$60 games = inevitable

koam

Member
Next-Gen game prices are expected to soar!!
Posted on March 16 2005 - 14 Reads

Patrick Seitz

The next generation of console video games will boast high-definition graphics -- and higher retail prices.

Analysts say the transition to new consoles offers a long-overdue opportunity for publishers to raise prices. New games that sell for $50 now could go for $60 when the consoles come out, starting in November.

"Everybody (in the industry) wants to see a price increase," including game publishers and retailers, said Arvind Bhatia, an analyst with Southwest Securities. "So now it's a matter of 'Let's try this out and see how consumers like it.' And if it sticks, then you'll see a bump."

Activision, the maker of top-selling games featuring Spider-Man and skateboarder Tony Hawk, intends to raise its wholesale prices by $10 for next-generation software. Consumers will be getting more hours of entertainment for the extra money, says Robert Kotick, chief executive of Activision.

"We haven't raised prices as an industry in 20 years," Kotick said. "Look at the movie business as an analogy. You're not getting any more hours of entertainment -- it's the same two hours of a motion picture -- and yet you're spending twice as much as you did 10 years ago."

Game development costs could jump 50% with the new consoles, says P.J. McNealy, an analyst with American Technology Research. That means new games would cost $10 million to $15 million to make.

"There's definite consideration for higher starting price points (for new games) -- $54.99 or $59.99 -- because development costs are higher," McNealy said. Game publishers feel there will be "more perceived value" to the new games because of their more realistic visuals and richer online game play, he says.

Analysts expect Microsoft to be first out with a new console, Xbox 2, in November. Sony likely would follow with its PlayStation 3 machine in May 2006. Nintendo also plans to come out with a new console in 2006 as a follow-on to its GameCube device.

Gamers will be willing to spend more for premium titles on the new consoles, Kotick says.

"People want to play the great games. There doesn't seem to be a lot of price sensitivity to paying for the great games," he said.

Game publishers are focused on the next generation of consoles because software sales for the current generation have peaked, says Anthony Gikas, a Piper Jaffray analyst.

Video game sales overall will be flat this year compared to last, Gikas says. He estimates console game software sales will fall 11% and PC game software sales will fall 8%. The main item propping up the industry is sales of games for handheld devices, such as Nintendo's Game Boy Advance and its new Nintendo DS.

Handheld game software sales could jump 66% this year, depending on how successful Sony is with its new PlayStation Portable. The PSP, already on sale in Japan, is slated to hit U.S. stores March 24.

Total video game sales won't pick up until the second half of 2006, Gikas says.

He forecasts 5% to 10% sales growth overall next year, with no growth in console software sales. He sees a 48% increase in handheld game sales and a 5% decrease in PC game software sales.

The industry will be back on its growth path in 2007, with 25% or more sales growth, Gikas says.

In 2004, video game software sales in the U.S. rose 4% to a record $7.3 billion, says the Entertainment Software Association.


The transition to the next-generation consoles will be good for the top four independent video game publishers -- Activision, Electronic Arts, Take-Two Interactive Software and THQ, analysts say.

"The big are going to get bigger. The midsize companies are going to struggle. And the small publishers are going to go out of business," Gikas said.

The big four have the established brands, experienced managers and financial wherewithal to invest in big games and acquire new licensed content.

"No one else has any money to go out and compete for the next Harry Potter brand that comes along or the next Lord of the Rings or the next Spider-Man," Gikas said. "These four guys are going to get them all."

All four have been busy cutting licensing deals and acquiring game developer studios in recent months.

Activision bought game developer Vicarious Visions in January. In February, it secured the game rights to DreamWorks Animation's upcoming movie "Shrek 3."

EA locked up exclusive rights to several major sports properties recently, including the National Football League and ESPN. EA also invested in international game developer UbiSoft Entertainment in February.

Take-Two reached exclusive license agreements with Major League Baseball and its players in January.

That same month it bought sports game development studio Visual Concepts Entertainment and its wholly owned studio, Kush Games, from Sega Games.

THQ acquired developer Blue Tongue Entertainment in November. Last year, it renewed license agreements with Pixar Animation Studios and Nickelodeon, a unit of Viacom's MTV Networks.

http://www.nintendospin.com/article891.html
 
"Fuck them. What's inevitable is that I'll buy even less games if this happens, and become even more of a cheap-ass gamer."

That's exactly what I was thinking, it's sad but true.
 
"The big are going to get bigger. The midsize companies are going to struggle. And the small publishers are going to go out of business," Gikas said.


NOT ON THE REVOLUTION!

The best idea will win, not the biggest budget!

ALL HAIL IWATA!


gdc-2005-iwata-keynote-transcript-20050310043006907.jpg
 
Mainstream movies generally cost $50,000,000-$100,000,000 to make these days, but even if you factor in both the movie ticket and the DVD, it only ends up costing the customer $30. The game industry is just being greedy.
 
The $60 price point is a bad idea, and it's doomed to hurt sales of titles IMO. SOME permier titles like a Madden might get away with it(fanatics will buy anything), but most people are gonna bulk at it, I think.... I hope.
 
I'm fine with $60 AAA games. But that means companies have to stop flooding the market with crap. Studios that miscalculate are going to go bankrupt trying to sell crap games for that much.

This price point will also speed up piracy and drive sales of DVD and bluray writers and HDLoader clones.
 
All the more reason for me to stick with the current consoles, PSP, and PC, until the dust has settled and there are nice libraries with better prices.
 
Fuck them indeed.
And what about the "time of play vs cost" !?!?????
Gamers are still looking for LONG games instead of GOOD games? bad bad bad. I welcome 15 hours chef d'oeuvre ANYTIME.

Oh yeah and RPG shouldn't be more than 60 hours. (just felt like sharing the though)
 
i simply won't buy a console on which most games cost $60. i don't like spending more than $40 on a new domestic release (if i have to buy something that's just come out, i get it cheap at fry's or gamerush). cheap-ass solidarity!
 
Wyzdom said:
Fuck them indeed.
And what about the "time of play vs cost" !?!?????
Gamers are still looking for LONG games instead of GOOD games? bad bad bad. I welcome 15 hours chef d'oeuvre ANYTIME.

Oh yeah and RPG shouldn't be more than 60 hours. (just felt like sharing the though)

I prefer both, actually. I like the recent habit of making action-adventure games with some RPG elements last about 20-25 hours on first playthrough. Some of my favorite games of the past year fall into this category, like MGS3, RE4, and Shadow of Rome.

They're just long enough so you can enjoy them without getting bored and since replays allow you to skip cutscenes and whatnot, another quick play through can be had in a few hours.
 
Longer doesn't necessarily mean better.

And even a AAA game might get boring after a while. After the uniqueness has worn off, the game might just get tedious. It's about being fresh and new and engaging over a decent amount of time. Pikmin 2 is a great game for me, but I am having trouble finishing it because it's lost that sparkle it had after the first 20 hours.

More is more, but it doesn't mean it's better that way. If the market shifts like this, I am going to go into cheap gamer mode and simply buy less games or wait till the price drops on them.

What the market needs is more penetration is all. If they can sell more units, still at 50 bucks a pop with the same profit percentages per unit, they make more money.

Fucking greedy bastards.
 
Eh, figures. The DS and PSP have upped the prices in the portable market for hardware and software and I don't see many people complaining. Don't see why the same wouldn't apply to the consoles.
 
I've been preaching about the dangers of a price increase for awhile. Developers and publishers might be banking on the increase next generation, but there's going to be a rude awakening for many if this is the route that most will take. Not even a handful of publishers will be able to get away with an increase now.

How many of us are actually paying full MSRP these days? Companies need to look at that before they shoot themselves in the face with greed.
 
I think the $49.99 price point for standard game is pretty much set in stone with consumers for the time being. Publishers go over fifty bucks at their own peril, it's like the $299 ceiling for a console. Anything over that risks sacrificing significant sales.

Exceptions are "special editions", which have been proven to move at $55 or $60, and games that include extra accessories like SOCOM, etc. But some analysts and publishers are taking the success of limited editions to mean that the market is ready for a $10 push on game prices across the board.

I don't think that's the case. For a special edition to exist, there has be be a regular copy of the game to be differentiated from. What makes an SE attractive is a perceived extra value and content beyond a more pedestrian copy of the game. Otherwise there's nothing to disguise the naked price hike that it is. And consumers will take notice.

As far as jacking up prices on "must have" games like Madden and GTA, I also think it's a bad move. Sure, it's extra revenue, but at the cost of bad will from the fans.
Theoretical Scenario:

For football, last year you had ESPN 2K5 at $20 and Madden at $50. Let's say this fall there's only Madden 2K6, and it's selling for $60. Even Joe Sixpack is going to scratch his head and say, "Sixty dollars? Ten more than any other game? Well, where's that there ESPN game for $20?" The game clerk is likely going to explain that EA bought themselves out of competition and there's no more ESPN. It's not going to take a genius to put two and two together and realize EA is shaking him down for an extra $10 or $40 more than he paid for the same game last year.

Now he might still walk out of the store with that game, but he's also going to walk out with a bad impression of EA that will influence future purchases of their games.
 
Wow.

"Hey, 95% of games are selling below expectations... Let's make them more expensive!"

I can see doing this on guaranteed-to-sell titles, like your Halos, Maddens, and Final Fantasies. But if B-list games are all tanking and seeing price drops in a few months now at $40-50 (as they are, more than ever), raising the price is not going to trigger some nutty reverse-psychology shift to get people buying. Maybe for launch titles, as those sell regardless, but once the libraries expand, this shit will certainly not stick.

I love how they reference the movie industry, yet they don't even look at how it thrives. 20m dollars is nothing in the movie industry, that can be made back easy... and why? Because movies are affordable, people that want to see a movie can justify the cost, many times even if they're only halfway interested in the concept. Games, while they dont have as much of a market, still have a much bigger one than what they're reaching. There are mow many millions of PS2 owners? And yet a game doesn't even have to break a million units to be considered a huge success. Most games don't even get near half a million in their entire life on the shelf. This isn't the signal of a price point that is working for most games, and a market whose customers feel that the products are reasonably priced.
 
dynamitejim said:
Eh, figures. The DS and PSP have upped the prices in the portable market for hardware and software and I don't see many people complaining. Don't see why the same wouldn't apply to the consoles.

There are some of us that have complained. I'm one of those critics. I won't pay more than 30 dollars on a handheld game. That's works in Nintendo's favor sense their price structure resembles the GBA. Third parties, on the other hand, aren't going to get my cash if they continue on that path. I'm not sure where Sony's PSP prices are going to be, but I hope they follow Nintendo on the price range as well.
 
I will wait for the prices to drop to $20, or till a game hits the greatest hits. To me this game prices haven't changed in over 10 years, so we need to raise the price is BS. Some Snes and Genesis games did cost $60 to $70. When the PS1 first started I remember alot of games costing $60. It was a relief when you could finally get some games for $4o in the late PS1 era. I cna see more people not buying game, especially the casuals. This stunt may take down the game industry.
 
Like I've said before, Nintendo would be wise to lower royalty fees instead for 3rd parties to provide them with incentive to maintain the $50 price range. Lower software prices will help Nintendo against Sony and MS if they do go with the $60 route.
 
Belfast said:
I prefer both, actually.

I hear you of course. I meant that it's better to be triple A with 15 hours instead of so-so 25 hours game.
Everybody thinks they are making good games when they make it and truth is that most games aren't good. If they put more efforts into longer because of the prices getting higher, it's gonna push the "filler content". Games are bad enough dude, no incitative to give the risk of making worse games please.
And yeah the perfect lenght for a good game is around 20-25. ;)
 
trippingmartian said:
Mainstream movies generally cost $50,000,000-$100,000,000 to make these days, but even if you factor in both the movie ticket and the DVD, it only ends up costing the customer $30. The game industry is just being greedy.

But many more people watch/buy movies than play/buy video games, that's why games have always been more expensive than movies so they can break even.

When/If video games become as "mainstream" as movies, only then will the the two mediums cost the same to the end consumer (assuming similar budgets for both).
 
Fuck that shit, I'll be buying fewr games if that's the case. Speak with your wallets people, I'm going to be more of a cheapass gamer than I am currently if this keeps up.
 
Spain: GT4, in some places, as of today 64€. In a real cheap place, 58€

You do the math.

Please, do not complain so loudly as Euro gamers are ALWAYS FUTA. And that's a fact (special editions from Konami are so scarce that simply do not count).
 
sonic4ever said:
This stunt may take down the game industry.
No it won't. If companies start seeing a huge slump in sales due to the imposed price hikes, I'm sure price drops will likely occur. Certain high profile games may command higher prices and companies will get away with that but there will always be multiple price tiers to cater to different demographics.
 
Teddman said:
As far as jacking up prices on "must have" games like Madden and GTA, I also think it's a bad move. Sure, it's extra revenue, but at the cost of bad will from the fans.
Theoretical Scenario:

For football, last year you had ESPN 2K5 at $20 and Madden at $50. Let's say this fall there's only Madden 2K6, and it's selling for $60. Even Joe Sixpack is going to scratch his head and say, "Sixty dollars? Ten more than any other game? Well, where's that there ESPN game for $20?" The game clerk is likely going to explain that EA bought themselves out of competition and there's no more ESPN. It's not going to take a genius to put two and two together and realize EA is shaking him down for an extra $10 or $40 more than he paid for the same game last year.

Now he might still walk out of the store with that game, but he's also going to walk out with a bad impression of EA that will influence future purchases of their games.

I think you're giving Joe Sixpack WAAAY too much credit.
 
$60 is usually too much for me. I admit that I bought the Half-Life 2 silver package, so maybe big games like Blizzard's for example can get away with it due to the fanbase... but for most games, I would wait for price drops or just rent..
 
There's been a complaint that handheld game's price difference is narrowing so much these days. So instead of dropping the handheld prices, they raise the console prices! Brillant!
 
It's a good thing there are so many good games from this gen that I still haven't touched. It's another good thing that they'll be like ten dollars by the time new consoles are out.

I'll get a few must-haves and then stick with games from the current consoles until new stuff hits $20. Which I hope will be soon because nobody wants to pay 60-75 dollars (they mentioned a 50% raise in there). Then again maybe everyone will do this and the 2-3 must haves per console will stay above 50 for a year and a half while everything else bombs and hits the bargain bin the week after release.

I think a gaming crash might be good. We could all find new hobbies but keep posting on the GAF. MAF can tell us how he traded in his sailboat in a bottle collection for model trains and troll the Warhammer painters. Someone else can post sales numbers for new cross-stitching patters which we can reply to with laughing smilies and pictures of bombs and things that sound like bomb. Good times.
 
I'm thinking of putting more of my money where my ideals are....and investing more gaming time and income into independent developers. That would probably mean spending more of my gaming time on the PC and not grabbing every hot sequel/franchise game that comes out but...I don't know. It's important to me that those avenues exist in music and film, etc. but the options are very different in gaming. I'd like to think that eventually there could be avenues of niche development that still maintained a certain quality, but that can't happen unless there is a real alternative market.

I think a gaming crash might be good. We could all find new hobbies but keep posting on the GAF. MAF can tell us how he traded in his sailboat in a bottle collection for model trains and troll the Warhammer painters. Someone else can post sales numbers for new cross-stitching patters which we can reply to with laughing smilies and pictures of bombs and things that sound like bomb. Good times.

that's pretty f@#$@#$ awesome btw.
 
If there games are more AAA, meaning controls are as polished as good as Nintendo game like zelda,, etc instead of Jak 3 for example I have no problem. But why to I get feeling cost just to cover graphic whores and FMV from next gen productions.
 
masud said:
Go go gaming crash!

Yes, we'll have another crash like we did when Super Nintendo and Genesis games went for $59.99-$69.99, some for even $79.99-$99.99.

And we'll have another crash like when Playstation and Saturn games initially sold for $54.99-$59.99 each. And Nintendo 64 games were selling for $59.99-$69.99.

Yes, yet ANOTHER crash is comi-- oh, wait.
 
This industry is greedy as all hell because they know they have an "addictive" product. Videogames are nowhere near the addictive factor of movies, to judge from the attitudes of the average gamer vs average movie-goer.

The problem for big game publishers is that game rental and used software sales continue to rise from all accounts. Hiking prices further and further risks driving more people into the arms of rental and used games. Sure, hardcore (fanatics) will pay anything. Back in the 16-bit days of $70 cartridges, the gaming demographic was much more confined to kids (prime gaming addiction targets) and young adult hardcore. They'd pay anything for their games/bug parents until they bought it, no matter the cost.

But the gaming industry has spent so much time and trouble to expand and lure in the casual gaming masses. J. Allard gets up and makes a keynote where his vision of the future is EVERYBODY playing videogames.

The problem is that those casual masses are not the hardcore. They're not the addicts. Hike prices on them and we may find out they just go back to buying DVDs.
 
megateto said:
Spain: GT4, in some places, as of today 64€. In a real cheap place, 58€

You do the math.

Please, do not complain so loudly as Euro gamers are ALWAYS FUTA. And that's a fact (special editions from Konami are so scarce that simply do not count).
Just a reminder to everyone:

The average cost for a game in Europe is $75-80.

Games are released months after the US release, which (for example) means that we got to play titles like FFX 1 year after the japanese release. Some games like Xenogears, Parasite Eve, and many others were never released. Period.

Black borders, squashed images, less fps (60>50, 30>25, ghosting), 17.5% slower, jumpy framerates, features removed (GT4 doesn't support progressive scan here, 1080i am cry; Resident Evil Outbreak is NOT online, yay), games in foreign languages (think about GAF reactions if ONE big title were released in the US in Japanese), etc.

Systems cost 50% more.


Guess what? Sales are still high. In fact, Europe is still growing as a market and could become the biggest market in the future.

If game prices are set at $60 in the US next gen, people will complain (a lot), but they will still buy the games anyway. At best it could hurt the small devs, combined with the higher budget needed to produce next gen content, but the likes of EA will laugh at these comments all the way to the bank.

And, as much as I dislike it, we can't reasonably expect costs to stay the same forever. It makes no sense.
 
Like in any form of entertainment rising costs in development and the like are usually passed down to the consumer. Is that a bad thing? Well, yes and no. Yes because no one wants to spend more money then they have to on something and no because hopefully with such an increase in production costs this will translate into a much better done product. We should wait and see an actual price increase before saying that we are going to stop buying videogames because some titles still ship at really low prices like Katamari Damacy and NARC.
 
If this ever cause a crisis it could be benefiting the industry.
It it's what it takes for the big publishers to die and to finally distribute money more equally within the industry it could be nice.
Games could refocus a little more where they were before and we could see a rise of new games and niche markets. Small devellopers could rise making GOOD games instead of "the lastest graphic effect that kills all".
Maybe this industry needs to break down to return in full force and with better products.
 
Cerrius said:
NOT ON THE REVOLUTION!

The best idea will win, not the biggest budget!

ALL HAIL IWATA!


gdc-2005-iwata-keynote-transcript-20050310043006907.jpg

Well, Microsoft has an answer for those smaller companies that cant make it on their own: consolidation with MS. :lol
 
Top Bottom