EA: Industry Must 'Deal With' 60 USD Pricetags Options

[Xbox-Scene]

EA: Industry Must 'Deal With' 60 USD Pricetags Posted by XanTium | October 31 22:26 EST | News Category: Xbox360

From next-gen.biz: [QUOTE] Electronic Arts CEO John Riccitiello suggests that publishers will soon have to "deal with" the $59 price point for next-gen videogames. With the US videogame industry on track for its biggest year ever at $17-$18 billion in 2007 revenues, it would seem that consumers are just peachy with the current price of next-generation games. "In the next five years, we're all going to have to deal with [the current pricing model]. In China, they're giving games away for free," he said in a Fortune blog report. "People who benefit from the current model will need to embrace a new revenue model, or wait for others to disrupt." [/QUOTE] Full Story: next-gen.biz

[pirichios]

"In China, they're giving games away for free,"

what the hell.....
does he mean what i think he means?

[quarky42]

what the hell.....
does he mean what i think he means?

If you think it means that many "games" in china make money hand over fist because of sponsorship, clever product placement, and blatant advertisement within the game, copious amounts of free and pay-for-addons, then yes you are right.

There are new models out there that show ways to make games free, or darn near free, while increasing the realism and not annoying the viewers. I loved the dodge caliber ad in Crackdown... It looked good up on the billboard and it made me immediately think of what GTA would be like if more of the basic food and advertising products had been real. (there is no need, in my mind, for a real brand of gun/ammo store.... but real brands of cars, advertising billboards, fast food shops, and other places could have been very impressive.


I sure hope we get a new model. This $60 a pop crap is for the birds... content is king. If they are going to keep putting in more advertising, then I expect the price of the games to drop....look at how well those silly games from Burger King did last year...those things sold very well.

[Tiuk]

I don't know about anyone else, but I know I'd buy a lot more games if they were cheaper.

[hamwbone]

who wouldnt buy more game if they were cheaper? duhhh

i cant pull up any graphs or charts but 59.99 for a new game sounds about normal to me, mario 3 was like 70 bucks, nfl quarter back blub 98 for n64 was 80$. sure the carts cost more but i dont find my self paying any more for games then i did 10-15 years ago. if anything i pay less, wait 2 weeks and look on ebay or amazon, you can get any new game for about 40$ shipped. use some inginuity, dont pay full price.

who wouldnt buy more game if they were cheaper? duhhh

i cant pull up any graphs or charts but 59.99 for a new game sounds about normal to me, mario 3 was like 70 bucks, nfl quarter back blub 98 for n64 was 80$. sure the carts cost more but i dont find my self paying any more for games then i did 10-15 years ago. if anything i pay less, wait 2 weeks and look on ebay or amazon, you can get any new game for about 40$ shipped. use some inginuity, dont pay full price.

[BasicAir]

$60 games are here to stay. The gamer "must deal with it" as well.

OXM has an article this new issue (77) that explains where your $60 goes to for a $60 game.

One thing that article fails to mention is that 90% of games that are released today fail to make a profit. Yes, ninety percent. This means that 90% of games today could and do benefit by selling their games at $60 instead of $50 then.

If you think about it, $50 games have been the norm going back to the late 80's and the NES. The fact that the standard price in video games went up another $10 over 15 years after $50 became the norm isn't only not surprising, but we as gamers are lucky that $60 didn't become the standard in the 90's and $75-80 is the standard today.

[jonny_eh]

They should also 'deal with' those $60 USD games selling for $70 CAD here in Canada. Newsflash, our dollar is now worth more than the US dollar, why are we paying $10 more then? I refuse to pay more than $60 for a game now. I bought Orange Box over steam to just avoid this nonsense.

[AcidLacedPenguiN]

I don't think the "$60 is cheap enough, if you can't afford that go buy on ebay" is a good enough answer.

I dunno about anywhere else, but here in canada new games (forza 2 2 weeks after its release) cost me $90 fricken dollars to buy. For a hobby where anywhere from a half dozen to a dozen interesting articles drop per year, that is too much to drop on said articles. It would not be too much though, if there were and alternate and cheaper means of acquiring them, say you could get an ad invested one for $20, I could live with that for most games and then for the real killer apps the $60 wouldn't seem so bad anymore.

[hamwbone]

if 60$ isnt cheap enough id say find another HOBBY

a car dealer makes about 120$ per hr to work on car.... a hair cut? 25$ for 15 minutes. a movie? 30$ (hd mind you LIKE the games) for 2 hrs....

do you folks see no value?! i spend hundreds of hours on most games (assuming there is multiplayer) for 60$. crikey folks

read the reviews before you buy, or rent them! 7.99 for a WEEK of entertainment.... argghhhh sorry

[greg0u812]

..............there is no need, in my mind, for a real brand of gun/ammo store.... but real brands of cars, advertising billboards, fast food shops, and other places could have been very impressive.
I sure hope we get a new model. This $60 a pop crap is for the birds... content is king. If they are going to keep putting in more advertising, then I expect the price of the games to drop....look at how well those silly games from Burger King did last year...those things sold very well.

It's all a matter of perspective.
In the area I live in, we have billboards advertivising various types of hunting equipment.........so.......I wouldn't see a problem with this being done in games (hunting and fishing types of games). Not real sure about seeing them in games like GTA and such. Again.......matter of perspective.
I used to think $60 was tooooo much for a game. Now I'm not so sure. One particular game I play (Tiger Woods 2006)........have been playing that game almost 3 hours a night (3 rounds per night) since I purchased it when it first came out. Talk about pennies per hour of gameplay!!!!! That is a pretty solid value in my book!

With that said...........my wife will not normally buy games for me because of the price (she will buy older games once the inevitable price drop hits). She and I would both purchase quite a few more at $40 (as I think the general public would also). I will NOT yet buy games such as Halo3, Bioshock, etc...... because of the price. Have rented both games and played a bit and enjoy both. Have both previous Halo versions (again, purchased after the inevitable price drop). Will do the same with these two games.
If these games were to come out at $40 instead of $60 I would go ahead and make the purchase.

I would think that the percentage of purchasers of new games would increase quite a bit beyond the percentage of increase that it would cost to produce more game discs at a cheaper selling price, therefore increasing the overall net profit to the game producing companies.

I sell a product that sells in nice quantities at $15 per piece. Started out selling same product at $20 per piece and had pretty good sells. Decided to "bite the bullet" and drop the price to $15............sells instantly increased (and have remained steady) by 47%. Although my profit margin per piece dropped considerably, my net profits (overall) increased dramatically. Don't know if the same could happen in the gaming industry (can not help but think it would help).

Although cost per hour of entertainment on the majority of the games coming out is quite cheap, I do not think a lot of people take that into consideration when looking at having to drop $60 on a disk to play a video game (especially parents of teens when looking to purchase a christmas present).

Again with the wife........She purchased NFS Carbon as a special present for me knowing that I would spend MANY hours (because of time spent on previous versions) playing this game. I was happy to prove her right.

In the end....even knowing the price per hour of entertainment.......it is hard for me to consider laying $60 down for a game disc when I KNOW the price drop will hit in a few months time for the same game.
Question I have on it is.........are sells being lost because once the hype of the game is over in a few months..........does the person still make the purchase at $30 or $40.........or have they gone on to wanting a different newer game and decided NOT to purchase the game at all (has happened to me on a few games myself that I would have been more than happy to drop $40 when they first hit the market ( = a potential sell lost because of pricing structure))???

Sorry to be so long in post, just trying to make sure my post is understood correctly.

[HotKnife420]

$60 games are here to stay. The gamer "must deal with it" as well.

OXM has an article this new issue (77) that explains where your $60 goes to for a $60 game.

One thing that article fails to mention is that 90% of games that are released today fail to make a profit. Yes, ninety percent. This means that 90% of games today could and do benefit by selling their games at $60 instead of $50 then.

If you think about it, $50 games have been the norm going back to the late 80's and the NES. The fact that the standard price in video games went up another $10 over 15 years after $50 became the norm isn't only not surprising, but we as gamers are lucky that $60 didn't become the standard in the 90's and $75-80 is the standard today.

I can assure you that they do. The article failed to mention that 90% of games don't make a profit because that's just a blatent fabrication. Why on earth would a developer continue to employ people it can't afford to employ? Games have an easy time generating profit. Most game development costs are stupid low in comparison to movies, but we have larger installed bases with each new platform, growing closer to your installed base of dvd-players (not near, mind you, but closer). Halo 3 was an expensive game to produce ($50 million, iirc). However, it made that, as well as profit on it's launch day.

Games were $40-50 back in the day because cartridges costed a bit to produce. DVDs are cheap as hell to manufacture, so $20-$40 would still yield significant profit margin. So technology has given the industry the means to have less cost to manufacture, while installed base is vastly superior to what cartridge based systems were, yet the cost of product has gone UP? What's wrong with this picture? I bet if Halo 3 came out for $24.99, they could've sold 10 million copies. That's a quarter of a billion generated there.

[jimbobjim]

I can't believe some of you are moaning about paying $60 US for a game. Here in the UK new releases are £50, that's $104. Think about that the next time you think you're being ripped off.

If anything game prices have dropped. The highest prices ever in the UK were N64 games ten years ago, one of those puppies would set you back £60. I once even paid £70 for goldeneye, which was actually worth every penny.

This post has been edited by jimbobjim: Nov 1 2007, 06:33 PM

[big_sigh]

I can assure you that they do. The article failed to mention that 90% of games don't make a profit because that's just a blatent fabrication. Why on earth would a developer continue to employ people it can't afford to employ? Games have an easy time generating profit. Most game development costs are stupid low in comparison to movies, but we have larger installed bases with each new platform, growing closer to your installed base of dvd-players (not near, mind you, but closer). Halo 3 was an expensive game to produce ($50 million, iirc). However, it made that, as well as profit on it's launch day.

Games were $40-50 back in the day because cartridges costed a bit to produce. DVDs are cheap as hell to manufacture, so $20-$40 would still yield significant profit margin. So technology has given the industry the means to have less cost to manufacture, while installed base is vastly superior to what cartridge based systems were, yet the cost of product has gone UP? What's wrong with this picture? I bet if Halo 3 came out for $24.99, they could've sold 10 million copies. That's a quarter of a billion generated there.

You are talking nonesense.

Video games are predominantly a hit driven industry, meaning that publishers fund lots of games hoping for a breakout title to make them mega-bucks. The majority of games *do* make a loss, that's why cash-cows like EA sports games are so heavily milked and why franchises and IP are so closely guarded. Have you ever read a site like Gamsutra, or browsed through industry mags like Develop or Game Developer?

Using Halo 3 as an example of how easy it is to make money is utterly absurd. Games consoles DON'T HAVE ANYWHERE NEAR THE PENETRATION OF DVD PLAYERS and the sales of top DVDs UTTERLY DWARF sales of even something like Halo 3.

DVDs, and even BlueRay disks, might cost a fraction of what carts did but the cost of developing a next gen title is astronomically higher than developing even a whole series of "big budget" NES games. What took 4 people 9 months on the NES now takes 80 people 3 years. And wages in the games industry are trending upwards (even relative to inflation) meaning that the cost of hiring one person for a year is higher than it was back in the NES days.

Also, and this apparrently will come as a suprise to you, not all the RRP of a game (assuming it actually sells for that) goes to the publisher! The retailer takes a huge chunk and the platform owner (e.g. Sony, MS, Nintendo) takes another good chunk. The rest goes to the publisher, who may give some back to the developer (depending on the contract).

Games have an easy time generating profit.

lol! I'll have to tell this to my friends who (unlike me) actually do work in the games industry. Then we can all have a good laugh about how easy the developers they work for find it to make money.

[quall]

I don't know about anyone else, but I know I'd buy a lot more games if they were cheaper.

Yah, only like 2% of the 360 games out are actually worth the $60 price. I have wasted enough cash on the 360, such a poor investment. I am starting to move back to PC, I mean, the main reason for a console on my behalf is because it is cheaper. But now they are the same price as a new computer, and a computer can do a hell of a lot more.

I am waiting for a modchip so I can get some return from all that wasted money.

Games were $40-50 back in the day because cartridges costed a bit to produce. DVDs are cheap as hell to manufacture, so $20-$40 would still yield significant profit margin.

What are you talking about? Games were $60-80 USD back in the day. Then went to $50 around the N64 time. The cartridges on the N64 games were about $20 to publishers. You are right in that dvd's are like 2k% cheaper to produce and that games should be cheaper. But, the average cost for a game to be produced back then was $7m for a huge production. Now, they are like $10m for a small production.

This post has been edited by quall: Nov 2 2007, 12:14 PM

[Chancer]

I don't know about anyone else, but I know I'd buy a lot more games if they were cheaper.

I think people would still only buy games they liked. People usually find the money or save for the games they want anyway. Reducing prices could mean selling the same number of particular games but with less profit. Seems to be not such a good idea for Games manufacturers. Cheap prices would not make me buy a game I wasn't keen on just because it was cheap.