The Price is Wrong
November 20th, 2007Everyone knew that Halo 3 would continue to be a cash-cow for MS, not just with good retail sales, but with downloadable content. We may have even had a faint idea, or at least a suspicion, that the content would probably be overpriced. And so it has come to pass.
Microsoft has announced that the Halo 3 “Heroic Map Pack”, which includes 3 maps, will be available on December 11th for $10. That seems to be just a bit on the pricey side for me, and even based on past Halo experience is a pretty big jump. The last map pack for Halo 2, which came with 2 maps, debuted April 17th for just $4, or $2 a map. If I’m not mistaken, the earlier map packs followed a similar pattern, with a retail disc that contained 9 maps (and a few other goodies) for $20. The increase to $3.33 per map represents a 67% increase in price per map, far greater than the 20% next-gen “tax” that we’re now paying on $60 games.
Of course, like the other ones, if you’re patient, you can get the maps for free in a few months as well, but it may cripple your ability to play the game in the meantime. If you play a lot of custom games with people that you don’t necessarily know personally, you can pretty much expect to need the maps, as people will definitely be playing them (unless there is a mass boycott, which, given the ridiculous sales and the comments I’m already seeing, I’m guessing not). If Bungie adds them into your favorite matchmaking modes, you’ll be prevented from joining those as well. Then of course, once you get your free maps, don’t expect that you’ll be able to play your favorite modes much again, since the next map pack will be coming around the same time and could similarly require you to have it for your favorite game modes. I really hope that Bungie just creates a few “new maps” lists, or figures out a way to have people with maps and no maps co-exist, as anything otherwise would sort of feel like extortion just to continue playing the game you’ve already been playing.
While I’d love to have cheaper map packs, I understand why Microsoft is doing this. Most of the comments I’ve seen on the blogs have ranged from “Definitely picking this up” to “Seems expensive, but I’ll probably be getting it.” I haven’t decided yet what I’m going to do about it, although it seems unlikely that I’d pick it up on the first day. I’d most likely get it if I ended up in a situation where I was in a custom game I wanted to play in, but was getting booted because I didn’t have the right maps. Assuming they don’t totally screw people and require the maps for all of the matchmaking modes, I’ll probably just stay away from custom games I’m not controlling.
But it got me thinking, why doesn’t downloadable content like this drop in price every month or two, and not just go from $10 to free overnight? Consumers are quite aware (and theoretically comfortable) of the “early adopter” fee. Whether it’s cell phones, computers, consoles, or software, if you want to be the first to have it, you have to pony up the full asking price. But over time, consumers know that the price tends to fall so that new customers can pick up the product. Wouldn’t it make some amount of sense for MS to drop the price of the content, say, $2 each month until its free? That way, they could continue to attract new customers to download the pack throughout it’s non-free life. I bet they would get a LOT more people to buy it at, say, $6 in a couple months than would be willing to pay $10 at any point during its sales period. Why doesn’t anyone do this? Do these packs really have to go from $10 to free overnight? How many buyers are they really getting, say, the month before it goes free?
Posted in Commentary, Jeff, Microsoft, Xbox 360 |
November 20th, 2007 at 9:07 pm
This is one of the huge flaws with a downloadable future in console gaming. The huge financial savings of going DL and not retail is mostly absorbed by metacompanies and publishers, not consumers.
November 20th, 2007 at 9:34 pm
It is a bit pricy….but definitely not the worse. i just got RFOM…and the map pack for that game costs 4 dollars a map. And it will never be free.
November 21st, 2007 at 1:14 am
I think this is one of those “what the market will bear” situations. They can charge whatever they want for Halo 3 DLC, and they know that.
And yeah, as was said above, this is one of the dangers of making DLC possible. I love the idea of DLC, but I hate what I know they’re going to do with it.
November 21st, 2007 at 2:57 am
But that’s almost not my point here… I think it’s pricey, but as you said, the market will bear it. But they’d sell even more of it if they just reduced the price on a monthly basis, rather than just flip a switch and make it free one day. In other words, they’ll get a certain number of people that will no doubt pay $10 over the course of time that it will be available for purchase, but it will obviously decrease over time. Why not basically “step down” the price over time so they can make money off of the people who may not be willing to pay $10, but would be willing to pay, say, $8 or $6 or $4 or whatever… They’d make MORE money this way, not less.
November 21st, 2007 at 7:47 am
Maybe you’re right… if so, I hope it never occurs to them.
Really, though, very nearly the entire Halo 3 community will buy them on day one.
November 21st, 2007 at 12:48 pm
Jeff,
Why wouldn’t people just wait to buy it until they know the price is dropping? Look at Apple… they irritated lots of consumers with the iPhone price drop and ended up having to refund a lot of money to their original customers, who felt ripped off by the decrease. They might have been better off leaving the price high.
I agree that some discounting would make sense - maybe going from $10 to $5 after 6 months to free - but I don’t think a sliding scale would be particularly feasible.
November 21st, 2007 at 7:43 pm
There’s a big difference between dropping the price of an add-on $2 a month and dropping something like the iPhone $200 in less than 2 months since it’s release.
That being said, people bitch about everything, but the fact is that you pay an early adopter fee in just about every industry.
I understand what you’re saying about people waiting, and I agree that that is a consideration. My point is that they’d still come out ahead… The people that end up waiting for the price to drop would be easily offset by the people who would decide to buy it at a lower price (that wouldn’t have bought it in the first place).
November 21st, 2007 at 11:39 pm
Not as big a difference as you suggest… $2 off of a $10 purchase is a 20% discount and $200 off of a $600 purchase is a 30% discount. Those are pretty close. The fact that the absolute numbers are wildly off is rather irrelevant.