Why the end of the $60 video game is near

[JonLP24]

Last edited Wed Apr 18, 2012, 09:13 PM - Edit history (1)

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According to The NPD Group, physical content sales were down 8% in 2011. This year hasn't been a cakewalk either, with sales continuing to slide. Though some of the blame can rightfully be foisted upon the decline of the once-mighty Wii, it's apparent that people aren't buying games like they used to, and the industry is scrambling to figure out why. But most agree that it begins — and likely ends — with the high cost of new games.

The sentiment that games cost too much is certainly not new. Wired's Chris Kohler recently outlined a list of reasons games cost too much and combated the argument that the used game market can be blamed. Nexon America's CEO Daniel Kim told GamesIndustry International that "Free-to-Play" games (often called "Freemium" because users are incentivized to pay small premiums for more content) are not going away and the traditional model will have to change.

He's right. $60 has always been an embarrassing, crippling barrier of entry compared to gaming's entertainment peers. A brand new book, DVD, or CD rarely breaks the $20 mark, and even the highest tier Blu-rays cap out at around $30. Why are new games so pricey?

Publishers have long blamed console games' high price on a plethora of issues. Skyrocketing development costs is a biggie, as is piracy. Most recently, publishers are taking aim at the used game market, charging that the buying and selling of used merchandise is taking cash out of their pockets. But whatever impact on profitability these concerns have, it doesn't change two monumental problems:

http://games.yahoo.com/blogs/plugged-in/why-end-60-video-game-near-181412574.html

The 2 problems are(from the article), $60 sounds too expensive & people are having fun playing affordable games.

I believe something like this was posted on DU2 but this may have some more recent info.

[Neoma]

1. Well, I'll scramble for Diablo 3...

[Broken_Hero]

2. Frankly, 60$ is way to high....

I hardly ever buy new, most of the new games I've gotten(at release) was Batman Arkham City, and Skyrim. I usually wait until the game drops to 30$ or less, unless its a game I must have(like Arkham City, Skyrim was a gamble on my part).

I never understood why games cost so much, for example, Superman Returns the movie cost about 225 million, and took around 18 months to make...the combo pack for the movie when it came out was 25$. If new games started out around 30$ I'd be more willing to buy new when they first come out(or within first 6 months).

[JonLP24]

3. It's a demand issue as to price along with competitor prices

You raise the prices when demand is excessive and lower it when it is scarce, the price is usually somewhere in between. Businesses will give all sorts of reasons why something costs the amount it does except for that one which is usually correct. Madden series is a good example of this, the prices drop drastically as the new version comes out which indicates the demand drops drastically as consumers want the new version that is more current to real life rosters, stats, player abilities. Also if you sell something like potatoes and raise the price above competitor averages, your business will likely suffer. Game companies, noticing everyone else has their new releases at $60, they can get away with it, if they raise it to perhaps $70 consumers will just by the cheaper game. Once you take the case out of the wrapper, fewer people want it or will be willing to pay as much for it and the prices indicate that.

Of course production can be costly but the best way to deal with those costs is to list the product at the price that makes you the most money. If you price something too high you will make less money if fewer enough consumers are purchasing it than if you had the price lower. The inverse is also true so it usually the highest price the producer can get away with.

[Broken_Hero]

4. Makes sense to me...

A side note about Madden, I usually get the edition of the previous year(or even two years back) when the new title comes out, because like you stated when the new version comes out the last years/previous year editions prices drop like a rock. I treat almost all my sport games that way and I do notice that of all the used games I see the sport ones usually do drop in price really fast when the newest version comes out. Speaking of which....I need to price some Madden 2010's, I haven't gotten one since 06.

[Posteritatis]

8. It takes a lot for me to consider spending that much on a title

I'll drop full price on Paradox titles (even with their frequent sales and the like) mainly because they're so directly up my alley that I have a "dammit, take my dollars!" reflex and would like to see them do well.

Past that, I paid full retail for Mass Effect 3 (for a smiilar reason) and ... well, that's it for the last while. Most other stuff I buy is moderately to extremely indie.

[Ter]

10. Any reason why you put the dollar sign after the number, rather than before?

First I thought it was a typo, but it was done four times.

[eShirl]

5. a price of $60 must encourage piracy. n/t

[Giantsfootball10]

6. Lets hope..

[hibbing]

7. Price fixing thrown into the mix

Hi,
Why has there not been a price fixing case brought against retailers/producers like there was for CDs? The new games are the same price no matter where you go, I find that more than a coincidence. I got 13$ from the class action suit for CDs several years ago.

Peace

[SidDithers]

9. So much gaming these days is done on-the-go...

on smartphones or tablets. I play fieldrunners, or solitaire, or angry birds on my iphone almost as much as Skyrim on my laptop. When you can buy entertaining, playable, portable time-wasters for $1.99, it's no surprise that folk are less likely to shell out for big the newest PC or console game.

Sid

[Neoma]

11. Unless you consider yourself a serious gamer.

I once knew someone whose entire basement was just covered with shelves with just videogames all over. Now
that's dedication.

[nadinbrzezinski]

12. World of Tanks

and a few others have indeed changed the model.

[bluedigger]

13. I'm down to two or three a year.

I got sick and tired of getting burned by unplayable betas with good packaging.

I stick to a few trusted franchises now.

[Inkfreak]

14. I almost always buy used at GameStop

Just can't justify $60 to the wife lol. She hates video games. My one weakness is Assassins Creed. Love, love , love that game. I'll usually try to sneak that one by the wife