Hello, chaps. Passing stranger who'd happened to run across this discussion and thought it might be worthwhile to throw in a cent or two.
Now, passing through all the fire and venom, it seems to me that a great deal of this discussion boils down to one simple question - is Matrix Game's pricing strategy (i.e. unusually high prices compared to most of the industry) the best one possible? That is, does their pricing strategy bring in the maximum amount of revenue that can be gained from their games, thereby enriching both the developers and the publishers as much as they can hope for and thus fueling future games?
To begin with, it can be easily established that a lower price can in some cases lead to greater overall profits. A brief look at your local supermarket and their many sales will clear that up, and I see little reason to expand on the reasoning there much further at the risk of belaboring the obvious any more than need be done. We can thereby conclude that there is a possibility, at least, that a strategy of lower prices and higher volume could prove more beneficial than its converse.
Are there, then, special circumstances that preclude the high-volume strategy? Judging from the arguments presented, there are many who think so. In effect, it is argued that Matrix Games covers a small niche, and that this niche is incapable of growing and that all those outside the niche will be so supremely uninterested that prices would need to be dropped to unacceptable levels to lure them in. Such a situation would indeed doom any high-volume strategy to failure, as the publisher ends up leaving money on the table. But is this situation actually true? Let's look into it a bit.
First, there are those who argue that the actual events and time periods and actions being covered are not interesting to those outside the niche - a recent post in this discussion specifically states how most are not interested in an 18th century Prussian simulation. I can't help but think, however, that this argument doesn't hold up that well. Age of Empires 3, for instance, covers roughly the same time period, and was taken rather well by the gaming community at large. Empire: Total War did less well, but the flop had more to do with its unfinished and unpolished state - the fact that it caused as much bitterness as it did actually contributes to the idea that 18th century warfare can be interesting to people. Napoleon: Total War did rather better on its release. And of course, how we talk about games covering the 18th century without mentioning Europa Universalis? Now you can certainly state that some of these games simplified the historical details involved and that they relied more on spectacle than strategy, but the point still stands - the historical periods being covered, even the more obscure ones, are not inherently incapable of engaging a wider audience, so long as they are properly presented (that is, marketed). Certainly other subjects may have larger markets, but it can be seen that the market of "slightly obscure history" isn't actually so incredibly unappealing so as to turn off outsiders entirely.
If, then, the actual subject matter isn't an obstacle, are the designs of the games a problem? These are, after all, remarkably complicated beasts down to their very bones, which could turn off the less dedicated player. But before we can begin this discussion, one thing must be made clear - our goal here is to put money in the pockets of the developers so that they can make more such games. Therefore, it doesn't seriously matter if someone only played a game for a handful of hours before putting it down again as long as they paid for it and as long as they came away with a generally positive impression of the game. Looking at Steam achievements for wildly popular games can be very instructive in this regard. Skyrim, for instance, boasts only about 51% of players who managed to reach a fairly early point in the main questline. Only about 55.4% made it to about the midway point of XCOM. A full 17% of Civ 5 players have never founded a second city, something which should happen fairly early in gameplay. We can see, then, that not playing the game much is no obstacle to either funding the developers or passing on good word of mouth - some things are just cool even if you don't have the time to go through them all.
From the developer's point of view, then, there isn't really a need to turn every casual gamer who picks up their games into a ravening fanatic who racks up triple-digit playtimes. It's enough as long as they pick up the game in the first place, and generally like what they see before they put it away again. This lowers the bar tremendously, as a game need only be just appealing and just accessible enough that a wider audience can get a taste of what is offered - with a couple of them, hopefully, finding out that they want much, much more and becoming new and loyal fans. Can this bar be passed, then?
Evidence suggests that it can. Paradox Interactive's games are, of course, the prime example. While it can be argued that their games succeed only on the basis of "Paradox loyalists", the obvious question must be asked - how exactly did Paradox GAIN these loyalists in the first place? I would argue that their success can be attributed to good marketing, good product accessibility (for grand strategy games, that is - they still aren't as accessible as more mainstream titles, and probably never will be), and industry-competitive prices, which has allowed them to draw in people who might not have normally touched a grand strategy title, providing them with their loyalists who provide them in turn with a large and steady income stream. Other examples include Unity of Command, which allows even the most incompetent neophyte to have a basic idea of what he's doing and enjoy himself even as he leads his armies to doom and destruction. Battle Academy, too, hasn't exactly done badly for itself, and it's easily one of the more accessible games in Matrix's stable. Accessible wargames or grand strategy games that appeal to a wider audience than existing Matrix fans, then, are clearly quite possible and quite profitable - and would be likely even more profitable if sold at lower prices than they're currently going for.
But what of the more complicated games, like War in the Pacific or Distant Worlds? Can these be made more accessible without reducing the detail and complexity that gives them their charm for their old fans? Here, unfortunately, I am more out of my depth, and to the best of my knowledge questions like these remain in fairly fierce debate in communities where the developers have decided to produce more accessible games in beloved series. What can be said, however, is that since we've demonstrated that affordably-priced and more accessible strategy games can find a wider audience, it's entirely possible for a developer to use the money gained from more accessible games to fund the development of their more complicated games - in fact, they gain twice, as fans of their more accessible games would be more receptive to the possibility that their more complex games are worth checking out. While some of these may find the more complex games to be too rich for their blood, they will still have actually bought the games, and some of these newcomers may even discover that they had a hidden love for such things all along, bringing new fans, new blood and new money to the table.
As we can see, then, the case for cheaper prices bringing in greater profits is a fairly strong one, and not so easily dismissed. Nor is it at all easy to simply assume that higher prices will necessarily bring in greater profits. That is not to say that the argument is ABSOLUTELY perfect, and that Matrix Games is 100% guaranteed to earn more money overall if they reduced their prices, but it can certainly explain why there will be people constantly questioning their business practices, particularly when it shuts out prospective consumers (as it does - the question isn't whether more people will buy the games at cheaper prices, but whether enough will). Disposable income is ultimately a limited resource, and judging from the examples above there are quite a few people who could well be interested in the kind of strategy Matrix Games helps provide, but who aren't willing to take a gamble by putting down as much money as is normally provided for well-reviewed AAA games. While ultimately Matrix Games possesses information we do not have and are in any event the ones making the final decisions, I would ask that they examine the reasoning behind their decisions more carefully to ensure that they are truly doing what is best for their company and their developers and not leaving money on the table.
In closing, I'd like to end with a relevant link. The link is to a blog post by Jeff Vogel, a long-time designer of RPGs who insisted on pricing high for what he felt was a niche product - old-school RPGs with lousy graphics. He felt that it was literally impossible to generate enough sales outside of his niche by lowering prices. The blogpost essentially explains how he realized he was wrong. (It seems I can't post links yet, so Google Jeff Vogel and "Why all our games are now cheaper") While old-school RPGs are not grognardy wargames, it's still an interesting lesson to consider - and one possibly worth applying.