EA Boss Says Games Too Expensive

EA's John Riccitiello has been shaking things up at EA lately, with everything from layoffs to the purchase of BioWare. Now he's suggesting the company take some really drastic measures: make their games less expensive. "Riccitiello says the $31 billion gaming industry will suffer if it doesn't start to reevaluate its business model. Game executives at Sony, Microsoft and Activision must answer some tough questions in the coming years, like how long they can expect consumers to pay $59 for a video game. Riccitiello predicts the model will be obsolete in the next decade. 'In the next five years, we're all going to have to deal with this. In China, they're giving games away for free,' he says. 'People who benefit from the current model will need to embrace a new revenue model, or wait for others to disrupt.' As more publishers transition to making games for online distribution, Riccitiello says he expects EA will experiment with different pricing models."

Comments

Cheap games would be nice but...

[religious freak]

If this is an excuse to release crappier games, count me out. These things are expensive to make and I'd rather own 3 or 4 good games that have been invested in than 10 games that were just pounded out by some off-shore devs.

Yes, I'm sure some troll with mod points will kill my karma by me stating the obvious.

Re:Cheap games would be nice but...

[Fozzyuw]

If this is an excuse to release crappier games

It's probably more of an excuse to move towards a "game license" system like other too well known software products. No longer will you own the game, you'll only own a license to play it on your machine and you'll have to continue to pay a monthly fee to play it. Sound familiar? Games will stop being on a disc and companies will start distributing them via download play only.

After all, the resale of their games really kills them. Sure, I pay $50-60 for a game but I can turn it around for $35-45, costing me about $15 to play. So, now, they can move to a download system (all the current gen consoles have internet connection, so I cannot see the next-gen skipping it and PC's have had it forever), so you can pay $10 for a game per month or something. There's probably a lot more people who will pay $10 to play a game in one month than who will buy a $60. This concept isn't too far from the Virtual console (and Live/PS3 store, though I have no experience with those).

I don't doubt that's coming soon. How good or bad it will be, my crystal ball is too foggy. There are also other business models that can come about like micro-transactions and ad. supported games. I wouldn't doubt these new business models being tried on on consoles in not too long.

If the guy's just saying "lets lower the cost of games!" then I'm all for it, but that's not very business savvy, so I know there's a catch.

Cheers,
Fozzy

Re:Cheap games would be nice but...

[mabhatter654]

so if you want to deliver a Doom 3/Unreal 3 engine game then you need to simplify the parts more. I personally find that the original games are just tech demos.. and the original companies quickly go back to engine building, not game advancement. Perhaps they need to look at where they're spending money at.

The current trend is to spend the majority of the money on massive volumes of unique content for every level. Trying to fill 50 levels in one shot is a little unrealilstic. Perhaps they need to shorten AAA games into something more like serial novels. They have to be willing to barter their upfront investment in physics/animation/graphics engines on keeping people hooked on content. Myth is that most people sit and play a whole Doom 3 or Quake 4 beginning to end... those people have too much time and money... they aren't the public. The public buys Wii because the games are fun and short, you can play them ... an have a LIFE NOT playing games... games in their place and all that.

I don't think the current model of $60 then $35 "expansions" would work either, it feels like a rip-off. If each part (including the first, gotta take a risk guys) was $15 people would buy more games. To get the point down they'd have to bundle something as that's too little profit to sell in a box at retail. Perhaps selling collections or subscriptions, say hint/theme book with just a quick CD-ROM. Or sell monthly packs with 10 games that give you a serial key with 5 games.. and you can go online if you want the other 5 for more money.

The key focus is parting people from their money. People don't part with $60+ easily. They don't typically promise $15/month as subscriptions either (we don't always play, it's not worth it) on the other hand, the $10 - $15 is just about right for "disposable" income to a game for a few weekends. Throw in easy ways to play online or mod the game with friends and you'd have something. But you can't expect people to buy all the chapters either, each has to stand on it's own or new people won't join in the middle. Serial novels have been doing it for years.. that would be the model to figure out.

Re:Cheap games would be nice but...

[AvitarX]

Like the Orange Box you mean?

I think they may be going there.

lol

[Hsien-Ko]

And stripping online support of expensive games to force them to buy new versions is a worse tactic. Pot kettle EA!

I never did.

[iknownuttin]

...how long they can expect consumers to pay $59 for a video game.

I only shop for games in the bargain bins. The most I've ever paid for a game was $10. And I save the cost of having to upgrade my machine every, what, six months.

Stop licencing sports then

[DrXym]

I expect the cost of licencing NBA, FIFA, Nascar, NFL, Tiger Woods etc. far, far, far, far outweighs the costs of actual game development. Perhaps if EA wants to make a cut costs they'll relinquish their exclusive deals. Let some other company bear the weight of forking out for some exclusive franchise plough the savings into making decent titles.

Interestingly the NBA & NHL both allow multiple game franchises and probably each is better for it.

Re:Stop licencing sports then

[p0tat03]

Because not all genres are created equal. RTS games generally have lower dev costs than FPSes, due to the fact that FPS environments are scrutinized more closely, and tend to be disposable (once you've been through an area you don't go back). RPGs have the highest dev cost of all, due to players being accustomed to massive CG-quality cinematics and huge, epic storylines full of expensive voice acting, as WELL as non-recyclable maps.

I think the majority of the complaints here is that, the market's insatiable thirst for shinier graphics is ballooning the cost of content development, driving games to the edge where only "arena" based games like Sims, strategy games, and sports games, have a dev cost low enough to be profitable. HL1 was produced for a mere fraction of the cost to produce HL2, but somehow had a longer playtime. Before one blames Valve one should look at the level of workload difference between creating a scientist model in HL1, vs. the effort to do so in HL2.

One of the focuses right now for the industry is procedural content. How much can we reliably generate by machine without significantly impacting quality? Also we need to look at our toolchain, much of our tools are still too "dumb", exponentially increasing required artist hours for every extra little thing we add. The solution to our cost problem is technological - we need smarter tools that reduce man-hour cost, and we need procedural tools that can take a number of things away from humans entirely.

Look who is talking

[Paddo_Aus]

EA can afford to distrib their games for less because they just recycle the same crap from last year with a new badge and a few small incremental improvements rather than developing NEW games.

Re:Three models of less expensive games

[webmaster404]

Or number 4. Create Good games where people will actually pre-order and stand in line until midnight when the game is to be released. That is why Nintendo always ends up ahead in games, magazines will poke fun at the Wii, DS, GBA and Gamecube for having a lack of games but yet most of the games that are First or second party titles end up being smash hits, think about Ocarina of Time, people were willing to pay $50 for that game, even look at the Wii and how most American stores are almost always sold out of it and sometimes even Wii points! People are willing to pay full price, just don't make mediocre games (such as Tiger Woods, Madden, etc.)

Re:Not all games worth the same price.

[GMFTatsujin]

In those terms, my purchase of the Core Three D&D manuals was the best entertainment investment of my life.

At ~$80 for the whole package, I've had *years* of fun playing in co-op mode with my friends, every encounter was fresh, the quests were challenging and unexpected, and the monster AI dynamically adapted to my tactics.

Of course, there's the significant lag time of looking up the rules ... but at least there are no subscription fees.

Re:So he's saying games should be immune to inflat

[Altima(BoB)]

Surprised they're so 'cheap' now?

Move to the EU.

Here in Ireland, the average video game for a next generation system is 70. That's $101, almost twice the price of the average game in the US. The way I see it, instead of these executives worrying about getting Americans to spend $49 or $39 on games, why not figure out some way to get prices and release dates in the EU to less ridiculous levels? Higher taxation is a factor, true, but the average EU citizen has less spending power than the average US citizen, yet still buys a comparable amount of entertainment products. If you gave them a little more value for once, you may reap rewards greater than you would giving Americans an extra $10

(PS - I split my time between both the EU and the US, so I'm not just some grumpy European. But when people complain about prices in America such as gas, etc, I just laugh. The US is like a fantasy world when it comes to prices thanks to it being on the backs of low minimum wages and outsourcing etc)

Re:So he's saying games should be immune to inflat

[Manmademan]

Keep in mind though that Euro prices have VAT (that's sales tax for those unfamiliar with it) built IN to the price, and VAT can easily be 20% of the game's price or more. US prices are all quoted without tax. Some states add 5% to what you see, some add 7%, and some add zero.

Suggested tag: itsatrap

[LrdDimwit]

> People who benefit from the current model will need to embrace a new revenue model, or wait for others to disrupt.

It's far more insidious than that. This is EA, the company known for (among other things) taking things that used to be standard features -- stripping them out -- then trying to sell them to you via micropayments. That is a "new revenue model". Sell the game cheap. Only it isn't the whole game. Most of the cool parts aren't there. Then you get nickeled and dimed to death buying the game that was supposed to be the game you just bought. Getting in is so easy, then you need more ... more ... more ... That would be a great new revenue model -- for EA. It's only the same model used by drug dealers :)

Or how about charging people annual fees? Instead of 'buying' the game, you're only ever renting it. Want to put 150 hours on Disgaea 7? Well, gee, that gets kind of expensive. You should have played the 30 free hours that come with it, then bought the next one. Duh!

I for one do NOT welcome our new revenue model overlords. Call me crazy, but I'll stick with the devil I know. Here is my money -- now get out of my face and let me play *my* game. I have no interest in playing a "lower" price to be allowed to rent from you. You don't get to tell me how many times I can install the game, you don't get to tell me the game's not allowed to run because I haven't paid my subscription. And take those in-game ads and shove em where the sun don't shine (anyplace in your corporate headquarters should do fine, I suspect, what with all the blood-sucking vampires working out of the facility). *

* -- Note the presence of a teensy bit of exaggeration. In-game ads make sense in some instances -- but if I ever have to eat a Whopper to heal in Final Fantasy, I'll have to break out the can o' whup-ass.