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Console game pricing standardizing at > $50?


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http://money.cnn.com/2004/09/29/commentary...aming/index.htm

 

Banc of America Securities' Gary Cooper isn't expecting quite as high an increase, but he'd like to see one sooner. In an August analyst note, Cooper called on publishers to raise prices on top-line games to $54.99 or higher by as early as this fall.

 

Taylor said he expects AAA game prices to jump $10 to $59.95.

 

CEO Robert Kotick said Activision would raise wholesale prices on all titles released for next generation systems by $3 to $5.

 

Maybe $55 for DOA:U will look like a deal soon.

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Hmm, it seems to me that prices are getting more varied. There are a lot more $29 and $39 titles in the last 2 years than in the previous 2, IME. Sure, the price of AAA titles hasn't budged, but my sense is that the average game price is dropping. Maybe pricing will become more tiered, with AAA titles going for ~$59 and other titles settling at $49 and less?

 

I wonder what they mean by "next generation systems" in your quote about Activision? Is that the current generation of "next generation" or is it really the PS3, Xbox2, Nintendo GamePolyhedron?

 

This seems to tie into this thread about the challenges of developing for the next round of consoles. The complexity of projects is rising quickly, development costs are going up, but game prices haven't.

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Originally posted by secretvampire@Sep 30 2004, 10:21 AM

As long as more and more titles are coming out in the $20-40 range, they can price Madden and Grand Theft Auto at $60 if they want. Just my opinion, but I'm usually far more interested in the less mainstream games and can wait for a price drop or two on the "AAA" stuff.

I feel the same way, but if the price for AAA does hit $60, then suddenly a $50 title will be defined as 'budget,' which would suck.

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I must admit that I've become spoiled with games at prices of $50 or less. I remember back in the 16-bit days when games would cast as much as $70. Things got a little better with the N64, with some games being $50 or $60; it seems as though $60 was the most common privce for games though.

 

The thing about raising prices is that it results in fewer people buying the product, essentially negating the effects of the price increase. I'm hoping the gaming industry doesn't get caught in a loop where they go, "Hey, not enough people are buying our games! We'd better raise prices! What? Even fewer consumers are buying our games now? Well, we'd better raise them again!"

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Well, I think they are really aiming at the people out there that buy games on release day, no questions asked. They probably figure "What is a 10% increase (say $54.99) for those kinds of consumers? They won't care." They might just be right. But you would probably see the first price reduction come rather quickly, say within 2 weeks to $45-50, to get the less hardcore gamers in the door. There are always going to be a lot of gamers that want it RIGHT NOW and can't wait, and I think they are going to try and exploit that.

 

I, personally, am not one of these consumers. I am much more likely to buy a title at release if it is $20-30, otherwise I've got such a backlog of games for a variety of systems, I can play the waiting game for a price drop. I very rarely buy a game at release for $50, and even then, I can usually find a trade-in deal/first-week sale/web store pricing error or similar deal to get it for much less. These are just my personal habits though, and I realize that there are many people who don't think this way (and may not even need to if they are financially comfortable and their time is worth more than the amount of savings they can get by looking around a bit, such is economics).

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I think secretvampire has it right. People who snap up launch titles aren't going to balk at an extra $5 or whatever.

 

I am much more likely to buy a title at release if it is $20-30, otherwise I've got such a backlog of games for a variety of systems, I can play the waiting game for a price drop

 

 

Me too lately. Between fulltime school, fulltime work, and other hobbies, not much time for gaming. I'll catch up on breaks. Even games I really wanted (and stood holding in the store thinking about it) I haven't pulled the trigger on. Tales of Symphonia for GC, for example. Of course if it would have been a strictly turn-based RPG I probably would have given in (weakness for turn-based RPGs and Strategy games).

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Yeah, I get fits paying out my $70 Canadian for the hottest new Nintendo titles when they are released (Zelda was the last back-breaker of that nature, though in two weeks Paper Mario 2 will likely hold that little crown). I don't know about the American economy, but I don't think Canadians will take a rise in game prices that put it close to triple digits.

 

If anything it's a perceptual thing, and even though our dollar is weaker, I imagine there'll be some consumer backlash over that sort of thing.

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EB Canada is advertising DOA Ultimate at $79.99. This is an easy game for me to pass up on. Advertised prices are fairly meaningless, anyway. I picked up sly 2 for only $39.99 canadian. I took advantage of trade 3 games in for Halo:CE, GTA:SA, Fable, and Pikmin 2. The ESPN sports games were an absolultely terrific bargain this year.

 

Companies can try and raise prices if they want, but they could wind up just cutting their own throats. Beyond Good and Evil's price was cut dramatically when ps2 sales didn't pan out. Prince of Persia floundered and all of a sudden, they were packing in Splinter Cell free to give it a boost. Psi-ops wound up being bundled with MK. Shadow Hearts Covenant was bundled with Shadow Hearts on pre-orders.

 

The reality of the situation is that consumers have a lot of clout. Some of the companies actually getting top dollar for their releases are the little guys like Atlus with Disgaea, Phantom Brave, because they ship in limited quantities. Activision just ain't that big, and their games come down in price fairly quickly anyway. It didn't take all that long for THUG to drop down to bargain pricing.

 

I'm an avid gamer, but my days of bending over and taking it up the old rectal canal for the latest and greatest game are long over. The realities of the industry are that if you price your game at the $50 mark or higher, it'd better be phenomenal, otherwise you're gonna get your ass handed to you. Enter the Matrix was only able to achieve the sales it did, courtesy of some rather outrageous promotional offers.

 

EB Canada sold ETM with an instant $10 rebate, in addition to a $20 mail-in rebate for EB's funny money, as well as guaranteeing a $40 trade in value for store credit for about a month. Spiderman 2 and Driver 3 had a bring 3 games in with a pulse and you could get them. I bought in 3 games with a collective value of $12 for Spiderman 2, played the game, beat it and returned to EB for a trade-in value of $28.

 

Bottom line, I wouldn't worry too much about game pricing. If anything, this year game prices have never been lower or the trade-in deals better. At least, imo.

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I don't think I'm ever going to pay $50 for another game again....except for a Killer Instinct game and a true Mario sequel. Those are my two game vices. I'd pay $50 for a KI port alone on XBox/GC, $50 for part 2, and another $50 for part 3. I'm a KI whore....sue me.

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No, the price increase is because PC spods happily snap up things like Warcraft 3, Doom 3 etc at higher than normal prices, so companies are trying to do the same on the consoles through things like the "Madden Collector's Edition", "MK Collector's Edition", "DOA Ultimate" & get some extra revenue. $3 per copy might not seem much, but if you're selling half a million copies, it adds up...

 

Prices should be coming down at this point in the consoles' lifecycle, not up. Budgets out of control? That's a development issue across the industry that companies need to wise up & say no to - simply stop the increased headcount & spiraling out of control projects. Easier said than done :)

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Prices should be coming down at this point in the consoles' lifecycle, not up. Budgets out of control? That's a development issue across the industry that companies need to wise up & say no to - simply stop the increased headcount & spiraling out of control projects. Easier said than done

 

SHOULD be, but they certainly won't let it happen. How much does it cost to manufacture a commercial audio CD these days, $0.25? They were saying 10-15 years ago that CD prices would drop dramatically as manufacturing became more efficient. Hasn't happened...the record companies got greedy and didn't want to pass along the savings to increase volume, they just wanted to pocket them. In that case, it has backfired and they blame online piracy for their ills. A few labels are starting to figure it out and when selling at $8-10 per CD are working wonders.

 

Movie studios have had it figured out from the beginning. Their pricing for DVDs has been spot-on, they are making a mint and consumers are happy with the value they are getting. I see the video game industry as being on the same track. They have not had slumping sales, they are growing every year at this point, there is no need for them to lower prices. I think you will only see the deep discounting begin when the next generation comes out, and they have to slash prices on "obsolete" old games as has happened for every generation from the Atari onward I would wager.

 

Brian is spot-on with his comparison to the PC market, and I would stretch that to the DVD market as well. Special editions are an easy way to milk a few more dollars out of the hardcore fans, I'm AMAZED they haven't done it sooner for console games (and I suppose they did in the Playstation 1 games on some of those Japanese RPGs, but it surely wasn't widespread).

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I've thought a clever marketing person could get a raise if he came up with the scheme that a game is $49.99 if you pre-order it, but $54.99 if you buy retail. Since they love preorders so much, it would

 

A) give them more preorder for folks that don't want to pay $54.99

 

and

 

B) bring in the extra cash from the release day folks that don't care to pre-order titles.

 

The distributor wins both ways. Damn, why aren't I making $200K a year as a marketer?

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