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Subject: Re: Will the CM6K result, will this force chess programs down even more

Author: Steve Lopez

Date: 05:51:11 03/29/99

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On March 29, 1999 at 00:41:20, Lin Harper wrote:

>While we're on the subject, why don't the "professional"(did I spell that
>right?) programs appear on the shelves of computer game warehouses, alongside
>CM6K and the 'crappy' ones? Are they too snooty? Or is it that their prices will
>appear a little out of line in comparison to the other games. Mindscape has the
>better business approach to marketing a chess program, and will make a killing
>now with these SSDF results!

Speaking from personal experience, it's because you have to practically *give
away* your software to get it into mass-market. Why do you think Babbages,
Software Etc., and the rest debut a program at $50 and eventually knock the
price down to $15 or less and *still* make money? Is it because they love you
and want you to own the sofware for a mere pittance? No, it's because they pay
about $7.50-$10.00 per unit for a program that retails for $50.00, so after a
few months they can knock the price down to $15.00 and still turn a profit.
Software manufacturers make more money per unit on direct sales (therefore
increasing their ability to stay in business and produce new product) than they
can by selling through third-party vendors, and this is particularly crucial for
producers of specialty software (such as chess programs). Chessmaster isn't the
only program sold by Mindscape, just as Power Chess isn't the only Sierra
product (besides, Sierra went outside the company for Power Chess' engine
anyway).

Believe me, *nobody* is becoming wealthy in the chess software business. In
fact, I took a pay *cut* to return to ChessBase compared to what I'd been making
in non-software-related businesses (there were compensatory factors -- I work at
home, I have fewer hours per week, less stress, more time with my kids, etc).
But I won't be purchasing a yacht anytime in the near future.

By the way, I'm not disagreeing that lowering prices can increase sales. We've
been selling Fritz/Junior/Nimzo like there's no tomorrow since the price went
down to $49.50.

-- Steve Lopez



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