Why is every console game 60$ at launch?
- Thread starter beast786
- Start date
AppleBlade
Member
Pricing on Wii games very much follows the model you are advocating. Day 1 pricing on Wii games will vary quite frequently. Though the big titles will run you $50 there are often good games that sell for less on day 1.
androvsky said:
That's a bad example. Ticket prices are set by theaters, which are largely unaffected by the cost of producing the movie they are showing. The cost of big budget DVDs is less because it costs less to make the DVDs since the one-time mastering costs are amortized over a larger number of sales.
sixteen-bit
Member
Battle Fantasia sold fewer than 5000 copies its first NPDAstroLad said:
This chart always bothered me.beast786 said:
45% of a each unit's cost doesn't go to art and programming, that money just goes straight to the publisher and pays off development costs until either the game stops selling or the company pays off the entire development budget, at which point that 45% per unit is just pure profit.
In light of that, the publisher profit slice also makes absolutely no sense, unless you only sell one copy of a game and 45% the price of that one copy was your entire development budget.
Jive Turkey
Unconfirmed Member
Some of us do. I have yet to pay $60 for any game this generation that didn't come with some sort of peripheral or something.elektrixxx said:
beast786 said:Every game has different budget, marketing, PR etc etc.
"AAA" games with budges in 10-20 millions and higher quality are sold same as low budget crappy games?
Thats like having BMW 5 series sold same price as Honda Civic?
So does activision and IW have a legit right to sell a AAA game with higher quality and budget for a higher ?
Below Picture is from ARS.. There is no WAY its same for every game when it comes to Retail Programming and production
you charge the price the market is willing to bear. The price is $60 because people are willing to buy it at that price. When it doesnt sell as much, the price is reduced and more people buy it and then that is also reduced later to get the remainders.
basically, the company gets to make money off the people willing to pay $60 to get it on launch day. They could sell it for $50, but why not charge $60 since people are willing to pay that much.
sixteen-bit
Member
I wish Xbox Originals wasn't defunct so this could get released. I'd love to see some new life breathed into this gem. At least it's BC.IPoopStandingUp said:
Best $20 new release, ever.
Sohter.Nura
Member
You wanna know why new games are at 60 a pop?
Because people buy it :B
Because people buy it :B
Jive Turkey
Unconfirmed Member
Well...While the combat is technically card-based it really isn't anything like the other two.AstroLad said:
milanbaros
Member?
deepbrown said:
Yeah, I'm not sure whether its the internet or just increased competition/margin but games seem to be so much cheaper now than they were during the playstation and ps2 days and you never have to pay anywhere near rrp.
I <3 Memes
Member
soul creator said:I just want another AAA game to release at $20
*sniff* we'll miss you
The curse of T.O. strike again. Not only does he destroy the chemistry of every team he's on, he also destroys every game that puts him on the cover. Coincidence? I don't think so.
EternalGamer
Banned
beast786 said:
Actually, it's hardcore gamers that probably think that. We have been trained from years of marketing and gaming journalism to crave the "cutting edge" with emphasis on technological advancements in gaming in terms of graphics, environments, etc. If a game has a lower cost, we tend to think it probably isn't an amazing, orgasm inducing, mind fuck of a thing in terms of production values and we certainly care about production values (just look at all the distaste for the Wii, myself included).
It also has to do with the fact that people who are already interested in a game will pay $60 and not enough NEW people would be interested at $40 to make up the difference in profit.
In short, the gaming consumer need to wean his or herself off the "latest and greatest" mentality. Then the industry will respond in turn.
Call me arrogant but are those development budgets hyped?
I work in advertisement agency and i know how in every part of the production cost of something gets higher without any excuse. For example if we gonna shoot a movie at some rental place and they charge 300 bucks we say 500 to client lol. and production company pays like 30 for an hour for lighting setup but they charge 50 to us we charge 70 to client. It always goes like that besides we also charge client for the work beside the cost.
I always thought entertainment development costs are very fake and hyped a lot. There is no way a game should cost like 30 million bucks!
or am i just being arrogant? I
I work in advertisement agency and i know how in every part of the production cost of something gets higher without any excuse. For example if we gonna shoot a movie at some rental place and they charge 300 bucks we say 500 to client lol. and production company pays like 30 for an hour for lighting setup but they charge 50 to us we charge 70 to client. It always goes like that besides we also charge client for the work beside the cost.
I always thought entertainment development costs are very fake and hyped a lot. There is no way a game should cost like 30 million bucks!
or am i just being arrogant? I
Steve Youngblood
Member
Umm... no. Manufacturing enough supply is never an issue with software unless they artificially make it so. Unless you're talking about really niche stuff, I've never had trouble finding games that are relatively new.neptunes said:
The reason why expensive-to-make games do not necessarily cost more than cheap-to-make games is simple and straightforward, real Economics 101 stuff. Price is determined by demand and the price of production of a copy-limited item does not necessarily impact its demand. In the classic example it only cost a few hundred dollars (at the very most) in materials and labor to create a masterpiece by Van Gogh. This does not imply that the Van Gogh should be sold cheaply, or at any rate cheaper than some tripe by Thomas Kinkade that may have cost ten times the material and labor to create.
The reason why new console games, across a wide range of quality of experience, playtime, or replayability measures tend to debut at the same price is a much more interesting question. Its source goes back to the copy-limited nature of the goods being sold, but importantly, these goods are not copy-limited to a very small number (such as 1, in the case of Van Gogh's Starry Night). Video games under copyright (legally) are plentiful but not limitless. This condition allow the creation of consortiums which can control the quantity and distribution of copies of a work. In the console video game industry these consortiums include publishers, distributors/retail front-ends, and hardware manufacturers (in their role of platform licensers). In practice, in the US, the platform licensers have played a dominant role in the organization of these loosely-affiliated consortiums- the reasons for this are complicated and can be discussed later.
The consortiums have decided it's in their best interest to sell most new games on a given platform at a standard price. The business rationale for this is complex and maybe not completely rational or well demonstrated. Nevertheless, that's the reason it happens and will continue to happen unless the consortiums change their minds on what is in their best interest or the consortiums break apart.
EDIT: There are other examples of limited goods being sold without regard to normal supply-demand market pricing. Among them are tickets to sporting events (the presence of scalpers in front of the stadium demonstrate that tickets are frequently sold at cheaper prices at the box office than the market could bear) and movie theaters (on opening weekend at any given theater you pay the same amount for The Love Guru as The Dark Knight). The organization of the sellers and producers that set the prices are different than the video game case but the general principle is the same.
The reason why new console games, across a wide range of quality of experience, playtime, or replayability measures tend to debut at the same price is a much more interesting question. Its source goes back to the copy-limited nature of the goods being sold, but importantly, these goods are not copy-limited to a very small number (such as 1, in the case of Van Gogh's Starry Night). Video games under copyright (legally) are plentiful but not limitless. This condition allow the creation of consortiums which can control the quantity and distribution of copies of a work. In the console video game industry these consortiums include publishers, distributors/retail front-ends, and hardware manufacturers (in their role of platform licensers). In practice, in the US, the platform licensers have played a dominant role in the organization of these loosely-affiliated consortiums- the reasons for this are complicated and can be discussed later.
The consortiums have decided it's in their best interest to sell most new games on a given platform at a standard price. The business rationale for this is complex and maybe not completely rational or well demonstrated. Nevertheless, that's the reason it happens and will continue to happen unless the consortiums change their minds on what is in their best interest or the consortiums break apart.
EDIT: There are other examples of limited goods being sold without regard to normal supply-demand market pricing. Among them are tickets to sporting events (the presence of scalpers in front of the stadium demonstrate that tickets are frequently sold at cheaper prices at the box office than the market could bear) and movie theaters (on opening weekend at any given theater you pay the same amount for The Love Guru as The Dark Knight). The organization of the sellers and producers that set the prices are different than the video game case but the general principle is the same.
The BMW vs. Honda Civic analogy is heavily flawed. The two products are made by two large companies that both have large enough budgets to market their product as they please. BMW willingly sets a higher standard of luxury for a higher price, understanding that they are reaching out to a smaller target market than Honda. Honda willing sets a lower standard of luxury for a lower price, understanding that they are reaching out to a smaller target market than BMW.
This reasoning does not apply to digital media such as music, movies, and video games. You don't necessarily get to pay a lower price for an album, movie, or video game because the artist, director, or developer was working on a lower budget.
Honda, while offering a cheaper product, still has large budgets and was able to offer that low price through the lack of including expensive features, and also through the efficiency of specialization. They have entire departments dedicated to marketing, R&D, etc. So the overhead is a relatively small percentage of their budget. Offering one more model Civic is not that costly (relatively) to them, as they already have the needed personnel and departments in place from other models they previously have offered.
While independent or low budget artists/directors/developers also typically produce games without "expensive features," the relevant similarities basically stop there. They do NOT have the large budget that Honda does for the specialization and departments that offer great efficiency. Cranking one more album/movie/video game is not as simple as Honda cranking one more model Civic. A low budget means they need to either market their product on their own without professional publishers/marketers, or convince 3rd party professional publishers/marketers to help them. And if they do, it's for a price.
Thus, a Honda Civic is not the equivalent to a low budget game. It may be a low budget product, but it came from a high budget company. A low budget game comes from a low budget company that does not have the tools to produce their products at the same level of efficiency as a higher budget company.
This reasoning does not apply to digital media such as music, movies, and video games. You don't necessarily get to pay a lower price for an album, movie, or video game because the artist, director, or developer was working on a lower budget.
Honda, while offering a cheaper product, still has large budgets and was able to offer that low price through the lack of including expensive features, and also through the efficiency of specialization. They have entire departments dedicated to marketing, R&D, etc. So the overhead is a relatively small percentage of their budget. Offering one more model Civic is not that costly (relatively) to them, as they already have the needed personnel and departments in place from other models they previously have offered.
While independent or low budget artists/directors/developers also typically produce games without "expensive features," the relevant similarities basically stop there. They do NOT have the large budget that Honda does for the specialization and departments that offer great efficiency. Cranking one more album/movie/video game is not as simple as Honda cranking one more model Civic. A low budget means they need to either market their product on their own without professional publishers/marketers, or convince 3rd party professional publishers/marketers to help them. And if they do, it's for a price.
Thus, a Honda Civic is not the equivalent to a low budget game. It may be a low budget product, but it came from a high budget company. A low budget game comes from a low budget company that does not have the tools to produce their products at the same level of efficiency as a higher budget company.
PopcornMegaphone
Banned
minus_273 said:
Thank you. That pie chart isn't great.
Kai Dracon
Writing a dinosaur space opera symphony
Maybe it's faulty memory, but I recall during the mid-90's that big retail chains like Best Buy frequently had less markup on software than we see today at the same chains.
I clearly recall buying most of my PS1 games at Best Buy circa. 1997, because titles like Soul Edge and Tekken 2 were released at $34.95 in my area (Oklahoma). There was rarely a $50 game. Most of the PS1 and Saturn games were like $40 - $45. Ironically it was 3D0 games that were, for a while at least, $50 a pop, some were a shocking $60, because of, I figured, next-gen tax.
I remember really appreciating the CD era because I had been used to SNES games costing $70 a piece even at Best Buy. For a while at least, publishers were living up to the promise that CD media would drastically lower software prices.
People may cite inflation evening things out, but for the bulk of the PS2 era up until just a few years ago, game prices fell to $39.95 for lots of major titles with only a relative few $49.95 titles (Square-Tax is the same across every generation, lol)
I clearly recall buying most of my PS1 games at Best Buy circa. 1997, because titles like Soul Edge and Tekken 2 were released at $34.95 in my area (Oklahoma). There was rarely a $50 game. Most of the PS1 and Saturn games were like $40 - $45. Ironically it was 3D0 games that were, for a while at least, $50 a pop, some were a shocking $60, because of, I figured, next-gen tax.
I remember really appreciating the CD era because I had been used to SNES games costing $70 a piece even at Best Buy. For a while at least, publishers were living up to the promise that CD media would drastically lower software prices.
People may cite inflation evening things out, but for the bulk of the PS2 era up until just a few years ago, game prices fell to $39.95 for lots of major titles with only a relative few $49.95 titles (Square-Tax is the same across every generation, lol)
Come to think of it, me either. The highest I have paid for a game this gen is $90 for Wiifit. Im so happy that I waited for other games to drop in price too, cause the ones I thought I was going to buy at launch for $60 didnt turn out so well after a rent. So I resort to not buying any games for my 360 at launch until its $40 or under.Jive Turkey said:
EternalGamer said:
I don't know my wife just compares the price of a game to the others around it to determine quality. I was looking to pick up mirror's edge for 20 bucks at gamestop and was like i heard this is good but she was like then why is it only 20 bucks. I can't speak for the rest of the world but a higher price is usually associated with better quality in almost all products in the U.S.
gtj1092 said:
this is true, the higher the value, the better the perceived quality is. i think people have debated about it quite heavily.
altho since the quantity of games being released have increased soooo much, price drops are much more common after 2-3 months which is good for us as consumers. we get a good game for a fair price. thank you online stores!
But would you find a game that appeals to you? If you wanted a puzzle game and there were only 1 or 2 mediocre puzzle games at launch, what are the chances of you buying those same games later on in the generation(let alone at $60) especially when there would be more puzzle games available.Steve Youngblood said:
It's market skimming
Edit: I'm tottaly confused, I thought the thread was referring a console launch, disregard what I said.
I remember GTA3 on ps2 being a lot cheaper at launch than the average price for new games at the time.
I remember also me playing being like "WTF how much did they spend to develop this thing, and why did they sell it at that price?"
Well it was cheap here anyway, dunno for the rest of the world. What was the US price?
I would be curious to see if the matter was discussed in interviews back in the day, and the logic behind it (well it was more than successful anyway)
I remember also me playing being like "WTF how much did they spend to develop this thing, and why did they sell it at that price?"
Well it was cheap here anyway, dunno for the rest of the world. What was the US price?
I would be curious to see if the matter was discussed in interviews back in the day, and the logic behind it (well it was more than successful anyway)
Seems kinda straight forward to me. A game with a large development budget is perceived to have a large market. Selling a lot of games at $60 makes them back the substantial sum they invested and some profit. A lower budget game doesn't have the same market. Lower budget, lower sales and the same price to break even at the end of the day (and hopefully make some money too).
mysticstylez
Banned
Also why is every SquareEnix DS game 40 fucking bucks at launch?