Playing with pricing in Moonlighter
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I started playing a Moonlighter again on my Nintendo Switch last week, I hadn't touched it in a few years and a few things struck me.
Moonlighter is a video game in which you play an adventurer and shop owner in a medieval fantasy looking village near several dungeons, filled with monsters and exotic loot.
The gameplay follows a loop in which you can adventure in the dungeons by night, bring objects back, and sell them in your shop by day. This in turn finances new equipment and weapons, so you can go back and brave the dungeons again.
The design style is a lovely pixel art and the procedurally generated dungeon rooms (as in, they change every time randomly) look a little like the screens in the first Legend of Zelda video game on the NES console.
They recently announced a sequel to this game, and it looks like they are upgrading the design style.
The protagonist, named Will by the way, wears a big backpack and picks up all sorts of stuff from the dungeon, bits dropped by monsters, things found in treasure chests, etc.
As you get ready to open your shop, you choose which items to sell, and this is the point I'm interested in thinking of here, how much for.
If only I could remember Zenon’s advice…
Pricing is one of the four traditional Ps of marketing (the others are product, promotion, and place).
Managing the Moonlighter shop.
As you can see in the image below, the items you handle in the game start with a not particularly helpful "????" as indication for the possible price of the item. The only other clue is that all the items you can possibly find in a given dungeon seem to be listed in an ascending order from least to most valuable, so little by little, finding items, you can start to begin gauging if it might valuable and how much.
Once you open your shop, customers wander in, peruse your wares, little thought bubbles show up on screen, emoji expressions along a spectrum matching four price points:
The four faces of Moonlighter customer reactions to prices.
Absolutely delighted, meaning the customer got the coveted object for an absurdly good price.
Happy with their purchase and the price.
Flat face grumble, probably feeling somewhat overcharged.
Disappointed, unhappy, and typically won't buy the item at that price point.
Price elasticity, is a notion that means to measure the reaction to price changes.
If supply or demand changes considerably along with price change, like in the Moonlighter shop, then the price is considered to be elastic. If I price my items too high, customers will be unhappy and won't buy it.
In the Moonlighter shop, items also have random levels of popularity, meant to represent something about elasticity. If an item is popular one day, I can probably sell it for more money and people will still be satisfied with their purchase.
Price elasticity is being tested widely and increasingly these past few years since we're in a time of inflation, and in a time full of algorithms testing price fluctuations and customer response to them on apps like Uber, or on on McDonald's ordering screens (that might be more about how prices show up rather than straight up fluctuation, though some fast food brands like Wendy’s have been talking about dynamic pricing, like price surges on Uber or Lyft, with much backlash - so far).
Apparently trial and error seems to be the only way to figure out what kinds of prices match with customers' expectations and satisfaction though.
I might try a high price in Moonlighter, then wait and see what customers' reactions are. I don't know what high means ahead of time. One time, I set what seemed like a high price on a thing I'd never seen before, which was immediately bought by a customer who was gladly making the deal of a lifetime - meaning I could have sold for a lot more.
It seemed like a high price because it was higher than anything else I'd sold up to then, but it turned out people were ready to pay a lot more for that particular thing (a Golem tome, or whatever it was).
There is something kind of interesting and a little bit fun about running around and playing at managing the Moonlighter shop and trying to find the right price, but it's arguably not the most fun part of the game, and it gets a little repetitive.
In particular none of the pricing in the game is that strategic, or takes much thinking.
This is how a lot of pricing seems to be done in business too, mostly by trial and error. Maybe very sophisticated trial and error with A/B testing in an app or a website (showing two different screen versions and then evaluating if one yields more sales or similar), but it's still kind of throwing numbers out there and seeing what sticks.
We might think it could help to ask customers, but people are terrible at knowing what they'll pay for something, and that changes depending on a variety of factors. These topics are often mentioned in psychology and behavioral economy.
“Most people don’t know what they want unless they see it in context.”
Professor of Psychology and Behavioral Economics at Duke University, and best-selling author, Dan Ariely talks about a now famous pricing experiment in that book and TED talk, where The Economist may have increased subscriptions to their online and print offer by adding a third option that rationally doesn't make sense, but does make the most expensive digital + print edition more attractive than the digital only subscription.
That could be one way to strategically play with pricing: considering the context in which your customers might buy your product or service, and adding options to provide additional context, perhaps make one option more attractive than another.
For another local example, a designer friend who works for a 100 year old bar and restaurant in Paris, where I live, recently redesigned the menu, and included illustrations for their non-alcoholic cocktails, or mocktails.
Their price didn't change, nor did the offer, but they increased mocktail orders by 20% out of the experiment. It seems like many people who ate there for lunch and didn't necessarily want to drink alcohol at that time hadn't thought about ordering mocktails until they could see them in a colorful and attractive page in the menu (it may also say something about the value of having printed menus rather than QR codes only).
We don't necessarily know what we want or how much we'd spend ahead of time, but that doesn't mean it's not worth asking questions to potential customers. If you want to play with pricing, then it's even more important that these questions be about the context customers are in when possibly considering your product or service.
Pricing is probably the single most important lever one can shift to increase revenue and more importantly, profit. It's definitely one to bear in mind when it comes to marketing your brand.
I’m going to play with a few possible pricing experiments and exercises, please keep in touch if it’s something you might be interested in talking about.
