Next-Gen Pricing Still A Hot Issue
GamesIndustry.biz has two articles taking a look at next-gen pricing, both from Microsoft's point of view. Xbox VP Peter Moore says that next-generation pricing is actually going to be an excellent value for the money. From the article: "...he predicted that many games may be offered in limited edition bundles, similar to the already announced Perfect Dark Zero bundle, which costs an additional $10 but adds a significant amount of bonus content to the title, and that premium downloads costing 'maybe another $5' will also be a key strategy for publishers." Additionally, the Xbox marketing folks are already planning price reductions for the 360. From that article: "'We will wind up cost-reducing the product every year,' Todd Holmdahl, corporate vice president of the Xbox product group, told Reuters. It's estimated that the 360 costs approximately $100 less per unit to manufacture than Sony's PS3, giving Microsoft more scope for price cuts."
Even if the price will be cut later, it still costs $500 to buy the full version. Buying a new video card every 3-4 years for that much is one thing, a new console every year is quite another.
Game prices are high enough as it is. Now if people want to play the 'whole' game they have to pay an extra $10 for more of the game and $5 more for extra online content? It seems like just another way to nickel and dime consumers. They just just release the 'whole' game at the standard price, and if you pay for xbox live you should get the online content for free.
I expect Nintendo to release at $250 and clean up.
That said, let's look at the fact. According to IGN the NES launched for (an adjusted) $351.91. For that price you got two games (Mario and Duck Hunt), the console, two controllers, and a light gun (you even got R.O.B. if you bought one of the earliest ones in the US).
The XBox 360 is launching at $399 (for the REAL version, not the "XBox three-shitty" as Penny Arcade has termed the cheaper one. For that price you get the console, one controller, a headset, and a one year subscription to live. If you assume that live costs $50 a year, that means that the same price as the NES (adjusted), you get.. two fewer games, one less controller, and no lightgun.
The Sega Genesis which cost $389.67 at launch (again, adjusted) came with two controllers and Sonic. Again, you got two controllers and a game.
The N64 cost $242.75 at launch. So for what the XBox 360 will cost you could have bought the N64, Mario ($60 lets say), Pilotwings ($60 lets say), and a controller ($30 lets say). Two games, two controllers for that price.
Now let's look at the GameCube. $210 at launch leaves us with an extra $190 (three games) before we hit the price of the XBox 360 without a game. Add the price of a game to the 360 ($60-70) and you could buy two controllers for the 'cube, or a controller and a memory card.
Now MS is doing better than the NeoGeo ($1040), the 3DO ($920), and the Atari VCS ($810). But with the exception of the Atari (the first real home system), the other two FAILED in the marketplace (largely due to high price).
The NeoGeo had games costing upwards of $200 at the time. Sure they were arcade PERFECT, but most people didn't buy $200 games. I hope MS is smarter than that. They will probably only charge $80 for their games.
Comment forecast: Bits of genius surrounded by a sea of mediocrity.
The "significant additional bonus content" has already been reported to be jack shit.
1 of 9 collector's cards? Behinds the scenes footage? Who cares.
Meanwhile on the other hand Firaxis is offering:
Collector's case: Navy blue "leatherette" bookshelf case embossed with the Civilization IV logo.
CD Soundtrack: Containing original compositions by Christopher Tin (http://christophertin.com/news.html) and Jeffrey Briggs (composer of Civilization II), as well as classical pieces throughout the ages.
Keyboard template: A die-cut keyboard layout for quick reference to keyboard commands during the game.
Tech Tree map: A foldout poster that displays the tech tree for ease of reference. A tech tree is a path you need to take with your scientific research in the game in order to reach certain goals. The path you take helps shape the society you create and help shapes you as a leader. Here's an example: http://www.civfanatics.com/civ3/techtree/
Spiral bound manual: The 250pp+ manual is upgraded from the standard perfect bound to a spiral bound version, allowing it to sit flat while open.
All this for the low, low price of FREE if you preorder. Microsoft wouldn't know "excellent consumer value" if it kicked them in the nuts and punted their dog off a suspension bridge.
Netjak.com independent reviews of domestic & import video ga
If things get any worse for the Xbox 360 I'm pretty sure Peter Moore and the others in charge of the project are going to be lynched by irate and disillusioned Xbox owners.
Probably not the best guy to be quoting...
Has there ever been a combination of those values that didn't result in an "excellent value for the money"?
Xbox 360
Perfect Dark Zero
Wireless Controller
Headset, Media Remote, + 20GB HD
Partial Online Access (Live Silver)
Total: $450
PS3
Metal Gear Solid 4
Wireless Controller
Media Remote
Online Access?
Total: $450
Nintendo Revolution
Super Smash Bros. Revolution
Wireless (Revolutionary!) Controller
Analog Stick Attachment
Full Online Access
Total: $300
Depending on how the Rev controller thing turns out with Smash Bros., I personally have to go with the Revolution. If, for no other reason, because that's all my wallet can handle, and it might not be able to handle that!
The N64 was the last cartridge-based home console Nintendo made, throwing themselves out of the industry throne because of the implications of that choice alone.
Producing the N64's cartridge media was literally hundreds of times more expensive than the PSX's CDs. Thus, to remain profitable, Nintendo had to raise the price of their games up to $70 per cartridge. That just helped Sony to strenghten their position in the industry since they had a far superior bang-per-buck ratio for both users and developers. Nintendo finally settled for a profitable, yet distant second place in that generation of the console wars.
The current consoles from Sony and MS are sold initially below cost (Xbox is still bleeding like in a Tarantino movie), while the development costs are skyrocketing because the market demands higher complexity. I can't help but think this will only get bloodier in the next generation of High-Definition, Online-enabled, high-performance, BT/Wi-Fi, _______ (insert trendy buzzword here) gaming.
I think that the PSP's media prices are already outrageous ($50 for a non-original game!). That fact alone makes me expect things to be worse for next-gen console games.
Nintendo, OTOH, definitely learned something from that awful $70 experience as it showed us with their cheap, powerful AND highly profitable Gamecube, GBA and DS. I certainly hope Revolution games and console are cheaper than the competition. I also hope gamers take notice and stop buying slightly prettier versions of existing games at a $10-$20 premium.
- Otaku no naka no otaku, otaking da!!!
Sonic wasn't around until 2 years after the US Genesis launch.
did American kids get so damn rich? Did I miss a memo? Same goes for the parents, I had to beg for an N64 and that was $250 and umpteen years ago. Message to Sony/MS: We don't all live in houses with Viking ranges, infinity pools and boat houses. Remember that video games have 'game' in their title. You can shove all the 'value' into a system you want, but if it's expensive it's still, well expensive. Otherwise we'd all be listening to Bose theater systems after a jaunt around the country club in our Ferraris.
A console's lifecycle is 5 years
When the three games you really want to play are exclusives on three different companies' consoles, then a console's average life cycle is 1 year and 8 months.
If people would hold off a second, they wouldn't have to pay the "early adoption tax."
Three words: Out of print. People want to buy a console before a particular title goes out of print permanently. Not all publishers re-release titles in "Greatest Hits" editions; some just discontinue the title for the next 94 years (or 9.4 if you're lucky).
I think that MS and Sony both are making a pretty large mistake with their new consoles.
When new consoles were released in the past, they offered an incredible upgrade in game quality. Graphics, sound, gameplay capabilities (like better controllers, games with more depth, etc) were all significantly better than the previous generation.
Because of the remarkable upgrade in gaming experience, people were willing to part with tons of cash in order to play the newest games.
I don't see this happening quite so much now. Will gameplay on these new consoles be so much better that I have to get one?
The only place I see these consoles being remarkably different is with online play being better utilized. Is that enough to swing enough buyers, especially considering monthly fees?
I'm not a Nintendo fanboy -- but a cheaper system better reflects the smaller incremental increase in game tech.
Also, for those of us who bought PS/PS2/Xbox but not N64 or Gamecube, the re-release of classic Nintendo games allows us to experience content that we may have missed.
For those entering the console market for the first time, however, the Xbox 360 and PS3 may have more appeal.
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
The N64, Gamecube, and (though you didn't mention it) Dreamcast didn't do any better than the more expensive competitors. The N64 was easily beaten by the PS1 ($300 in 1995), the Gamecube was soundly outsold by the PS2 ($300 in 2000) and to a much lesser extent the Xbox ($300 in 2001), and the Dreamcast ($200 in 1999) was crushed by the PS2.
As long as the price is within certain limits it doesn't appear that it has any real effect on console sales. The real issue is always the games, and it's very hard to make any prediction about the Revolution's strength and (more importantly) appeal in that area, since none have been revealed in any way. For that matter, neither has a price or solid release date (how much will the X360 cost when that date comes?).
And though most gamers will probably grab the $400 version of the 360, the $300 version will play the vast majority of games released for the system (basically everything but the MMORPGs it looks like right now). It's pretty fanboyish to essentially ignore that there is a perfectly functional and more cost-effective version available to those that find $400 to be too expensive. But I guess it being cheaper than the NES at release would sort of destroy your argument, huh?
There is no excellent beauty that hath not some strangeness in the proportion. -- Francis Bacon
That last post is ANYTHING but offtopic!
As a programmer for a major industrial OEM, even I don't have $300 to toss at a console system. The pricing for systems and their peripherals (especially) has become outrageous. I'm not paying $30 for a fucking controller, nor am I ever paying more than $20 for a game I know I'll be tired of after one weekend.
Bargain bins, baby. Bargain bins.
Microsoft rip someone off? Mr. Gates I wouldnt have expected this from you....for shame, for shame
I wonder if the recent success of things like the Jade Empire Limited Edition (which included an extra playable character) the Halo 2 boxset (that included lots of documentaries that explained why they didn't finish the game) and the Half Life 2 Gold package has opened up a new market?
It seems hardcore gamers are willing to pay more if there are a few extras thrown it. I worry though that this will create some sort of two-tiered market where you don't get all the features in your game unless you pay for the super special edition.
I suppose a more benign form of this is Xbox Live where you pay a subscription and get extras for many games, like Ninja Gaiden's Hurricane Packs. Still it's not something I'd like to see become common.
I see a lot of posters trying to make themselves feel better about the next-gen pricing structures by adjusting yesteryear's system launch prices for inflation. This will not give you an accurate picture of what's going on for two reasons:
1. Electronics are getting cheaper. How much was that TV you bought in 1983 adjusted for inflation? How about the VCR you bought in 1985 for $250? Or even your refrigerator or oven? The price of a next-gen system SHOULD be cheaper by this logic.
- BUT -
2. Consoles are becoming more powerful compared to their peers. Back in the day when the NES came out, it was significantly less powerful a machine than the PCs of the time and the arcade machines of the time. Now the XBox and PS2 are about 3/4 as capable as a PC that came out around launch. As these consoles become more and more powerful compared to their peers, they SHOULD become more expensive.
The important thing isn't what the XBox 360 or PS3 will cost compared to the NES. It's far more important that you think the XBox 360 is a good value from the money. Judging by these "adjusting for inflation" defenses, I get the idea that a lot of people aren't happy with the price but are willing to pay it.
Price cuts are a tool companies use to bolster slow or lagging sales. They hurt the bottom line and they are not something companies wear as a badge of honor. This is probably the single most important sign of wavering confidence in this console war - yet the media is generally giving it a free pass.
Microsoft is backpedaling and stuttering like a scared little boy. On one hand they just the same day claimed how their console costs less to produce! Then they say they will be making yearly major price cuts. These two things do not jive in marketing. If you have a superior product that costs less to manufacture than your direct competitor you have the upper hand without price cut tactics. So something is massively wrong here. This should be raising red flags in every single persons mind, and shows some serious weakness in some aspect of their product to resort to price cutting and pulicising price cuts.
Honestly Microsoft just put a nail in their own coffin on this misstep. Consumers who are on the fence will now pass on the initial release to wait for Sony to release and compare the products, especially since they know now by waiting a year they will be saving money *and* have the chance to weigh their options. Many seasoned gamers will also play the wait game as they know that not much happens in the first year beyond one or two solid launch titles.
Bad move.
http://teasphere.wordpress.com - A little spot of tea
It looks like there will be three discrete strategies to grab differing types of consumers.
1) Sony
-Very high price point.
-Going after large installed user base as well as hardcore gamers.
Negatives:
-High manufacture cost means less opportunity for dicounting.
-Casual gamers and Parents (who buy gifts for minors) will likely balk at ultrahigh prices.
2) Microsoft
-Very high price point.
-Going after installed user base as well as hardcore gamers.
Negatives:
-High manufacture cost means less opportunity for dicounting.
-Likely consumer confustion over various hard drive options*
-Casual gamers and Parents (who buy gifts for minors) will likely balk at ultrahigh prices.
* Spare me your lectures. If you have ever worked retail, you know customers are dumb about stuff like this.
3) Nintendo
-Lower price point than Sony or Microsoft.
-Going after casual gamers, Women, and nostalgic gamers, as well as Nintendo Fanboy base.
Negatives:
-Unusual controllers may have tech glitches, forcing costly recall.
-Hardcore gamers think Nintendo is 'kiddy' and will probably avoid.
-Going after people who usually don't buy games is risky. They may still not care about games.
Just from this sketch, the best case scenario for each company is:
SONY
-Devotion to the Sony brand and superior graphics carries PS3 to victory.
MICROSOFT
-Marketing 'cool factor' and online elements, including exclusive licensing deals, carry XBox 360 to victory.
NINTENDO
-Expansion of the market due to lower priced option and attempt to keep games simple and innovative carry the Revolution to victory.
Note: 'Victory' means THE MOST PROFIT, not THE MOST UNITS SOLD. If you are a shareholder, you care about PROFIT.
I'd put my money on Nintendo. Sony and Microsoft and going to beat each other to death with their unlimited marketing checkbooks while Nintendo creates new customers.
Sony has the most to lose. Why should consumers pay hundreds of dollars for graphics that are somewhat better than what they have now?
I don't see where Microsoft goes. THey aren't innovative like Nintendo. They don't have the huge installed fanbase that Sony does.
Nintendo is taking a very high risk strategy, but the payoff could be immense.
These days I regularly buy 6-month old titles for half-price, instead of paying full price "just to have it" on day one.
Half.com lists Rez for PS2 at $100 used. I seriously don't think the game cost $200 when it was new.