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Do Video Games Cost Too Much?
Valve's Gabe Newell gave the keynote address at this year's Design, Innovate, Communicate, Entertain (DICE) Summit about the cost of games, the effect of piracy, and how to reach new players. Valve undertook an experiment recently to test how price affected the sales of their popular survival-horror FPS, Left 4 Dead. They Reduced the price by 50% on Steam, which "resulted in a 3000% increase in sales of the game, posting overall sales that beat the title's original launch performance." They also tested various other price drops over the holidays, seeing spikes in sales that corresponded well to the size of the discount. This will undoubtedly add to the speculation that game prices have risen too high for the current economic climate. G4TV ran a live blog of Newell's presentation, providing a few more details.
yup. the cost of video games is why i quit buying them. and no, i haven't resorted to alternate means of acquisition, either. i just quit buying new ones, content on playing the couple dozen or so that are on my gaming pc.
not buying any new games has also saved the money that would've otherwise had to gone into hardware upgrades to even play the new ones in the first place.
$20-30 for a game is much more agreeable to my checkbook than the $50-60 or more some games cost these days.
and then you have series like the sims, which gets you both coming and going. $50 for the game, $20+ for each addon pack. by the time you pick up the entire "set" for the kids, you're looking at a couple hundred bucks or more.
The points he makes in the Gamasutra summary sound remarkably clueful for the co-founder of a semi-major media firm. He seems to essentially "get it", that when selling content you're in a market, and if you're failing to sell as much as you'd want, the best solution is to figure out how you're failing to succeed in the market rather than whining about pirates.
Basically:
1. Price points are not given from God. There's a supply/demand curve, and if you price things higher, you'll get more profit per item but sell fewer items. What shape this curve takes, and where you ought to locate yourself on it, can vary on a lot of factors, and it's your job as a company selling things to research that, rather than decide "games cost $50/$60, and that's that". Maybe they should cost $20, maybe they should cost $100, maybe it varies based on the game and your goals.
2. There are a lot of people are willing to spend money. Some people will always get your stuff off Bittorrent purely due to the price (because it's free there, and you want money). But this is, contrary to what many media firms think, not the only or main problem. There are a lot of people who are willing to spend money on a lot of things. You'd do best to ask yourself if your company is doing something wrong that's keeping even people who would be willing to give you money from doing so (e.g. region-locked DVDs making it impossible for them to buy a legit copy).
3. Along the lines of #2, DRM can be counter-productive, by making the legit copy seem like a bigger hassle than the cracked copy off Bittorrent. People who are willing to give you money for something they like may not be willing to give you money if you come off seeming like you hate your customers.
Of course, #3 is slightly strange since Valve does in fact use DRM on Steam to authenticate your account to a particular machine. I suppose in their defense it's not nearly as draconian as much DRM, so they at least seem to be making efforts not to piss off their customers. And the existence of Steam in the first place, several years before any other major companies did anything similar, seems to indicate a certain understanding of, "if you make it easy for people to buy your things, they might do so".
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
Back in the day when I had an Atari 800, games were typically GBP35 with the odd extreme one being GBP80 (Some SSI or Avalon Hill game, War in Russia I think?).
My monthly pay at the time was GBP120 so that was basically a weeks money per game.
Bearing in mind how much more effort goes into a modern game, it's amazing prices have effectively dropped. That said, I had more fun then with those old 8K games except the very occassional title that really grabs me now like Bioshock.
I want a list of atrocities done in your name - Recoil
If Sony & Microsoft didn't try to make money by selling their consoles at a loss and making the money on games sales then this proof would never have been nessessary. If you sell a PC game then it's generally priced in line with the console release, which is inflated by the console markup. Rather than blame themselves for pricing games out of peoples spending brackets, both are trying to blame the second hand market for reducing sales and work out ways to kill it. Pro Evolution Soccer on the PS3 is the start of the slope. If you buy a second hand copy you can't play it online if it has been used online before. It won't be long before disks brought in shops only count as a "non-transfereable licence to play" rather than ownership of the game and it'll still be at the current prices.
Well here in argentina the Peso is devaluating (1 peso = 3.52 dollars, last week it was 3.50, and it keeps devaluating), and a game like GTAIV for xbox360 costs 399 pesos at a retail store. .ar can make ar$2k a month), so it's no wonder everyone gets pirated copies.
Now, imagine that salaries are similar to, say, salaries in the us but in pesos (i.e.: where an us worker makes u$s2k a month, the same job in
Imagine if you had to pay 399 euro or 399 dollars for a game. If it weren't easy to copy them, most people wouldn't play them at all.
Ironically, I just bought World of Goo for linux at 20 dollars over the net, which is about 70 pesos.. that's as if you had to pay 70 euros for it, but I bought it for two main reasons.
1) I wanted to support non-drm, linux native efforts
2) I really like the game. Not 70-bucks-like-it, but having reason 1) there, I thought the occasion warranted an extra effort.
"Luck is my middle name," said Rincewind, indistinctly. "Mind you, my first name is Bad." -- Terry Pratchett
Also, the ability to return a game that I do not like.
It used to be that this was a given, since before the media companies forced their will upon the rest of us, games were treated like any other merchandise. When I could return a game I didn't like, or that didn't work, to the store in the mall (at the time it was Software Etc.) I bought many more games than I do now. I could take a chance because the risk to me personally was extremely low.
I would frequently browse the shelves holding PC games (which were far more numerous back then). Hmm, that looks like it *might* be fun/interesting. I'll buy it and find out. Maybe it is, maybe it isn't, but I'll soon know first hand.
Publishers constantly whine about the risks of developing new IP because it is very hard to know how it will do in the market. If I, as a customer, have the ability to make low risk purchases, I'm far more likely to try new games.
As it stands now with the draconian return policies, I almost always wait for a stack of reviews to be published before I make any decisions. This hurts the developers and publishers in a number of ways. First, I have to take the initiative to find these reviews which all but eliminates the chance of an impulse buy (or even a semi-researched buy). And second, I am relying on the reviewers subjective opinion. I know that I am getting filtered information and that my views on what is good/bad are likely different from that of the reviewer, but what choice do I have?
Demos can mitigate this problem, but only a little. They still eliminate the chance of an impulse buy. Plus, I find I give a demo much less time to "win me over" than I do something I have paid for. And, of course, depending on what genres you like, the availability of demos varies greatly. Adventure games, strategy, RPG/JRPG? Good luck finding demos.
Elrond, Duke of URL
"This is the most fun I've had without being drenched in the blood of my enemies!"-Sam&Max
A lot of people say that this price increase is due to inflation etc. and that the prices we all remember are impossible today.
I can only think of the games that come out for Spectrum - 1980's, £10 for a "full-price" game, 99p for a budget game (rising to £1.99 and then £2.99 before the end of the 80's). Let's ignore the high-end stuff for a while, because people buy stuff just because it's full price and just came out - they are the people who are stupid.
Even taking into account inflation, etc. that is a hell of a markup. And these people formed teams like Codemasters etc. (Two brothers started out programming Spectrum and C64 games under the name Codemasters and soon built a company out of it before the Speccy era had ended.) so it's not like they didn't profit from it.
Now, let's look at the Wii... not the newest console but a good seller. The cheapest "new" (not used) game I can find in an average shop is £10 and it's an unpopular title. The average "budget" game (i.e. a popular game that has had it's run and needs to sell more units) is around £20-30. The "good" games can cost up to £60, not including other hardware bundled with them, and stay at that price for YEARS.
The 99p - £1.99 - £2.99 was a fast expansion of price - 300% inflation within 10 years. But since then, we've seen nearly 1000% inflation in 20 years (£2.99 in 1989 -> £20-30 in 2009), just for budget titles. That's exponential growth. Real inflation in developed countries hangs way under the 5% a year mark, so even with the best maths in the world (you can't really necessarily just "add up" the year-on-year inflation for the last ten years), it's not anywhere near 300% and certainly not 1000% inflation over 10 or 20 years.
Prices will be set to whatever people will pay. Unfortunately, people are stupid and a lot of parents spend this ridiculous sort of money because they think they have to. But for, say, half a dozen new (but been out for a while) games to cost a week's wages for the average person, that's just stupid.
However, the prices of the hardware are relatively static. The Spectrum cost £100-200 when it came out, the same price bracket as the Wii. The hardware has inflated a little but not anywhere near as much. Considering that is bound by real-world economics like availability of parts, bulk-orders, raw material prices, I expect it to model inflation quite well and it does. But the software seem to be nothing but pure profiteering - probably based mostly on the fact that once you've bought the hardware, you "have to" buy games for it.
Steam's sales are great. I haven't bought myself anything on Steam in years (I bought my brother a birthday present of Half-Life 2 when it first came out, and nothing before that at all) but I went on there the other month and ended up getting about 12 games for about £25. That's perfect for me, and they were all games I wanted, all big names, two Half-life 2 episodes, the entire GTA and UFO series, (but not GTA4) etc. I could easily have bought another 12 games for around the same price. But when I look at the "normal" prices of some of that stuff, I shriek in horror. £30-50 for a game? Come on, that's *4* DVD's even at "brand-new" pricing, and there's no way that a Rainbox Six game costs as much to make, even taking into account the difference in the amount of final sales, as four Hollywood movies. £50 is a LOT of money. That was once-a-year birthday-treat kind of money back when I was a kid and I could make that run to games, films, books, magazines, etc. for ages. Now that's the price of one game (which isn't guaranteed to be a blockbuster). Inflation hasn't grown that fast.
The scales aren't right - software is far too expensive, especially for the effort that goes into updating and supporting most of it. Multiplayer games are left to die after a few years, patches dry up a matter of months after the initial release, support is non-existent fo
I remember being SHOCKED at the prices of games on Steam. They sold, and still sell, at the exact same price as games at MSRP, which as we all know is more than most stores, let alone online retailers. Yet, apart from the expense of running steam's servers/bandwidth, it looks very much like Gabe Newell just eats up what would have been the costs of distribution, media and the retailers approx 30% cut on top!
Why is this not coming back to us, at least in part? When we were told that one of the advantages of online distribution was a reduction in costs, were we expected to celebrate a rise in profits for industry players? I think we all rather expected online distribution to make games cheaper! Hell, Bioshock RAISED the price of games when it was released on Steam.
When you combine this with the fact that Steam has cut users off from their games who have LEGALLY saved on the price by buying from a different country, and you've got one of the biggest contributors to the high cost of games preaching about how games should be cheaper. To quote the movie Airplane: What an asshole!
Same thing here. Like a film, a game that was good 2 years ago is still good today.
The Cloud - because you don't care if your apps and data are up in the air.
There's an interesting point: Why the need to buy games at launch? It's not like games vanish in a matter of months. If you're constantly, say, a year behind the curve, you avoid having to keep your hardware on the cutting edge and you still get to play as much as you like, since a game released a year ago is new to you. It's not like there's a huge amount of (or, arguably, any) improvement happening in games in terms of how much fun they are to play, the graphics just seem to be getting more realistic.
Two words: Networked gameplay.
When you're online you need to be seen playing the very latest game, right?
I mean playing last year's game is like listening to last year's music - not something you want to be seen doing in public when you're under 25 years old.
No sig today...
Many people seem to be unaware of the fact that games, music, films, etc. are all part of popular culture -- a talking point amongst friends, a common thing to bond around, etc. There's a (certainly ignorable, but nonetheless real) need to buy these things at the same time as everyone else, if you want to share the experience.
And yes, this is part of why information should be free to all, if it can be copied at no cost.
If a game can be finished within a couple of days and has no replay value, is it really worth buying in the first place?
I am TheRaven on Soylent News
Well, for me, there are developers like Valve whose products have demonstrated a truly well-done and polished quality that honestly deserves $50. Some other non-Valve titles I've acquired over the last few years that I truly would not mind having to spend full price on include Persona 3 and 4 (both of which were less than full price), Super Mario Galaxy, Civilization IV, Bioshock, Sam and Max, No More Heroes...
I think my point is simply that no, the price for games isn't too high (from my perspective)... if the game is actually WORTH that much. The above games were polished and fun. But I've also bought a lot of games not on the above list and when you consider, for example, that Persona 4 provided over 100 hours of very well-done RPG gaming, why should I feel the need to pay the same if not more on a game that will not provide nearly as much satisfaction?
Of course personal tastes come into play. I don't care for sports, racing, or fighting games. But when most games clearly do not show even close to the same objective measures of quality as others, it seems apparent that people will buy less.
tl:dr; Some games are worth full price for admission. Most are not.
I buy a lot of console games used at a considerable discount (if you're willing to wait for the latest and greatest to age a little you can get a huge discount this way). The thing that REALLY worries me is the move towards online distribution, which would destroy the secondary (used) market. I'm just fine with new games costing $60, as long as I can buy it used a year later for $20-$30. I would much rather have it that way than a download system where a new game costs $50, and a year later it still costs $50 because you can't buy it used.
SJW: Someone who has run out of real oppression, and has to fake it.
I still play the old Counterstrike, Warcraft 3 Frozen Throne online and sometimes Starcraft with my friends. If the game is good you find people playing it long after it becomes "old". The fact that you can't play a game after 6months means it wasn't really good to begin with. Those are the same as all the commercial music nowadays: everyone is crazy about them for a few months and then no-one even cares about them. So no thanks, I'll stick to the quality stuff, not the consumerist crap. Like others said before, this works for movies, music and other kinds of entertainment too.
ics
Obviously there is a huge potential for for Valve to cut costs and maintain the same level of profits by selling direct to the customer, and they would probably *love* to do just that. The problem is that retailers tend to get pissed off when they are getting undercut by the wholesaler.
Think about it: you pay valve $32 for a copy of L4D, and you turn around and mark it up to $50. A month later valve turns around and sells that game --directly to the consumer-- for $25. Hell, that's $7 less than what you paid! You'd be a tad pissed, right?
I imagine that valve is walking a bit of a tightrope here. Pricing L4D at $25 wasn't so much a gamble in terms of whether it would boost sales (thats obvious), but of how retailers would react. It may be a test of whether valve can just write off retail altogether and go it alone with digital distribution.
Let's also not forget inflation. Let's compare today's games to the games of the 80s and 90s.
A top-priced game costs $60 today. But then consider the budget that goes into making the massive 3D graphics, including modern rendering and lighting techniques, R+D, possible budget for voice actors (and unlike the 90s, they can't just rely on local talent, some of these games require big names), etc. All that budget is being used on games that cost $60, surely, but adjusting for inflation, a game that costs $60 in 2009 would equal half-price in 1989.
Let's stick with 1989. Back then, new games for the NES typically went for $50. Then, consider that proportionally, game budgets were much, much smaller - even when you adjust for inflation - and then affix 2009 inflation to 1989 prices; that $50 game cost about $85 when adjusted (calculated here: http://data.bls.gov/cgi-bin/cpicalc.pl).
Plus, once you get into subjective arguments, you can argue that the quality of games today has gone way, way up; yes, there's a lot of crap out there, and like some of you, I haven't fully evolved from my 80s self and aren't very good at 3D action/platformer games, or FPS titles. Taken on the whole, the average game today is much, much better than the average game of the 80s was; the crap is still crap, but the ratio is much better today than back then.
It can be argued that the American per capita income hasn't adjusted properly with inflation - that's an argument to itself - but I think that the main point stands: we're getting more games today than twenty years ago, we're getting better games, we're getting them comparatively cheaper than we did in the 80s, and companies are making less money than they did in the long run (on average).
Let's stop dilly-dallying and just change "-1: Overrated" to "-1: Disagree" or "-1: Doesn't Subscribe to Groupthink".