this post was submitted on 07 Dec 2023
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The price is right. See Price Discrimination: https://www.investopedia.com/terms/p/price_discrimination.asp
To summarize for people who don't want to click in, different gamers are willing to pay different amounts for the same game. If you keep the price high then you earn a lot per customer but on a small customer base. Set the price low and you earn a little per customer but on more customers.
Price discrimination is basically finding ways to charge each customer the most they'll pay - that way you earn a lot for the customers willing to pay the inflated amount while not losing the customers looking to save money.
There are a variety of ways businesses do this - sales are one way. Grocery stores often use coupons, as higher income consumers often won't bother to deal with clipping coupons. Sometimes the exact same manufacturer will make both a brand name product and then the generic brand with a small tweak. For business to business sales, some companies do pricing per customer based literally on the most they'll pay.