http://money.cnn.com/2004/09/29/comment ... /index.htm
Kind of funny when you look at the upcoming releases and see more $29.99 and $39.99 games then $49.99...
Some are even calling for the prices to go up this fall.
Game Prices going up for next gen games?
Moderators: Bill_Abner, ScoopBrady
Re: Game Prices going up for next gen games?
Thanks for the link. As the article says, gaming has been resistant to such iinflation for some time. *IF* the price hike is reasonable -- which for me would be $5 max -- then I suppose I could live with it seeing as how I paid $50 for new NES games at the end of its run. Hard to beat consistency like that.bdoughty wrote:http://money.cnn.com/2004/09/29/comment ... /index.htm
Kind of funny when you look at the upcoming releases and see more $29.99 and $39.99 games then $49.99...
Some are even calling for the prices to go up this fall.
The only games I pay $50 for are sports games anyway (mainly because if you "wait" on them the season will be over). But I have no problem waiting on the Zeldas, Metal Gears and Halos to drop down to $30 or so. Hell, most "B" titles see a price drop of some type within two months.
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I really don't want to see a price increase. I mean, the next-next gen consoles are already going to be expensive. Why should we have to pay more for the software as well? Maybe that's just the el cheapo in me talkin' because I know that I'd most probably pay atleast an extra 10 bucks for the games. Hell, I payed 60 bucks for Madden. 
I haven't read the link yet. But didn't some cart games cost $60 and $70?
The production costs are a lot lower so their margins are higher than in the cart days.
As for retail prices, it looks like these days, only a few titles can maintain a $50 price point for more than a couple of months after release.
Just saw a commercial on EA's Buy 2, get one free promotion. That is in effect a price cut on games that held the $50 price for several months.
I also noticed that in the Gamespot chart, Madden isn't in the top 10, less than 2 months after release. I'm pretty sure that wasn't the case last year or the year before.
This promotion sounds like sales are below their expectations. Usually mail-in offers like rebates are crafted with the expectation that only a certain percentage of people will actually bother mailing in the materials to redeem the offer.
Development costs will go up and if there's a consolidation of publishers/developers, they might be able to have a cartel-like pricing situation. But they will always be competing with other forms of entertainment, including other game platforms (like cell phones) and video and audio media. That should keep prices level for us.
The production costs are a lot lower so their margins are higher than in the cart days.
As for retail prices, it looks like these days, only a few titles can maintain a $50 price point for more than a couple of months after release.
Just saw a commercial on EA's Buy 2, get one free promotion. That is in effect a price cut on games that held the $50 price for several months.
I also noticed that in the Gamespot chart, Madden isn't in the top 10, less than 2 months after release. I'm pretty sure that wasn't the case last year or the year before.
This promotion sounds like sales are below their expectations. Usually mail-in offers like rebates are crafted with the expectation that only a certain percentage of people will actually bother mailing in the materials to redeem the offer.
Development costs will go up and if there's a consolidation of publishers/developers, they might be able to have a cartel-like pricing situation. But they will always be competing with other forms of entertainment, including other game platforms (like cell phones) and video and audio media. That should keep prices level for us.
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davet010
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Prices are high with any new consoles, because they will absorb rafts of development costs as the programmers struggle to get to grips with the new hardware and software, and they don't want to spread that over too long a period, in case the console goes belly up.
After a bit, prices will tend to fall as developers find the short cuts, and consumers display increasing selectiveness as the overall number of games for that platform rises.
Jeez, posting stuff like this is why I shouldn't be in work at 7.30am..I need a holiday
After a bit, prices will tend to fall as developers find the short cuts, and consumers display increasing selectiveness as the overall number of games for that platform rises.
Jeez, posting stuff like this is why I shouldn't be in work at 7.30am..I need a holiday
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fightingcamel
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I can believe that costs are going up. They will need more expertise and that costs money. They will need the best art and pay for the best artists.
Plus with the gaming market growing as much as it did this generation, they are spending more on marketing. There have been more TV commercials for games in this generation than I can remember in previous generations. Not just commercials on some small cable TV channels but on network TV, in prime time. Next thing you know, some games commercials will be aired during the Super Bowl.
But a lot of the production costs are coming from choices they make. Like spending money to develope elaborate soundtracks or licensing music from well-known bands. It's nice to have good music but does it really help sell games?
Plus with the gaming market growing as much as it did this generation, they are spending more on marketing. There have been more TV commercials for games in this generation than I can remember in previous generations. Not just commercials on some small cable TV channels but on network TV, in prime time. Next thing you know, some games commercials will be aired during the Super Bowl.
But a lot of the production costs are coming from choices they make. Like spending money to develope elaborate soundtracks or licensing music from well-known bands. It's nice to have good music but does it really help sell games?
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pk500
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WCO is right: Costs will climb because of the bloated budgets of some of these games. As the video game industry earns more per year than the film industry, we'll start to see blockbuster game budgets, and that cost will be passed to the consumer.
It sucks, but prices will climb. How much of a climb determines whether I stay in console gaming for the next generation or whether I settle for online backgammon and Football Manager 2005 on my PC. Seriously.
Take care,
PK
It sucks, but prices will climb. How much of a climb determines whether I stay in console gaming for the next generation or whether I settle for online backgammon and Football Manager 2005 on my PC. Seriously.
Take care,
PK
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There's no question that advancing technology in new consoles is pushing developer resources to the limit, and that the cost to produce a AAA game has skyrocketed, but I don't believe that the costs should be passed on to the consumer because the business has made enough volume gains to more than offset the higher costs.
1. Margins on actual sales have increased as distribution costs have decreased, so there is additional profit (vs. cartridges etc.)
2. Most importantly, the total market during the BEST DAYS of the N64 was about 1/4 what it is today, and it's only growing. Hollywood can produce $100,000,000 movies (still at least 3 times a AAA game title cost) and sell movie tickets for $10 because there are enough movie go-ers to distribute that cost and still turn a HEALTHY profit. The market for games continues to grow, which means that there are more consumers BUYING games to absorb the costs of additional development resources.
3. Additional revenue streams are appearing, including premium content, 'Platinum' game sales (selling older games 'cheap' instead of losing that business to USED game traders), Online leagues etc., and finally the rising prospect of Internet game delivery(virtually 0 distribution cost!).
4. Pulishers are consolodating (the big boys like EA are buying out the weaker competitors, or helping them die off). This allows publishers to 'hedge their bets'; putting out several games within a given time window knowing that the aggregate performance will be profitable.
$50 per game should remain the ceiling for some time to come, especially since higher costs will likely SHRINK the market (casual gamers and children will buy fewer games) leading to a decline in the overall profit opportunity.
The model is pretty straight forward for the publishers.
- Back at least 3 games from 3 different developers per quarter
- Fund and share resources among development teams
- Demand quality from developers, and don't reinvest in those that fail
- Explore new revenue opportunities in online play/distribution
- Build Franchises through quality sequels (sports games, GTA, Halo)
- Expand the market for succesful games with low-price 'platinum'
- Expand the market for bad games with low-price option
- Use influence to 'bully' console makers into best publishing deals.
I believe the above clearly articulates EA's strategy, and that of many other large publishing houses.
1. Margins on actual sales have increased as distribution costs have decreased, so there is additional profit (vs. cartridges etc.)
2. Most importantly, the total market during the BEST DAYS of the N64 was about 1/4 what it is today, and it's only growing. Hollywood can produce $100,000,000 movies (still at least 3 times a AAA game title cost) and sell movie tickets for $10 because there are enough movie go-ers to distribute that cost and still turn a HEALTHY profit. The market for games continues to grow, which means that there are more consumers BUYING games to absorb the costs of additional development resources.
3. Additional revenue streams are appearing, including premium content, 'Platinum' game sales (selling older games 'cheap' instead of losing that business to USED game traders), Online leagues etc., and finally the rising prospect of Internet game delivery(virtually 0 distribution cost!).
4. Pulishers are consolodating (the big boys like EA are buying out the weaker competitors, or helping them die off). This allows publishers to 'hedge their bets'; putting out several games within a given time window knowing that the aggregate performance will be profitable.
$50 per game should remain the ceiling for some time to come, especially since higher costs will likely SHRINK the market (casual gamers and children will buy fewer games) leading to a decline in the overall profit opportunity.
The model is pretty straight forward for the publishers.
- Back at least 3 games from 3 different developers per quarter
- Fund and share resources among development teams
- Demand quality from developers, and don't reinvest in those that fail
- Explore new revenue opportunities in online play/distribution
- Build Franchises through quality sequels (sports games, GTA, Halo)
- Expand the market for succesful games with low-price 'platinum'
- Expand the market for bad games with low-price option
- Use influence to 'bully' console makers into best publishing deals.
I believe the above clearly articulates EA's strategy, and that of many other large publishing houses.
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matthewk
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This is not about if they can make money, it's about how much money they can make. The article even mentioned that they are even now "testing" the market with game like the Madden collectors edition to see just how far they can push us.
Personaly, I am NOT going to pay $60 for a game. Hell, right now I have a hard time paying $50. I alwayas wait for the $10 gift card deals, or for example I'm picking up ID2004 for $10 as my basketball fix for the year. I would guess that the average price I've paid for a game over the past 12 months is below $30.
Personaly, I am NOT going to pay $60 for a game. Hell, right now I have a hard time paying $50. I alwayas wait for the $10 gift card deals, or for example I'm picking up ID2004 for $10 as my basketball fix for the year. I would guess that the average price I've paid for a game over the past 12 months is below $30.
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I think the next generation games will debut at $50. Remember, the installed base will be nothing compared to the current generation. And Sony has said they will support PS2 for at least another 5 years.
So initially, prices will be high and maybe we won't have the Greatest Hits series until after the first year after the launch. Right now, we are seeing discounting of games that we didn't see 2 or 3 years ago. Often gift cards but chains like Fry's using loss-leader pricing like $35-$40 for new releases to get people into their stores. I ordered BO3 the other day from Playstation.com for under $29 after tax and shipping and BO3 was released just a month ago?
So you will mostly have $50 pricing on new games for the first 2-3 years of the next generation with games which didn't sell quickly falling to Greatest Hits prices after Christmas. But one thing which may be more widespread than this generation could be PS2 new games releasing at no more than $40 and probably closer to $30. Of course, the hardcore gamers won't bother with current generation games once the new generation releases, unless you have backwards compatiblity in the new consoles and the game selection for the new consoles remain weak in the first year.
So initially, prices will be high and maybe we won't have the Greatest Hits series until after the first year after the launch. Right now, we are seeing discounting of games that we didn't see 2 or 3 years ago. Often gift cards but chains like Fry's using loss-leader pricing like $35-$40 for new releases to get people into their stores. I ordered BO3 the other day from Playstation.com for under $29 after tax and shipping and BO3 was released just a month ago?
So you will mostly have $50 pricing on new games for the first 2-3 years of the next generation with games which didn't sell quickly falling to Greatest Hits prices after Christmas. But one thing which may be more widespread than this generation could be PS2 new games releasing at no more than $40 and probably closer to $30. Of course, the hardcore gamers won't bother with current generation games once the new generation releases, unless you have backwards compatiblity in the new consoles and the game selection for the new consoles remain weak in the first year.
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fightingcamel
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I agree with matthewk. I definitely will not spend more than $50 on a game, at least not in the near future. I will wait till it gets marked down, use coupons, or play last year's version before I spend that much.
I actually think that publishers will become less important in the coming years. I believe that digital distribution will become more widespread, allowing developers to directly market their own work. As "Penny-Arcade" says about the current fear of digital delivery:
Imagine that you had to go to a well every time you wanted water. Then, somebody figured out a way to get the water to come out right inside your house! I don't blame them for being scared. Progress is a b*tch.
I think that this fear will lessen and digital delivery will become a standard.
Just my thoughts...
I actually think that publishers will become less important in the coming years. I believe that digital distribution will become more widespread, allowing developers to directly market their own work. As "Penny-Arcade" says about the current fear of digital delivery:
Imagine that you had to go to a well every time you wanted water. Then, somebody figured out a way to get the water to come out right inside your house! I don't blame them for being scared. Progress is a b*tch.
I think that this fear will lessen and digital delivery will become a standard.
Just my thoughts...
I disagree. Publishers will be more important as games require more art, more production values. Guys couldn't really develop polished A-list titles for this generation in their apartments and they'll be less able to do so in the future.
You need publishers to front the money and get access to all these resources. Plus publishers have locked up a lot of the licenses and one thing that this generation proved is that licensed games are the proven formula.
Not just sports licenses but license for movies and TV which cost a lot of money.
Games publishers are becoming like movie studios. And while there's a big indie film movement, if you look beneath the surface, most of these indie filmmakers are tied to studios or indie divisions of the big studios.
Nowadays, independent developers go to the GDC to try to get jobs with big developers or publishers. It would be great if indie developers could make a good, best-selling game on their own, as a labor of love. But games are big business now and publishers fuel that big business with money. They do way more than provide manufacturing and distribution of games. They fund development, secure licenses and probably most importantly, do the marketing, which is more mass media-intensive (i.e. expensive) than ever.
You need publishers to front the money and get access to all these resources. Plus publishers have locked up a lot of the licenses and one thing that this generation proved is that licensed games are the proven formula.
Not just sports licenses but license for movies and TV which cost a lot of money.
Games publishers are becoming like movie studios. And while there's a big indie film movement, if you look beneath the surface, most of these indie filmmakers are tied to studios or indie divisions of the big studios.
Nowadays, independent developers go to the GDC to try to get jobs with big developers or publishers. It would be great if indie developers could make a good, best-selling game on their own, as a labor of love. But games are big business now and publishers fuel that big business with money. They do way more than provide manufacturing and distribution of games. They fund development, secure licenses and probably most importantly, do the marketing, which is more mass media-intensive (i.e. expensive) than ever.
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fightingcamel
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Hmmm...the more I think about it, you may be right.wco81 wrote:I disagree. Publishers will be more important as games require more art, more production values. Guys couldn't really develop polished A-list titles for this generation in their apartments and they'll be less able to do so in the future.
You need publishers to front the money and get access to all these resources. Plus publishers have locked up a lot of the licenses and one thing that this generation proved is that licensed games are the proven formula.
Not just sports licenses but license for movies and TV which cost a lot of money.
Games publishers are becoming like movie studios. And while there's a big indie film movement, if you look beneath the surface, most of these indie filmmakers are tied to studios or indie divisions of the big studios.
Nowadays, independent developers go to the GDC to try to get jobs with big developers or publishers. It would be great if indie developers could make a good, best-selling game on their own, as a labor of love. But games are big business now and publishers fuel that big business with money. They do way more than provide manufacturing and distribution of games. They fund development, secure licenses and probably most importantly, do the marketing, which is more mass media-intensive (i.e. expensive) than ever.
I think that actually writing/programming the game will cost much less. The tools to produce quality games will be more advanced, easier to use, and probably more widely available. (Much like the indie film example. There are some small film studios that produce some quality work.)
However, that being said, as the gaming industry becomes more popular, entertainment, sports, music licenses WILL become more expensive to obtain. Not to mention celebrity endorsements, writers, etc.