Riot Games, the developer behind League of Legends, has been speaking out in a Reddit AMA about different aspects of its business. At one point it was asked about skin pricing, leading the spokesperson to pretend that it's all about player experience, instead of about money making.
The question put to the developer by an economics student was as follows:
“I was just wondering what kind of approaches you guys take just with approaching and analysing your e-commerce metrics. Because you essentially have an unlimited supply of any skins you're selling to players and with no competition you're free to set whatever price point you deem fair. So more or less how do you determine the optimum price to maximise the number of units sold?”
A fair question, since these skins won't cost that much to develop. Riot's response? It's all about the players.
“To be 100% honest, we don't have our skins priced to maximize profits,” said the Riot spokesperson. “We try to price them to maximize player experience. This means a lot of different things, one of which is generating enough revenue to continue to produce a great product for you. Many players may or may not believe this, but I can tell you that our prices are not “profit maximizing.””
The problem with this response, is that that's not how it seems if you look at skin and Riot Point pricing. If you're in the EU, you can buy Riot points in 400, 840 and 1780 (and more) packs. These cost 2.50 euros, 5 euros and 10 euros. This is fine in and of itself, but the problem comes when you look at skin pricing. Skins come in different tiers as well, with the cheapest “classic skins,” costing 520 RP, followed by Royal Skins at 750, Epic Skins at 975, followed by a few others that are starting to get ridiculously expensive for some quick visual upgrades.
Compare those two sets of figures and see how they line up. Notice how all the Riot Point options are just shy of being able to afford one skin at a comparable tier? If I want to buy a 520 RP skin, I have to buy 840 RP to do so. If I want to buy an Epic Skin, I have to buy 1780 RP.
In all fairness to Riot, skins and other visual upgrades are the main way it makes money and is able to provide the game itself for free. It also puts up massive prize packs for tournaments and competitions, so it's hardly a selfish developer, but it seems a bit arrogant to make out like there isn't some gaming of the system with Riot point and skin pricing and that it's all for the player's benefit. It might not be “maximising” its profits, but it's hardly throwing them away either.
Kitguru Says: I've always thought Riot could be a bit fairer with its skin pricing. How about just let me buy skins with real money instead of needing to bother with Riot Points in the first place? Microsoft ditched the point system, why not Riot?[Cheers ROG]