options available for people who donate more money.

These promotions usually run a few days to a week and can get massive attention as the price is usually within the impulse territory for most consumers. When it comes to moving products and getting visibility, bundling is one of the best options around.

Advantages:

When it comes to bundles being set up, the site usually puts a combination of games with high and low awareness together. The reason is that the games with the higher marketability drive people to buy the bundle which the low marketed games can leverage for sales.

With bundling, there are three types of consumers who are going to be going into it. First are the people who are interested in the charity side of things which is what the Humble Bundle promotes. These people are going to donate higher than normal to support the charity.

Second are the people who are interested in getting one or two specific titles from the bundle with the rest seen as a bonus. This is where the lower marketed titles have the advantage as these consumers were probably not interested or aware of your game to begin with and now they have a copy. This means either they will enjoy your game and you'll have a new fan for your next title, or they will simply ignore it and you'll just have the income from the sale.

Bundles allow users to buy games for a massive discount and give developers improved visibility.

Lastly are the bargain hunters -- the people who are buying them just to buy them. This group doesn't really care about the store, charity or even you as a developer. They're just interested in getting the best deals around. With that said, expect them to donate the absolute bare minimum to get what they want. This is where it's all about bulk sales and hoping that the massive number of copies sold will balance out the low price that people are paying.

While Bundles are a form of a marketing event, it's really more about the store front and the promotion itself, not the developer and this is where the start of the problems comes from.

Disadvantages:

The problems with bundling your game are that you lose control of how your game is being sold. The first part of this is that just because someone donates X for the bundle, doesn't mean that you're going to see that money.

Each store takes a cut right off the bat of the sale and then the remaining amount is then split between all the developers who were a part of the promotion. With the Humble Bundle and its promotion of being for charity, another percentage of the profit is given to the charity and consumers can control how much the store, the developer and the charity get with their donation.

As you can guess, the only way you're going to see a profit with being part of a bundle promotion is for moving massive numbers of the bundle. And even then, it may not even be as close to the amount you could make by using one of the other sales strategies out there.

Another problem is with supporting your title and how this can come back to bite you in the future. All those people who may have earned you less than a dollar each, will be expecting full price customer and technical support. If your game is going to appear on other storefronts like Steam, they may expect their bundle key to get them a Steam copy as the value of a Steam copy is greater than a regular copy thanks to the features it has.

While Bundles are great for consumers, the developers will have a hard time turning a profit due to how much they're actually making.

This means more work for you and less sales of your game on the new storefront. What's worse is that by being part of a bundle, will devalue your game and you may have just sold all the copies that you were going to get at a fraction of the price. While bundling can be great marketing tactic, it is critical that you know when to make use of it.

Knowing when to Bundle:

Understanding when to put your game in a bundle is very important as you want to make sure that you have already gotten as much money out of the product through normal means before putting it in a bundle.

As we've talked about, bundling is when you are more concerned about the visibility of your game as opposed to profit and because of this it's better to be in a bundle after the game's shelf life is up. With that said there is one thing you should never do -- Release your title in a bundle.

While the visibility will be great, you will not make anywhere near what you would selling it for normal price and making use of marketing strategy to drum up interest. And again, all those people who bought it for bargain prices will expect the level of customer support that someone buying your game for $20 will get.

Easy Money:

Even with the risks associated with bundling, their use can be just what you need to get more interest in your title and make a little extra money. While you should never rely on a bundle to make a profit off of, it can be a great way to get one last revenue stream from a title and get your studio some visibility.

(Reprinted from the Xsolla.com blog)