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Console Game Prices Going Up?
The Bungi writes "MSNBC is running a story that I found interesting in light of the previous article here on Slashdot predicting hardware prices will likely fall. The MSNBC piece is quoting analysts that think software prices might go up by about $10 for a new title. The reasons? Among others, more complex games and anti-piracy measures built into the media. Get ready for $60 Halo II."
I would think that as we move along to the future hardware will stop being so different and it will just be a matter of aesthetics or just which brand you want to back. Software will be the main difference. I would say raise the software prices IF hardware prices go down. People put a big chunk down for a high end PC and then they buy one or two games a year because they are still paying off their PC. Make a high end PC around $500 and games around $60 and then people will buy some more games for their cheaper nicer hardware.
Where you run into problems though is copy protection. People will just pirate that $60 game.
So in order to reverse it then charge more for hardware and infinitely less for software. I guess we will see how it turns out.
Courage is fear holding on a minute longer. George Patton
Well, there's the added cost of the anti-piracy measures. First, they add that price.
But you expect them to drop the expected piracy % based on new anti-piracy techniques? No, they're going to keep that estimate at the same level (as far as pricing is concerned), and then wait to see how well the new measures work, and adjust the expected % for the next release with those measures.
I mean, with how long most DRM technologies have held up lately (lasting months is impressive, most last days or weeks), I wouldn't be so quick to put enough faith in them to risk a profit line. And really, if they were to remove the "padding" in the price for piracy, they'd be risking just that.
Dark Nexus
"Sanity is calming, but madness is more interesting."
I remember paying $40 for Apple II games in the 80s. Inflation must certainly take its toll on game prices eventually, and I am all for supporting game developers. What I am not for is supporting the near-extortion practices of game publishers (coughmicrosoftcough) who force developers to get games out the door prematurely. That, I believe, is why we see games with so much less spit and polish than we used to. The first time I saw a game seg fault on the Xbox, I raged. Because of that, I am willing to pay $60 for a Blizzard game that I know will be clean and well-concieved. And for software which is belted out before a Christmas deadline so that a trillion dollar multinational corporation can recoup losses on the system itself, I'll pay nothing at all...
Among others, more complex games and anti-piracy measures built into the media.
We need to charge this much for games because so many are pirated. Now we need to charge you more because we're trying to negate that. I'd like to call them idiots but we consumers are the ones who keep falling for this stuff and teaching them that they can get away with it.
The IRS could learn something here. *fears*
Games are already overpriced if you really take a look. With multiple consoles pulling players in multiple directions, a handheld system to accompany each of them (almost), and companies fluctuating in and out of existence on nearly a monthly basis, I smell a market crash coming...
If someone releases a new ET game then it's a sure sign the end is near...
I have read a few insightful and interesting comments in reply to this article that are based on common sense. Mainly this...
That makes complete sense if of course that was the real reason. I mean, come on, of course piracy wasn't the real reason behind high prices - duh! That is nothing but some marketing/PR spin to justify those high prices.
I have another theory which I think also relies on common sense, but looks at it from a money-snagging business ploy that I would implement if I was in that industry. To me it makes perfect (business) sense to raise prices while increasing the level of security / anti-pirate technology. People are forced to pay the hiked up prices because it is now even more difficult to circumvent the protections in place, plus you have the added benefit of protection against circumvention thanks to the unbelievably awful DMCA.
I mean you're all set...
There is no missing middle step, that's all it takes.
Raise prices when people are forced to pay them and have less alternative options. Does this make the consumer happy? Of course not! But it sure does make the industry happy to see the extra money come in, because no matter how idealistic people like try be in saying, "That's the final straw, I'm not supporting this industry any more. They won't get my money!" - which will work for a small minority of people, but won't for the majority of people who will fork out more cash for the new games. The other unfortunate thing is that many games of late seem to be rushed to completion before they're ready and don't even deserve the higher prices on their own merit.
Just my $.02
Are you bovilexic? Moo!
1980s and early 1990s games: box contained a game, a thick manual, and usually some extras, such as a cloth map, a booklet with background informations or cut-outs of spaceships (Wing Commander series). Price per game: $50
2001-03 games: Box, which is much smaller (in the case of Europeans a DVD box even for PC games) contains a game and a thin booklet with installation instructions. The manual is on the CD; no extras. Price: $50.
Prices of games have already gone up. What I described, however, is only the most visible indication. You also have games that start at $60 (Neverwinter Nights, Warcraft III), or "special editions" that can cost as much as $80 and have box contents roughly equal to those of games that cost $50 ten years ago. In addition, the dollar spent per hour of gameplay is increasing all the time. Where you spent anywhere between 25 and 50 cents per hour of gameplay ten to fifteen years ago, you now spend up to $5 per hour of gameplay on titles like Command & Conquer: Renegade and Unreal II. That means that where you spent maybe $50 per month on games, you spend the same amount per week these days, or even more. Games are already enormously expensive, compared to a decade ago, but people didn't notice. The publishers used the ages-old strategy to decrease the amount of sold, while keeping the price stable, and it worked. Unfortunately for them, there is very little left to cut away from games, and so they have to resort to increasing the prices.
As for the increased complexity of games, shouldn't it - at least in part - be offset by code reuse? Developing a similar game or a sequel should be much easier than the initial title.
I had a friend who worked at Berkeley Systems on their "You Don't Know Jack" line. According to him, the first game lost money. But when they developed it, they made it in such a way that it was extremely easy to come out with different edition (granted, trivia games do lend themselves to this naturally.) The figure I was told was that it took them 2 weeks to create a new edition of the game. This meant that subsequent games were huge money makers and that the overall line of games was a big success.
So sometimes the code re-use angle is figured into the cost of the first title. The first title might lose money on the expectation that subsequent titles will make it up.
"Don't blame me, I voted for Kodos!"
MY analysis, were I so bold as to make one, would including looking at a similar industry and the trends there: VHS/DVD sales. Specifically, when pre-recorded VHS movies hit the market, they were sold entirely for the purpose of rental. The prices would start at around $50 and peak at around $100 per copy. Once enough people had VCRs and production costs for VHS tapes had dropped enough, movie studios took a look at the market and wondered if they could actually get people to BUY the movies. ET debuts at $20 (discounted soon after to $15) and just about everybody ran out and got a copy. Seeing that they had something there, everyone started jumping on the bandwagon. By the time DVDs started their meteoric rise BRAND NEW VHS movies could be had for $10-15 a piece and bargain bins were filled with videos between $5-10 each. DVD has followed suit, though much faster because of the incredibly rapid adoption of the format by consumers.
Even more on point, one could look at the prices of Atari 2600 games. Those prices dropped significantly once the 2600 reached a critical mass where just about everybody had one - and those were on cartridges which are more expensive to produce than DVDs. (Prices also fell when the video game market went to pot but we'll ignore that here.)
If we then look at video games, it's clear that a similar result is on the horizon. While it's unlikely that top-flight games are going to drop as low as $20 a piece (they don't get box office revenues like movies do), the number of consoles in use today is so much larger than it ever has been that even a bad PS2 game can sell 50,000 units ($2.5 million retail) in the US and great games can sell into the millions. If console makers ever manage to understand the potential benefits, they could all change their royalty structures (as Nintendo recently has) and a $10 price drop across the board could end up spurring even more sales. A $10 price increase, on the other hand, will likely show an even more significant negative effect.
Obviously, I'm no market analyst so you can take my thoughts and words with a grain of salt. But I certainly wouldn't give any more weight to the ideas of a single market analyst (and a writer who was probably desperate for a story and happened to see a press release) who, unless he has access to actual top executives who are TELLING HIM that prices are going to go up, is also just talking out his ass.
If prices do happen to go up $10, I expect that they'll drop right back down once they see what I expect will be a chilling result on sell-through.