Cheap Beer and the Psychology of PlayStation Now Pricing

You can see in the graphic in the article that they advertise the price as "from $4.99." I think the ability to advertise a lower price, even if nobody actually takes it, is probably more of a factor. I think people are used to simplifying costs into multiples of 5, so "about $5 with a $2 upgrade option" sounds better than "almost $10."

The marketing scheme portrayed in the article is valid. However, I could see renting a game to decide if its worth buying, and my decision will be made in less than 4 hours so I have little interest in renting it for a week.<p>I could also see a gaming party where we rent 3 or 4 games and see what we think as a group. Again my interest would be in minimization of total spend, not optimization of hourly cost. Obviously the lowest hourly cost would be poker night or go on a hike and picnic.<p>Also, for an article only two months old, Amazon reports I can buy the game new with free prime shipping for $17.99 which makes the &quot;rent 90 days for $30&quot; rather odd, because less than 60 days later I could buy the game for about half the rental cost.

This is similar to the current iPhone 6 gap-jump pricing of 16GB ($199) and skipping the usual 32GB version altogether and going 4x 64GB for <i>just</i> $100 more - $299.<p>If they had done away with 16GB model and started with 32GB, not many would have jumped up to the $299 tier. So its effectively a price increase, as most will likely go for 64GB model as it offers more value&#x2F;gb. And Apple gets to advertise it as from $199.

I think another part of it might be that units are inherently less intuitive to us than numbers. Your mind sees the choices and reads &quot;4 7 30 90&quot;. And look at that! The 4 option is about $4 and the 7 option is about $7! Both seem quite reasonable!<p>And this is all great until you realize that 4 <i>hours</i> is quite different than 7 <i>days</i>.

If the highest tier actually was perpetual rather than 90 days, then I might consider it. (I remember that&#x27;s actually the way OnLive had it.)<p>Though, maybe I&#x27;m just not their target demographic of the service as I haven&#x27;t ever &quot;rented&quot; games in the past.

I find the second plot looks almost linear, IMHO plotting price&#x2F;time versus price (or time, doesn&#x27;t really matter) visualizes the sharp price increase much better

This works from the other side too. When you have a range of product options, one of which is very expensive, nobody really buys that one, but it raises the perceived value of the others so people are likely to spend more on average.<p>Both methods work because for most goods, people do not have a good way to estimate what is a fair price, so they use the price distribution of alternatives as a guide to what the price should be.

Not the point, but for a two year old game (looks like released in 2012) I wouldn&#x27;t pay more than 30$ to <i>buy</i> it.

A bad deal is a bad deal no matter the cost obviously. But what I find perplexing is why wouldn&#x27;t people compare against the current market rate to actually purchase said game? If Darksiders 2 is discounted to $10, why would it be rented at $5 for 4 hours? This comparison immediately discredits PlayStation Now&#x27;s value.

Part of the strategy is to emphasize the comparison to on demand movie rentals which get you 2 hours for $4.99.

This was covered in Predictably Irrational by Dan Ariely. It is an awesome book that talks about human behavior in day-to-day life. The best part: it goes on to demonstrate that even the smartest of the folks fall for these tricks in a lot of context.

So what should a rational consumer pick? I&#x27;m not seeing that in the article or HN comments.<p>The 30 days option? A different pricing mechanism? Would would that look like?

&quot;I would like a bottle of your second least expensive wine please&quot; - Homer Simpson