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Retail Game Advertising Rises Sharply
Thanks to Reuters/Yahoo for their report indicating that retail advertisements for video games in newspapers rose almost 77 percent in the second quarter compared to a year earlier. Interestingly, the survey also found that "...more than 40 percent of game ads in the quarter were for games costing $49.99, the usual price for top titles, compared with about 33 percent in the prior quarter. At the same time, the number of ads for discount $19.99 titles declined." Does this show companies are concentrating more on full-price wannabe blockbusters, as opposed to cut-price shovelware? In another intriguing finding, the survey also revealed average GameCube software prices at $26, compared to more than $33 for both PlayStation 2 and Xbox.
It just means that they're charging full-price for shovelware.
At this point I don't know that it is fair to label $20 software shovelware. Especially in the case of consoles (with the possible exception of the XBox) many of the $20 titles are simply older software that won't sell as well at a higher price point because all the enthusiasts have already bought it. No point in spending advertising dollars on 1 or 2 year old titles. However for $20 I can't see GTAIII as shovelware, Valusoft on the other hand... Also I note XBox as the exception as it seems that atleast the first several titels that went to $20 were the worst titles they had. Just a way of unloading. What I am more interested in is a study of advertising within games. I'll grant that a game willnot sell as many copies as a movie may make in attendance but I was exceptionally irritated at the in-game advertising for nVidia, PowerAde and Pentium4 in "enter the Matrix". I already paid $50 for the damn thing I don't want to have to be subjected to adverts as well. If nothing else, in the case of the Matrix game, it only serves to pull oyu out of the universe that is being presented to you. I'm wondering how soon advertising will make it into almost all mainstream games?
There is no doubt a collective concious between all gamers when it comes to pricing. Gamers all know that sooner or later, all games will fall below the 20 - 30 dollar price range. To offset this, retailers are aggressively pushing new product.
I saw this first hand after recently launching GameFarmer, a service which compares console video game prices and allows users to set price alerts on games in their wishlists. Most gamers purchase preowned or set price alerts on new games right away, many times before they are released in stores.
I think a lot of it also has to do with the fact music sales are slipping and video games are still growing at a very healthy rate. In many cases bridging the lost revenue gap at places such as Wal-Mart and Target (who has an extensive online gaming advertising campaign).
Does this show companies are concentrating more on full-price wannabe blockbusters, as opposed to cut-price shovelware?
Are you saying these are the only two types of games being produced? Is it possible to mod the original as flamebait? Who is editing this crap before it gets onto the main games page?
"Does this show companies are concentrating more on full-price wannabe blockbusters, as opposed to cut-price shovelware?"
Heh. In my experience, it's more likely concentration on full-price shovelware.
Enter My Ass The Matrix. Psh.
I think there is some reasoning behind this. It costs the same to manufacture a $19.99 game as a $49.99 game. However, the $49.99 games bring more profits and count as two $19.99 games. So when they sell say 100 copies at $49.99 they make $5000 while selling a 100 copies at $19.99 only yeilds $2000. The ratio of production cost to sales is greatly different.
Those numbers are skewed a little. There were two games advertised to death, mainly because their movie was coming out the same time. You could not go anywhere without seeing "Enter the Matrix" or "Tomb Raider" ads. I would wager a bet these two games had a lot to do with the inflated numbers.
The last time I went to a movie, they actually had an advert for KOTOR on the big screen. At first, I thought it was for the new movie.
Don't agree? Explain how Sega had to go third party and Nintendo's first party titles aren't doing as well as hoped while Sony rakes in the cash with substandard stuff.
the survey also revealed average GameCube software prices at $26, compared to more than $33 for both PlayStation 2 and Xbox.
is it just me, or have video games gotten significantly cheapter over the last decade or so? maybe this is due to the lower costs associated with manufacturing cds as opposed to cartridges. i remember spending a lot more for the latest sega genesis or super nintendo games. in particular, i remember sword of vermillion costing me close to $70.
Gyrate Dot Org - "Where high-tech meets low-life"
There is a considerable amount of up-front costs for developing, testing and packaging a game. Nearly all of the developer's costs occur before the release of the game and a good portion of the publisher's expenses as well. With that in mind, both need a large infusion of cash to cover the costs of the release and to pour funds back into other projects.
It is also interesting that retailers like Best Buy and Walmart don't seem to be using games as lost leaders in the same way that they do for music and movies. My guess is that MAP agreements and hefty amounts of co-op keep the retailers at the initial price.