$60 Games
July 26th, 2007This showed up in the comments yesterday, and now eat.sleep.game has posted on it, so I thought I’d weigh in on a proper thread. I have mixed feelings about game price increases. But in the end, although I don’t love paying $60 for games, I can understand why pricing would be increasing. And as long as it plateaus at this level for a while, I can’t get too angry about it.
First off, as Jeff mentioned, $60 titles aren’t really new - I paid $70 for Street Fighter 2 on the SNES, and that was quite some time ago. The new part is that $60 is becoming the base. But games have been $50 for as long as I can remember - stretching way back into the early 90’s. At 3% annual inflation, they should be pushing $70 a pop ten years later… that they haven’t is a testament to the power of gamer expectations.
At the same time, the cost of producing ever-more advanced titles is also increasing. You can argue over whether or not you wanted HD in the first place, but is it really contributing that much to the price relative to all the other development factors that need to be taken into account? I would suspect that it’s a significant but not dominant issue.
The other reason I’m not so concerned is because options for buying discounted games have never been greater. I rarely pay $60 for any game - buying used titles, renting, borrowing from a friend: all of these are available at both bricks and mortar stores and online. And if you’re willing to wait a few months, you can get a great number of games new at a substantial discount off their MSRP. As a result, I tend to pay list price just for the AAA titles I want right now, and a slight premium for highly-demanded games seems eminently reasonable to me.
It is a little troubling that games are often cheaper in their PC iterations than on their console counterparts. But I’m not convinced that this reflects a real injustice. There are factors that impact computer gaming that aren’t required on the console side: for example, running a PS3 game at full resolution on a PC requires substantial investment in graphics cards, processor, and related peripherals. At the same time, the potential for bugs, incompatibility, and general frustration is often quite a bit higher as well. So I think you’re really getting a discount for the incremental costs there. (After all, if you’ve got both a console and a PC - and people are more likely to have the latter than the former - why not just buy the PC version?)
So yes, I’d love to have $50 games back again. But I’m not going to get too worked up about the era of the $60 title - at least, not if the price doesn’t start jumping every generation.
Posted in Business, Geoff, Industry, PC, PS3, Xbox 360 |
July 26th, 2007 at 1:26 pm
But what about the fact that gamers buy less, when prices rise? It’s not as if wages are not stagnating [thank you, Congress!! No, really...], so gamers sacrifice buying Zack and Wiki-like innovative games, so as to buy the shitload of $60 AAA games cramming down the Fall 07 pipe.
And also, I mentioned that renting and used games markets are not good for developers and publishers, for obvious reasons.
PS: Downloadable games are not the answer, but i think we already talked this one ad nauseum.
July 26th, 2007 at 1:30 pm
And not to mention console prices. Many PS2 owners - hell, over 50% of all hardcore gamers - have never payed for a console for more than $200.
July 26th, 2007 at 2:04 pm
laesperanzapaz,
No one’s forcing people to buy $60 titles, nor are they “crammed down people’s throats.” If people don’t think the AAA titles are worth it, they wouldn’t buy them. There’s always the option to forego a $60 title and buy a cheaper $50 title instead.
While it is true that gamers generally buy less when prices rise, publishers aren’t optimizing the number of titles sold, they’re optimizing their profitability, which can be very different.
I’d agree that used games and rentals aren’t necessarily great for developers, but why can’t gamers just wait until their retailer discounts the game? As a previous blog post mentioned, game prices generally drop in price by 30%-50% just 3-6 months after release (excepting the most demanded AAA games). From the publishers’ perspective, it allows them to get the best of both worlds - gamers who need to have the game right now get it for full price, and more price-sensitive purchasers are willing to wait a little while to play.
July 26th, 2007 at 2:38 pm
I think it takes a bit longer for the actual retail price of a game to come down. Resistance, for instance, is still at $60. Sometimes stores start to discount them at various times, but in general if you just want to randomly order something from Amazon or walk into a store, I think the magic number is somewhere in the 8-12 month range.
July 26th, 2007 at 7:36 pm
“And also, I mentioned that renting and used games markets are not good for developers and publishers, for obvious reasons.”
This may not be quite on topic, but I’ll say it anyway.
The above statement is A MYTH!
I hear this all the time, and not just about video games, i.e. that somehow used games sales/markets are bad for developers/publishers etc. This is absolutely untrue. I speak from experience on this one. In my industry (selling used Cisco, go figure) people say the same thing, that business’ like mine are hurting Cisco’s sales of new products. It’s utter nonsense. The immediate thought is that someone, someone buying something used, at a fraction of new price, would instead buy a similar new item from the same manufacturer if the used item was not available. This is absolutely false, therefore the sale of the used item is a direct loss of sale for the manufacturer.
I have a huge number of customers who simply can’t afford new. If used products were not available, they would buy a cheaper competitive product in many cases. So why is this good? Here’s why. The used market, buying and selling used Cisco (or games) creates demand for a product and raises consumer awareness. It adds value to the NEW product. Imagine if all disc based games had unbreakable DRM on the disc, such that you could never sell or give the copy to someone else after you have finished with it. Wouldn’t this diminish the value to you as a consumer? I would NEVER buy a $60 game if I knew I could never resell it (or at least have the option to do so) and get some of my money back. Many people buy new games, play them and sell them and then use the money to get more NEW products. Without being able to sell the used product, the consumer would never be able to supplement the buying of another NEW product. In this situation, the existence of the used market, actually enables and helps fund the growth of the new market.
Back to my previous point of the raised consumer awareness. There are many gamers who simply can’t afford (or won’t pay for) $60 games. But what happens is, they might buy a used copy of, say, Need for Speed for $10, then if they love it (its possible!), it may inspire them to later save for the new version coming out next fall. Without the chance to try the game at $10 used, they would never know how exciting the franchise is and that maybe it’s worth $60 for a new installment.
I could go on about this for DAYS, because it very directly relates to my livelihood, but trust me, used games sales (used ANYTHING sales) do NOT hurt the companies making new games. In fact, given enough time to discuss the matter, I’m confident I could convince you that used games markets HELP more than they hurt.
July 26th, 2007 at 9:33 pm
Well, sir, I was going to respond with a well-thought out 20-page thesis essay myself, until I realized you stumped me.
You win this round…. *waves white flag*
…for now.
July 26th, 2007 at 9:45 pm
I apologize if it appeared that I was trying to “win” anything. I wasn’t. I just wanted to dispel a common myth, but I felt some information was required to back up my position. That and, like I said, this is a matter I can speak on at length. I probably over did it.
July 27th, 2007 at 10:04 am
Jeff -
I think Resistance is a bad example - it’s the flagship title of the PS3. AAA titles always take a while to drop, and when they’re the must-have for a system (like Gears was for the 360) it takes quite a bit longer. So you have to pay a premium for those games.