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EA Outs Battlefield 4, Plans To Charge $70 For New Games
Justus writes "Posts at NeoGAF and IGN show that a quickly-removed Origin advertisement for Medal of Honor: Warfighter reveals plans for Battlefield 4 and a new-game cost of $70. With Battlefield 3 DLC promised through 2013 and PC games cheaper than ever with things like the Steam Summer Sale, are gamers ready to buy Battlefield 4 at next-gen pricing?"
Your argument is flawed--$35 of that $70 price was for the media itself because cartridges were expensive little buggers. Today DVD's cost pennies.
Sales of games have gone up as well. More people buy them, and marginal cost has gone way, WAY down. Console cartridges had a fairly high marginal cost. Those chips weren't that cheap. DVDs cost next to nothing, a full boxed game costs $1-2 at most to make. Digital distribution is even cheaper, costing only a few cents for a download at most and the cost is borne entirely by the company running the DD service.
Also DD allows for more profit per title. Steam, Impulse, etc take less of a cut than retail. Standard retail markup is usually 100%. So if you want a retailer to sell your product for $60, you have to charge them $30. Just the kind of margins required to make money with all the costs of retail. DD charges less, Steam doesn't reveal their specifics but it is more around a 30/70 split (70% to you) than the 50/50 of retail.
Of course if the DD happens to be owned by the company then all they pay is the cost to host and transfer it to customers (usually they outsource that to someone like Akamai) which as I said is only a few cents.
So really it seems to make sense that maybe games should be costing less. Yes the product cost is higher, but distribution costs are very low and of course we all know from ECON 200 that lower prices equal more sales.
The question is all one of value for the money. If they want $70 for their game and other companies will sell them on sale on Steam for $20, then maybe they don't get many people paying $70.
Remember when Street Fighter II came out for SNES? It was $70 at Target. That was almost 20 years ago.
A large part of that $70 price tag was actual manufacturing costs. Street Fighter II was the first 16MBit SNES game, and producing ROM cartridges that large was not cheap at the time.