View Full Version : Game Theory: The Increasing Price of Videogames
thezombiemessia
12-08-09, 18:32
http://www.guardian.co.uk/technology/2009/aug/12/higher-prices-videogames
A price war is about to hit the games (http://www.guardian.co.uk/technology/games) industry – and for once it's not good news for consumers. Last month, Activision announced it would release its eagerly awaited shooter Modern Warfare 2 with an RRP of £55 – £15 more than most new console releases. And there was more: the former boss of Sony (http://www.guardian.co.uk/technology/sony) Europe, Chris Deering, said publishers would soon consider pricing games at £70 to make a profit. This seemed to embolden Activision's chief executive, Bobby Kotick, who told reporters last week he would be willing to go higher than £55, especially with "premium" editions of games.
One thing is clear: it now costs around $30m (£18m) to build a title for PS3 and Xbox (http://www.guardian.co.uk/technology/xbox) 360, 10 times more than the average PS2 development budget, but publishers aren't making 10 times more money. Something's got to give – and it looks like it's going to be us, the gamers. In some ways, we can't really complain; cartridge titles on machines such as the N64 and Snes regularly retailed for £50-£55. It's only with the advent of cheap optical media that prices dropped. And these days publishers have to provide significant post-sales support.
Retailers are worried, pointing out there's a bit of a recession on, so perhaps raising prices isn't the best idea. The tactic could lead to a horribly misshapen industry, in which a handful of "tent pole" titles are released every year – doubtless big sequels and entertainment franchise tie-ins. Original projects will migrate to download services such as Xbox Live, creating a chasm between budget releases and the massive Triple A showcase releases.
There's got to be a better solution. The answer may be dynamic in-game ads, which have been employed in a number of Xbox 360 titles. According to the market research outfit Emarketer, US companies are set to spend $170m on in-game advertising by 2013, which should help to offset those dev costs – although gamers aren't always pleased about the intrusion, and ads were recently removed from the PS3 title WipeOut HD as they doubled loading times.
Ultimately, publishers may just have to sit down, read Chris Anderson's latest book, Free, and rethink how they deal with pricing. Perhaps they should look at the mobile phone or pay-TV businesses, offering different tariffs for differing groups of customers; a fixed low price for those who just want to bomb through the single-player missions and don't mind a few ads popping up in the process; and a higher price, or subscription charge for those who spend weeks playing online and downloading new weapons. It'll be complicated but at least it could mean not filling shelves with £70 copies of Michael Bay movie tie-ins.
I don't know if I'm going to be able to afford to game anymore...
Activision announced it would release its eagerly awaited shooter Modern Warfare 2 with an RRP of £55 – £15 more
It was not long ago Activision threatend Sony if they don't drop the ps3 price they would leave the platform.
Now they pull this stunt.
You would get some people buying them at that price but many would stop so it's a double edge sword they would charge more but less would buy so would they realy make extra money in the long run? I doubt it.
ya true. i am sure sales will drop through the floor. and does it really cost 10X more to make a next-gen game? all there is different really is time. it takes longer to animate and programme since there is soo much detail to add. but an extra year or so doesn't multiply the cost by 10X! right?
thezombiemessia
12-08-09, 19:29
The technology is different, and more complicated to use.
You have to buy the technology, or take the time to build the technology. You have to pay the people that make it all, and the longer it takes, the more you end up spending.
And teams that make games are slowly getting bigger.
Compare the credits list of RE1 to the credits list of RE5.
AlienHunter
12-08-09, 19:41
in Italy brand new games are 60€ or 70€ now, that's why i started buying on online retailers in UK..an example?
yesterday i went in the shopping mall and RE5 was 65€ and SF4 60€
so this article isn't really surprising me a lot
The question is, would you be happy to see advertising in game to maintain the prices as they are now?
The question is, would you be happy to see advertising in game to maintain the prices as they are now?
Advertising has never botherd me so I don't mind.
You get it in just about all other media so why not?
junglist_dnb
12-08-09, 21:35
uh oh,dont like the sound of this,it costs enough as it is keeping up to date with games & increasing the prices will surely drive away a lot of consumers & possibly result in more people turning to piracy (scum).
advertisements dont bother me,I barely notice them anyway but its often nice to have them there,adds to the realism I spose,aslong as they dont go crazy with it like in some titles.
AlienHunter
12-08-09, 21:42
The question is, would you be happy to see advertising in game to maintain the prices as they are now?
it depends...if it's a proper advert stopping the game action suggesting me to buy this or that wouldn't be nice, but i don't think a virtual poster in a virtual wall shouldn't be that bad or intrusive
but that would be variable from game to game...a skyscraper of a real brand in GTA or even Resi could be acceptable, but drinks or clothes by some famous brands in Monster Hunter would be too much weird
thezombiemessia
12-08-09, 21:49
The question is, would you be happy to see advertising in game to maintain the prices as they are now?
It all depends really, like AlienHunter says...it depends on how intrusive they make it.
If we're running around in a city-scape, and there are posters or billboards for real items, or perhaps crates with a brand name of them, I don't think it'd bother me too much.
I mean, it didn't really get in the way during Bionic Commando.
However, if the game stopped, and all of a sudden I was watching an advert break in my game...then I'd be really annoyed.
If they were able to make it look natural to, that'd be fine. Prototype or InFamous, for example, could of had multiple brand names being advertised in their cities (much as in real life), without it seeming too bad.
DigitalSouls
12-08-09, 22:14
It's not just the development of new "full version" games, that get more and more expensive. Even old Arcade Titles or new stuff like Trials HD or something like that went up from the common 800MSP in the past to 1200MSP. Looks like this might be the new standard.
The 360 is out for nearly 5 years now and it's still the lead platform games are programmed on.
I think it's harder to program on a new released platform cause you need to get used to it and sometimes use workarounds. But the more you program on it the better is your effiency.
So I don't get it, why publishers push prices.
One reason, that was discussed in our Clan Forum was the point, that more and more ppl import games cause of the low prices.
As an example:
Modern Warfare 2 goes for 70€ preorder here in germany. I could get the US Version for like $60 (~43€) as an import.
For ingame-ads... well as long as they are subtle enough. I'm ok with the ones in Forza2. They just fit in the game. Also the tiny "ads" in MGS4 like the I-Pod was ok for me.
But hopefully I won't see the guy from Assassins Creed 2 running around in Nike Shoes or something like the (thank god gone for now) ads in Wipeout.
The 360 is out for nearly 5 years now
4 years in November for the USA and 4 years in December in europe ;)
DigitalSouls
12-08-09, 23:09
4 years in November for the USA and 4 years in December in europe ;)
Okies 4 years. I'm too dumb to calculate @ 1am xD
Okies 4 years. I'm too dumb to calculate @ 1am xD
nah your not dumb just tired i guess :)
Bah, it shouldn't take that much money to make a title in the first place.
It's been proven time and time again that graphics =/= a great game.
Case in point: Megaman 9
If this were to happen then you can guarantee game piracy will shoot up, and the sales of pre-owned games as well. Both of these will have a negative effect on the games industry, which unfortunately will lead to fewer blockbuster type games being released.
God help us if alot of the developers start making shovelware type games.:(
I can remember paying £60 - £70 for snes games back in the day, although these were cartridges and probably cost alot more to produce then.
As such i really dont have a definitive answer if this is the right way for the games industry to go. As a consumer i want the best deal i can get when it comes to buying games, however i also don't want the games industry to start bringing out shovelware type games which appeal to the casual gamer, based on cost.
It's a good job Tenebra's here, so we have a chance of winning games in her giveaway sessions.:D
If you think about it, though, the price tag for games has stayed the same/gone down for 4 years, and I honestly couldn't mention a product that has enjoyed such stability in price for so long. Just look at public transport and how fares go up by a good 10% every year...
Kieron Baird
13-08-09, 11:55
I find xbox arcade games and downloadable content for the xbox 360 is pretty pricey. I mean I would never pay 400 msp for an extra costume for a few characters in Street Fighter 4, sorry Capcom but I feel even for 1000 msp for every characters costumes was too much.
As for reular games, I just wait for the prices to drop on play.com and then bag a bargain,unless I really want the game.
If you think about it, though, the price tag for games has stayed the same/gone down for 4 years, and I honestly couldn't mention a product that has enjoyed such stability in price for so long. Just look at public transport and how fares go up by a good 10% every year...
Think about it: Games are now a massive market worth more than Hollywood. Could it have anything to do with the fact that games are more accessible because they're cheaper? I think it's at least partly the cause. Pricing games out of reach won't crash the market but I'd bet it would severely restrict it at a time when many publishers are folding. I would hate to have my choice limited to EA and Activision :rolleyes:
I think 47 is right. The end product will mean less games are bought. Many games companies might believe they have "The game", the must have title, but most of them would end up wrong.
The RRP is only going from £49.99 to £54.99 so it is only a fiver. In shops games sold are usually £39.99 so they will go to £44.99. I don't agree with the increase on the majority of games as so many games are rushed out now as they know they can patch them at a later date.
COD MW2 I think is an exception as this will sell no matter what price. If they do increase prices we at least need a guarentee that they will support the games after release. There has been an increase in cheaters and glitchers recently. If they can promise to stamp this out I do not have a problem with an increase but if it continues as it has I do begrudge the publisher the extra money.
This is really the first increase in games since the console came out. I remember paying £40 for NES games. There were always exceptions games that did cost extra such as Manic Mansion on the NES, Mortal Kombat & Street Fighter on the SNES. These games were all £65 at launch and still sold well.
With regards to Live arcade games. I think the majority of these should remain at the 400 - 800 point mark and the 1200-1600 should be the exception not the norm. The whole point of the arcade games is that they are cheap so that you will buy them without much of a thought. At 1200-1600 these are not as cheap and quick insta purchases and require thought before buying and I bet sales of them are less. I would buy 400-800 games all the time because even if they were rubbish it was only a few quid. Now I research any arcade game I am going to buy and buy far less and most people I know feel exactly the same.
I'm not convinced, Soop. When the 360 was launched, PS2 games were around £29.99 and everybody thought that the increase to £44.99 of the new gen games would make them less accessible. It didn't quite happen...
Good point, I didn't realise that.
When I was a kid, you could buy a Speccy game for £1.99 from Spar
ok. i've been waiting to say this.
1) of course activision and EA are going to price games higher, because they can. the only reason CODMW 2 is 50 pounds is because call of duty is a mega-million franchise with many followers and highly rated games. if you can make them more expensive and still sell, then why not.
2) there is always going to be a game developer or games that are priced cheaper. IT'S A COMPETITIVE MARKET! so basically if you are a game developer, you can either *A- price higher and not sell as much. or *B- price lower and sell more. it just depends on business tactic. some games are always going to be cheaper
what are they gonna do? all sign a contract saying everybody will price their game 15 pounds higher? increased price may possibly be popular in the future but it reall all depends on minds of the consumer -------- buy 1 cheap game and save money or buy one expensive game. whichever does better is what developers will go with. if nobody buys expensive games then they HAVE NO CHOICE but to lower prices.
Good point, I didn't realise that.
When I was a kid, you could buy a Speccy game for £1.99 from Spar
Speccy games that brings back some good times.
When the Ps1 first came out the games were £39.99 to £44.99 SRP
With Platinum games £19.99
When the Ps2 first came out it was the same then Ps1 games dropped to £29.99
The Ps2 platinum arived at £19.99
Then a load of budget games hit the ps1 at £9.99
Ps2 games dropped to £29.99 just befor the Ps3 came out with also a load of budget games from £9.99
At the moment Ps3 and 360 games have a SRP of £39.99 to £44.99
With Platinum Ps3 games between £19.99 and £24.99
360 greatest hits are £19.99
All those are SRP (sugested retail price) means some places may charge more some places may charge less
I have not paid more than £35 in a long time on any game on any platform as i look arround for the best deal.
Whilst their is physical media you can always look arround and find games cheaper than the SRP.
It's when it goes to DOD (download on demand) that the SRP will be the price you pay.
As for adverts keeping games cheaper I don't mind that.
My two cents are that while £50 is very expensive when you compare it to other activities such as buying a dvd boxset, going to a music gig or watching a football match then it's relatively good value for money. Think of the amount of time you spend playing the game, especially if it's a good multiplayer or playable online.
In saying that I notice that what tends to happen is retailers discount the price anyway. I've already seen some online retailers selling COD at £35, rather than the £55 talked about.
Btw found this report while putting something together for my blog, apparently in game advertising is going to be worth 1 Billion by 2014! - http://www.mediaweek.co.uk/news/908125/Screen-Digest-forecasts-1bn-boom-in-game-advertising/ I'm not too keen on in game adverts myself though, depends on the context
£40 now is nothing compared to £60 for lylat wars 10+ years ago! lol
Carbonox_Ratchet
25-08-09, 00:15
Heh, I remember buying PS2 games for £44.99 or more when the console was fairly new. That's just how it was. I also had no qualms spending £50 on a new N64 title. What worked for me though is that I wasn't buying any old game; I was going for solid and quality games that really justified the price, as well games that could last me longer than 3 or 4 separate ones. I'll come to this in a minute.
See, the thing is that the general gaming population are a fickle and greedy bunch. Many are far too ignorant to understand the development process of a game and how much said developer is trying to run a business. This means certain decisions aren't always going to appeal to the gamers and that at the end of the day, money has to be made to progress.
It's inevitable due to the technological requirements and the billion other factors that go in to game production/development/marketing etc. The demand increases, prices go up and what you'll find is an evolution of ideas and ways in which you can go from zero to a brand spanking new game. This costs money and will continue to do so.
With developers also going for cinematic quality, you have games like Resident Evil 5 and Metal Gear Solid 4 that feature some stunning motion-capturing, voice-acting and a general movie-like gritty realism that most games fail to capture. This is becoming far more popular in gaming, and to really achieve this requires advanced technology and methods that are incredibly expensive. Grand Theft Auto IV is one of the most expensive games ever made for example, with world-class voice actors, soundtracks and the whole shebang. Sure, a GTA game is guaranteed to sell but it doesn't excuse the fact that a mega sum of money is required to really get the finishing touch you desire.
Will advertising in games help out? It depends to what degree before you start getting unhappy customers. See, games set in cities and towns with a certain reality aura could hold and support advertising. However, could advertising work in a game like Mario Bros.? Don't make me laugh. Developers should try to think of ways where advertising can work and be suitable. Otherwise you'll end up with an Argos catalogue's-worth of useless content that hinder the experience. Let's not get carried away now.
Personally, I don't buy many games for the sake of it anymore. I like to be a bit careful with my purchases now and pick titles that will last me. Otherwise it's a waste of money. I'd be more than happy to buy a game like Modern Warfare 2 for £50 because that's value for money from a gaming perspective. You've got a big package in terms of gameplay features that could last you longer than 20 separate titles. However, would I spend the same amount on a game that lasts 6 hours with no multiplayer? No, and neither would anyone else, which brings me to the negative points...
While the smaller developers with less budget may decide not to follow suit with the big publishers/developers and release games for £50, you know some will try. But are these developers shooting themselves in the foot? Like I said, a 6 hour game with no multiplayer with little marketing is unlikely to hit the headlines or even sell all that well, and hiking the price will all but secure said game's short lifespan before it really took off. If anything, hiking up the prices could result in many a death where small developers are concerned, UNLESS they can find a niche within the downloadable market that has work well for many now (devs of Super Stardust HD, Everyday Shooter etc.). It may be a shift but it could potentially keep them in business unless they can...how should I say...forcefully shove their big budget games down our throats. If they make their games known, they may just be able to appeal. Providing there is the content to last...
Renting will be on the rise, without a shadow of a doubt. This plays a part in my point above about games lacking in content. Why spend £50 when I can rent for nothing and still finish everything? This was the problem with Terminator Salvation and why it was a flop. Everyone rented and everyone could finish and get every achievement/trophy within 6 hours. This can also affect the business strategies of many developers as their price hikes are falling on deaf ears. I know I wouldn't fork out that much for shoddy titles.
So what could happen? You either end up with a lot of good titles or developers will still be lazy and still hike their prices. Then what? Either way, it wouldn't be all plain-sailing for the industry. Many would still support their favourite developer/publisher but on the other hand, many may just put their hands up and say, "why should I spend this much?". Only the big developers would survive this, with the likes of Modern Warfare 2 a guaranteed seller, irrelevant of the price. This is down to the game's quality however, and if you can ensure gamers of such quality, you may just find yourself home and dry. Yet if you're a smaller-scale developer struggling, I can't begin to fathom how quickly you'll sink.
Is a price hike justified? From a business perspective, yes, of course. Like I said, technology is on the rise and with that rise comes fees. More money is being spent and more money is required from the consumer end in order to fuel further spending. Developers have that right and they should wield it.
Agree with Carbonox Ratchet, I'll only make a few select purchases nowadays mainly those games which I know I'll play a lot or those that are worth the money. Otherwise I'll wait until they drop dramatically in price or just rent them.
the only reason CODMW 2 is 50 pounds is because call of duty is a mega-million franchise with many followers and highly rated games. if you can make them more expensive and still sell, then why not.
Edge had an article about why MW2 costs more. I haven't read it though. It might be on the site though.
draconacticus
25-08-09, 12:52
I think it's a mistake for games to go beyond the £50 mark. It's a psychological barrier that will only harm sales and probably make piracy more widespread. At these prices you're getting beyond pocket money prices.
I don't think in game advertising is a bad idea it needn't be invasive or too obvious - racing games could just have real billboards on the tracks and real sponsor names on cars like they do IRL, first person shooters - if you pass bill board on a street it could have a real add on it - up to the user if they regard this as just part of the detailed scenery and ignore it or if they choose they could stop to read it. Advertising could actually add more realism to gaming environments in some situations.
I remember the days of £1.99 speccy games. All those wonderful sundays spent typing in Load "", Enter, Play... and enjoying the delights of the electronic squeals and beeps for 45 minutes until operation wolf failed to load again.
You used to get mega pack compilations of games too - remember those? 10 Titles for £15!! Those were the days. I got Platoon, Predator, Barbarian (web of death anyone?), Operation Thunderbolt, Target Renegade.... All for 15 spondoolies. Them's were the days.
I'd pay gladly pay 50 quid for a game. Although, the amount of games I buy goes down drastically, not because I'm not willing to pay, but because I realise that I can't buy as many and only buy the bare minimum of what I want(unless the game I want has a special edition ;)).
IMO paying £40 - £50 for a game isn't bad, providing the game has 20+ hours of gameplay, and a multiplayer mode.
I think what is going to worry most people is if developers start asking this price of every game, even those games with as little as 8 - 12 hours of gameplay, and no multiplayer mode.