Indie games are more popular than ever. They compete with mainstream titles that have bigger budgets and more resources for critical acclaim and gamers' spare time. They win awards and some are massively successful. But there's still one place where indie games have it rough: pricing. Many consumers will happily shell out $60 for a retail game, but will cry foul if a downloadable title costs more than $5. A combination of frequent sales and customer demand is driving the price of these games lower and lower. And in the minds of many consumers, low prices equals low quality.

Ars spoke with several prominent indie developers to learn whether or not the low prices for indie games is having a negative affect on how they're perceived.

The Steam effect

One of the best places to find great indie games for ridiculously low prices is Steam. The digital download store almost always features some sort of sale, and pretty often this includes indie games—sometimes in bundles, sometimes alone, always for cheap. Some recent Steam sales have seen popular games like World of Goo and Machniarium sold for discounts of more than 90 percent off. And while this provides some excellent promotion, it also means that a whole lot of copies are being sold for a very small price, which affects how much the developer is able to earn. But sometimes it's worth it.

"With Steam, our first sale was 25 percent off, and it generated around three times the daily revenue while it was going on," explained Ron Carmel, co-founder of World of Goo developer 2D Boy. "I believe this was mostly because of the promotion that the sale got, not as much the actual price drop, but it did drive home the point that Valve knows how to promote games on Steam very well. Our first 75 percent off sale generated something like 25 times the daily revenue."

The simple fact is that these games get noticed during these promotions. A low price can entice customers who may not have purchased the game otherwise to shell out a few dollars. This can be a valuable form of promotion, especially for a game that's struggling sales-wise.

"Sales were going slow," Andrew Goulding, the developer behind the point-and-click adventure Jolly Rover, told Ars. "Steam suggested right away that the price was wrong for this type of game at $19.99, but I wanted to see how it would go. I think they were right. This lead first to a sale to drop to $9.99 with okay results, then lead to a permanent drop to this price with an additional sale about three to four months after release. At $9.99 I make about the same revenue on average, but sell more copies, which is the way I would prefer it, as the game gets out to more people."

Jolly Rover was also part of one of Steam's recent holiday bundles, packaged alongside Gish, Puzzle Agent, Recettear: An Item Shop's Tale, and And Yet it Moves. For one day, all five games cost just $5. And despite only getting one-fifth of the bundle's revenue, with nearly 47,000 copies sold, Goulding said he still made more revenue in that one day than he had during the game's entire life up to that point.

"This solidified my opinion that Steam know their audience, and they know what they're doing when it comes to pricing games," he explained.

Jakub Dvorsky, from Machinarium developer Amanita Design, agreed saying, "It's definitely worth [selling at a reduced price] if the promotion goes well and brings you a lot of traffic. Many people also buy impulsively when the price is low and the time is limited. I guess you can see this on Steam during big sales—people are buying many games because it's so cheap but later they don't have time or desire to play all of them."

So in the short term these sales are a good thing. They bring in more sales, more revenue, and expand the reach of games that frequently have very little marketing support behind them, if any. For those games, getting on the front page of Steam is a huge boost, putting it in front of a huge audience of gamers.

But what are the long-term effects? If most players are buying these games at a severely reduced price, how does that influence the perception of indie games at large? It's not an easy question to answer, especially considering how relatively new these sales are, making it difficult to judge their long-term effects. But it's clear they're somewhat of a double-edged sword. Exposure is good, but price erosion isn't.

"When it comes to perception, a deep discount gets people playing the game that [they] wouldn't play otherwise, and I think that has both positive and negative effects," Carmel told Ars. "The negative is that if I'm willing to pay $5 but not $20, I probably don't want to play that game very much, so maybe I'm not as excited about it after I play it and maybe I drive down the average appreciation of the game.

"On the other hand, indie games, despite all the press they're getting in the last few years, are still very much an underground thing—So more exposure and more people talking about them could be very good in that it exposes more people to the extremely diverse and interesting games that come out of the indie scene."

Comparing Apples and indie games

Steam isn't the only place to buy indie games, of course. Since its release, the iPhone—and later the iPad—has become home to some of the most innovative and exciting indie games around. It's relatively cheap to develop for and has a huge built-in audience, making it an excellent platform for a small development team, or even solo devs, looking to make a big splash.

One of the more recent success stories is a game called Trainyard. The puzzle game quickly skyrocketed up the App Store charts back in October thanks to a combination of factors. Trainyard was Apple's featured game for a week and even managed to climb into the top 50 paid apps chart. With the increased visibility, sole developer Matt Rix decided to reduce the price on the game, dropping it from $2.99 to $0.99. Two days after lowering the price, Trainyard became the second best selling paid app, even temporarily overtaking the indomitable Angry Birds.

Eventually Rix raised the price back to the original $2.99.

"I kept it at $0.99 until it dropped off the top 100 of most of the major charts," he told Ars. "I felt if I didn't raise the price at some point, then I was being dishonest in calling it a sale. I also feel that $2.99 price point gives a better sense of the quality and depth of the game."

Unfortunately, having a higher price, even one as low as $2.99, can make it difficult for a game to gain visibility. Being in the top 50 immediately puts your game in front of many users, and the easiest way to get there is to have a low price. And a quick look at the top-selling games on the platform reveals that the $0.99 price is king.

"I think in a lot of ways that price point is damaging," Rix told Ars. "The average user doesn't comprehend the massive volume of sales that a game like Angry Birds has every day, they only see the price. Comparing normal iPhone games to Angry Birds just isn't fair, but I see it happening on a daily basis.

"I [think] there's one key factor that's often overlooked, and that's that the most important App Store charts are based solely on the number of units sold, not the gross revenue. That's a really important distinction because the charts are self-influencing. The higher you are in the charts, the more sales you'll have, and then you'll go even higher in the charts. Therefore having a high number of sales is really important, so it makes sense to lower your price, even if it actually makes you less money at first."

And the same is true of another indie melting pot, Xbox Live Indie Games. Though originally the service only allowed three specific price points—800, 400, and 200 Microsoft Points ($10, 5, and 2.50)—games can now be sold for 80 points, or one dollar. Inevitably this has led to a decrease in price for a number of XBLI games, including many of the most popular games on the service.

One of the earliest hits on XBLIG was Weapon of Choice. Developed by Mommy's Best Games, WoC was sold at the mid-range $5 price point. And while that game was a success, subsequent releases from MBG have released at the current lowest price of one dollar.

"As time went on, and we saw the hesitation from gamers to purchase XBLIG, we went for the 'high volume-low price' strategy to maximize revenue for [subsequent releases] Shoot 1UP and Explosionade," MBG president Nathan Fouts told Ars. "I think this works if you have a game that broadly appeals to gamers as opposed to a very niche title."

As with the App Store, XBLIG features a list of bestselling games that serves as one of the main forms of promotion for games. And, like the App Store, this has caused game prices to dive to the bottom, as developers attempt to get themselves on that list.

"Open digital systems are driven by their 'most popular' lists; in the case of XBLIG it's the Top Downloads list," explained Fouts. "This is the engine of the channel. When a game can reach the top of this list, it gains much higher traffic and downloads, which can nearly perpetually keep the title at the top. Lowering the price is another way to remove any obstacles in the gamer's mind when they are considering downloading or telling friends about the game.

"Achieving the critical mass at launch is extremely important in the open-market download scene as there is usually very little marketing, and high volume of new titles."

In conclusion

It's hard to fault indie developers for participating in Steam sales or lowering prices for iPhone or XBLIG games. With no money for marketing, a low price can be the only way to get your game in front of a large group of people. And ultimately that's why people make games: so people will play them. It's a tricky situation, as the short-term effects can be huge, while the long-term effects are potentially very damaging. There are problems with certain platforms and exposure, but hopefully quality will eventually win out over low prices.

"Do a good job, and you can charge a premium and get great sales," said Fouts.