The Price of Games

Games upon release can cost as much as £50-£60. A month later and then are half that price or lower.

Since the start of the financial crisis what have you noticed about films? They are almost at give away prices aren’t they. Sure the latest films aren’t, but it takes no time at all until we see them heavily discounted. Why this is so, is quite obvious, as it’s the combined effect of piracy, streaming services and cable/satellite services all being an alternative, high quality form of distribution of films. Together they have put a great deal of pressure on the street price of a DVD or Blue Ray.

Streaming films have forced DVDs to drop in price. Even movies that not that old can be bought for £2-£3 at a supermarket. As streaming comes to games, could it have the same effect?

The effect of this though has been to devalue, not only the value of the physical copy of a film, but to devalue films themselves. They are throwaway items, easily replaced for £3. They cost less than a magazine ABOUT films.

Games, it would seem, are now in a similar dilemma. Games such as Call of Duty and Fifa can maintain their street price for months, in effect until the game is superseded with a new version. Most other titles cannot and many, big name games come onto the market, it would seem, with unreasonable expectations on what they can charge. They then fail to make the impact they hoped for and within months, if not weeks are half price, or less.

Go into your local supermarket and you’ll find Dishonoured, Tomb Raider and Hitman, all recent AAA titles, being sold for £12-£25 each. Now if they have sold at that price to begin with there is a chance that more copies would have been sold at the time where their marketing, PR and other exposure were at their maximum reach. By launching at £50, consequently failing in the market and only then having their price reduced, the number of consumers who might buy the game, even at the reduced price, is lower simply as the game is not this week’s must have title anymore. We have all moved on.

Not only that but for those who are witnessing this trend and aware of it, are holding out and calling the publisher’s bluff. We know that unless it’s COD or FIFA, or Halo, there is a good chance that in 2 months it’ll be half price without getting a second hand copy. The effect of launching at one price and then lowering it, is to devalue the product. Once we start devaluing it’s hard to know where the bottom is. Better to launch at a price and then hold it.

We want more games like Hitman. So how can we make sure they are economically viable?

Why does this matter to consumers, as well as to accountants? Games launching at the wrong price will mean poor sales. Poor sales will mean poor returns and poor returns will mean less games. The industry is still trying to justify too many games as triple A products. The problem is also exacerbated by the second hand market, which is more acute with games than with films or music, due to the price of games. A number of people have long said that rather than banning second games, or doing online passes, that retailers refuse to stock one within 2-3 months of the game launching. The logic is, this might allow more copies to be sold with money going to the publisher and developer before the rest of the game’s community is made out of recycled copies.

Perhaps a few publishers have realised this isn’t sustainable and have experimented with a part up front price, balanced by internal micro-transactions to allow a longer tail of income to be derived from that game. Titles such as Dead Space 3 have trialled this. However the trial hasn’t been ‘fair’ as the game still launched with a AAA price, which made the micro-transactions look like a stab at being greedy by EA. Perhaps, if the game had launched at £20-£25 WITH micro-transactions it would have been looked upon more favourably by consumers and critiques alike.

Ironically, despite all the criticism they get, Nintendo, more than anyone has managed to maintain the street value of their titles consistently over the last 10 years.

The Xbox 360 and PS3 generation was all about the AAA title, and the digital XBLA/PSN title. The £20 AA title was supposed to be dead, with not much being produced between the £5-10 digital and the £50 AAA price points. It seems that now is the time to re-evaluate this model and ask if it’s time to bring back the £15-£25 game, supplemented by micro-transactions, DLC, or a monthly or quarterly subscription (which could be as little as £1 a month for some titles). If nothing is done, then this effect of devaluing the £50 price point will continue until the consumer starts to question if ANY game is truly worth £50, including the latest COD or Fifa…

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