BuzzerBeater Forums

why not just increase the prices little by little? is it not as effective by the game's design?

because you earn less money with it, lower prices mean higher income if you had enough seats.

higher prices means higher income as well if your fans keep attending.

if expansion meant more people would come to your games by default THEN i could see the point in expanding but from what i thought and what you said, it doesnt work like that.

by lower prices more people come to your arena by default ;) But i am out now, because i definately don't know the right words to explain it.

Last edited by CrazyEye at 6/3/2011 8:50:35 AM

thanks anyways haha

i was just wondering if anyone did any experiments with this because from what i can estimate (this is a simple profit maximization problem 8D) the revenue increase you get from increasing the ticket price EQUALS expanding the arena(Thus increasing the quantity of seats, allowing more people to come watch. holding price constant). But expanding the arena incurs costs so in the end, its better to increase price first(and when you cant increase anymore, THEN expand).

everything i just said is assuming that your attendance is 95%+, so demand~>supply. If supply<demand then this problem doesnt exist yet.

does anyone have experience with this?

everything i just said is assuming that your attendance is 95%+, so demand~>supply. If supply<demand then this problem doesnt exist yet.

for attendance to be 95%+ all games, you pretty much have to win all your away games which is very improbable for many teams. for real life what you are saying might be correct but this is just a game and i dont think getting prices higher and not expanding the arena would be beneficial.

Having more seats gives you more latitude with the pricing to deal with promotion/demotion changes in fan demeanor and better/worse than expected runs.

For discussion, let's assume that the willingness to purchase seats is based on the total cost (i.e., you can sell up to $X in luxury boxes, whether it's a lot of cheaper ones or fewer more expensive ones). Let's say that for a given team, they can sell $4200 in luxury boxes, so that a team with 7 priced at $600 and a team with 3 priced at $1400 is exactly even. What happens if you're slightly off, and only $4195 is available? The unsold seat costs $600 in the first option and $1400 in the second scenario.

Having more of a range for pricing helps as well. If you had one seat to set at a given value, it would be really hard to optimize your income, since a miss would be disastrous (and thus, a downturn from a bad league result more crippling). And in the end, if you never expanded, you'd be limited to $131500 at maximum seat prices for the starting arena, of $139500 if you added 5 luxury boxes.

For discussion, let's assume that the willingness to purchase seats is based on the total cost (i.e., you can sell up to $X in luxury boxes, whether it's a lot of cheaper ones or fewer more expensive ones). Let's say that for a given team, they can sell $4200 in luxury boxes, so that a team with 7 priced at $600 and a team with 3 priced at $1400 is exactly even. What happens if you're slightly off, and only $4195 is available? The unsold seat costs $600 in the first option and $1400 in the second scenario.

and normally you would have 9+ guys who pay 700 when you could sell 1 for 3 for 1400, and the luxury boxes are maybe the only category where the one more or less sold ticket border matters in my eyes.

There ain't a real study about it @threadstarter, but the experience of the most users would agree that lower ticket prices give you enough visitor boost to make more money. The only field on discussion about it, is in my eyes very low prices in the lower tie because there is just a small difference to bleacher prices.

The exponetial rate of people who would attend your games seems to be higher with more seats and lower prices than seats with higher prices. When prices reach the $17-20 range, there is a big drop off in people willing to come and pay that.
For example 6000 people would be willing to pay max price of 20 for bleachers while 13000 would be willing to pay it at $10 dollars.

Pricing higher is important, I would agree. Selling tickets at the standard price and still expanding your arena seems foolish. But the fact is that arenas cannot be built overnight either. Therefore expanding the arena at intervals of needs is neccesary. What it really comes down to is the amount of money on hand with which you pay to expand.

To put it another way:

At a given time, there is a group of people willing to come see your game. Each person carries a different amount of money. For example out of 5000 people and 1000 Bleachers with a smattering of other seats (and assuming that the pool stays the same, IE that you're undefeated):

50 have $1000
150 have $150
200 have $50
400 have $20
700 have $15
1300 have $13
2200 have $11

Let's say that promotion builds the pools of each of those prices by 20%. So from D.V to D.I in the US:

D.V - 400 / 1000 seats
D.IV - 480 / 1000
D.III - 576 / 1000
D.II - 691 / 1000
D.I - 829 / 1000

We'll simplify and say that you promote every season and have 10 Home Games a season. So our overall Arena Proceeds will be - 80K + 96K + 115.2K + 138.2K + 165.8K = 595.2K from simple growth and not building any more seats.

We'll take case study 2, the builder. We'll use the same 5000 people and 1000 seats to start. He's going to grow his Arena by 10% a year and place his tickets at $15. For simplicity, we'll say he grows his Arena only during the offseason. His attendance chart looks like:

D.V - 1100 / 1000 seats
D.IV - 1320 / 1100
D.III - 1584 / 1210
D.II - 1900 / 1331
D.I - 2280 / 1464

This guy will make: 150K + 165K + 181.5K + 199.65K + 219.6K = 915.75K. His outlay for Arena expansions cost 200 per seat x 464 seats = 92.8K. Total profit of 822.95K. He's not only making more per year, but making more as an overall ratio, starting by making 53% more in D.V compared to making 75% more in D.I.

In short, growing your Arena at lower prices given the overall curve of game attendees will be by far more lucrative over a longer period of time when compared to max prices.

I am not going to go into specifics but from my experience raising prices has a diminishing returns. At a point you start driving away more of your fans than the xtra income from the raised prices will make. You are in division 3 just like I am but I bet with my 3k more seats and lower prices I am making a lot more money than you.

^of course you are making more...you have 3k more seats. if you take away the 3 k seats, we are generally making the same or i might be higher. Do the math. But the difference is you invested a lot more money in your arena than I did, which leads back to my original problem which you dont seem to understand.

im not arguing FOR any profit maxing tactic. Im simply wondering which one is better in the end since i havent seen a discussion about it. Notice I'm not saying to not expand, Im just saying it might make sense to raise ticket prices to as high as possible first (while keeping the attendance high) THEN expand.

I kind of got the answer I was looking for, with that being said, I think theres only two people in here that actually understood the problem lol.

Last edited by Bauss at 6/3/2011 8:37:58 PM