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.

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.

Is this thing on? Can you hear me...

[Bin_jammin]

game publishers? I won't spend $60 on a game. I won't spend $40 on a game. You'd be hard pressed to get me to spend $25 to play a game that has a storyline, because it's wasted money after the story is complete. I'll buy used games for far cheaper (if at all) if I'm looking to kill some time. I'm about as casual a gamer as you'll ever find, but the ever rising price of consoles and games means you've lost me as a customer. I bought a PS2 and an Xbox, both of which are gathering dust. I may break them out once a month (or far less frequently in the summer) but don't count on it. I've considered buying a Wii because it's almost affordable, but there's not a whole ton of games for it. Consider this, I would LOVE to be able to buy a console that had games priced between $15 to $20. I don't really give a squat about the graphics, I want to be entertained. You'll have a customer for life if you make that happen, as I'll be able to justify buying a game or two a week. I realize you'd be hard pressed to put out that many quality titles, so chapterize them. Break the content up over a few games and I'll buy 'em one piece at a time, but don't make them updates, each would have to be a standalone title I'd be able to pick up and play for a few hours. At those prices you'd be competing with movies, and have my attention for at least twice as long.

Three models of less expensive games

[WillAffleckUW]

1. Release games in increment bundles - you buy basic version and get expansions or pay extra for online content.

Pro: Better revenue stream for game producers. Bug fixes easier to release.
Con: Consumers feel, rightfully, that they're getting ripped off.

2. Release games with in-game ads and product placements - signs in game and t-shirt logos and decals and maybe songs and optional extras are from adversiers.

Pro: Better revenue stream for game producers. Targeted ads from game registration.
Con: Consumers may feel they are oversold.
Note: If done only to level of real world or fantasy world normal experience, without flashing vids and noisy ads, this has higher buy in from consumers and doesn't feel bad to them.

3. Release games at lower cost and take money from CEO/exec pay while not stiffing game developers.

Pro: Investors in game producing firm get same return. Developers feel not as ripped off. Games cheaper.
Con: Fantasy. Game execs will never do this and will fix things so this never happens. Better off shooting the execs dead to practice marksmanship skills for in-game experience.

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.)

So he's saying games should be immune to inflation

[r_jensen11]

With SNES games costing sometimes $70 when they were launched (I have no clue what NES games cost when they were released), I'm surprised video games are as "cheap" as they are. Sure, some games have a rediculously high price now, like Guitar Hero and Rock Band come to mind. But there, you're also paying for new hardware, which doesn't cost *that* much more than a typical controller, and given that they're made in smaller quantities and require more materials, it makes sense that they cost more than a typical controller.

If games cost $60-$70 for the SNES, if video games were subject to inflation, and given a modest 3% inflation rate, they would be costing between $93.48 and $109.06. Yes, I know that not all games cost $60-70 back fifteen years ago, but some very popular ones did.

Business model

[Registered Coward v2]

The consultant solution:

1) Look at the development costs and segment by skills required.
2) Identify those skill that can be done elsewhere for less (art, coding for example)
3) Offshore those jobs
4) Pay CEO big bonus for saving money
5) Decide to ride the gravy train as long as you can with expensive games
6) Bail out of the company stock when it become obvious you are going to start losing money
7) CEO gets new job at another company for more money
8) Consultant pockets hefty fees