> Well, I'm only willing to pay $5 for a game, so game developers should just make them cheaper.
No, it's not very complicated. You are better off letting the demand-offer forces of the market work, with elastic prices just like for the humble bundle or steam sales. A fixed-price is like a big car: you won't satisfy everyone. People have a fairly good idea of how much they have in their pockets and how much they CAN spend on stuff. As a content creator, your goal should be to maximize your audience, therefore making available to the maximum of people. That should push prices down, not up. So, if most people value "games" at 5$, that's your market price. You have to live with it, and no elaborate strategy is going to change anything about it.
Marketing to the mainstream is a strategy, but it's not the only strategy or necessarily the most successful.
Targetting niches and charging higher prices can work well too - I know more than a few people making reasonably good money off doing so.
You use the phrase "most people" there. A content creator doesn't care what "most people" will pay for a hypothetical generic product - he or she cares what the audience for his potential product will pay for that product. And that number can be wildly higher or lower depending on the audience and the product.
Agree mainstream is only A strategy, but look at all other markets-products-businesses: you won't find many examples where an industry has had tremendous growth while still keeping its price away from the mainstream.
Every business that wants to grow can do so by reaching to more clients. Cars became popular when they became cheap enough to buy (Ford T). Computers became popular not because the Apple II was great and expensive, but when the C64 was cheap enough everyone could buy it. I could go on for hours, it's something you find in every industry.
Of course, Ferrari, Louis Vuiton, Hermes, all those brands appeal to only a niche of customers. And they are still very profitable. But they won't grow much.
Games are not particularly price-elastic. You can drop the price of a $70 game to $30 and not see a significant increase in sales. That's why they're priced the way they are.
Time-limited bargains like the Humble Bundle and Steam sales work spectacularly well, however.
> You can drop the price of a $70 game to $30 and not see a significant increase in sales
That's because that's still way beyond what most people are willing to pay to play games. You do not reach the threshold at 30 $ where you maximize your audience. It's like saying, "This sports car was 2 million dollars, I am selling it half price and still nobody buys it".
That's precisely why the humble bundle and the steam sales work well. Because they offer you games at a price most people WANT to pay.
A retail game is considered a failure if it sells less than 1m units at $50-70 but the Humble Indie Bundle sold only 450,000 units at an average of just under $6. Clearly there is a market for full-priced games.
Both Steam sales and the Humble Bundle are vehicles for games that have already sold at a higher price and the sales curve is tailing off.
No, it's not very complicated. You are better off letting the demand-offer forces of the market work, with elastic prices just like for the humble bundle or steam sales. A fixed-price is like a big car: you won't satisfy everyone. People have a fairly good idea of how much they have in their pockets and how much they CAN spend on stuff. As a content creator, your goal should be to maximize your audience, therefore making available to the maximum of people. That should push prices down, not up. So, if most people value "games" at 5$, that's your market price. You have to live with it, and no elaborate strategy is going to change anything about it.