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Why the end of the $60 video game is near.


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#1 Bromance

Posted 18 April 2012 - 06:04 PM

 

There's a war going on in the video game world, but it's over dollar signs, not virtual land.

A boxed copy of Call of Duty: Modern Warfare 3, the world's top-selling console game, costs $60.Angry Birds, the world's biggest mobile game franchise, costs $1 for software that you can download in under a minute. The pricing gap between what's traditionally considered the highest-tier premium games and the fast-evolving mobile, tablet, and social gaming market is widening, and it's spelling disaster for countless game makers caught in the middle.

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:

Psychologically, $60 just sounds expensive. This isn't anecdotal, this is common sense.  Unless you're financially independent, $60 outright repels a vast slice of the entertainment consumer populace that the games industry desperately needs to convert to grow and survive.

People are having fun playing more affordable games. The choice and product quality at the bottom end of the pricing scale -- anything under $15 or so -- has grown tremendously in a relatively short period of time. Games like Draw Something, Angry Birds, and Infinity Blade aren't only played by 'casual' gamers.

That being said, the top perennial franchises like Halo, Elder Scrolls, Battlefield, and Madden aren't going anywhere, at least for a while longer. Games that critics and consumers universally laud as "must-haves" can continue to support this massive premium.  But it's the mid-tier titles, the unestablished IPs, the riskier endeavors, the worthwhile games that don't quite master the magic formula, that will never get off the ground. Even highly-praised franchise entries like Rayman Origins struggle, and publishers like THQ have been threatened with NASDAQ delisting despite enjoying sales that "exceed expectations." Black Rock, creators of critical darlings Pure and Split/Second, were denied sequels by publisher Disney to focus on freemium content and eventually shuttered entirely.

The most egregious example of old-school thinking is the release of Plants vs. Zombies on PlayStation Vita.  One of the rarer "crossover" successes, the game costs $3 on the iPhone but a whopping  $15 on the Vita for an identical product. Why? Because it's a dedicated gaming device and core gamers are accustomed to paying higher premiums. How long can this madness last?

It's not just Facebook and smartphones that threaten to steal that audience. The consoles themselves have thriving online stores in Xbox Live Arcade and PlayStation Network, offering gaming alternatives with high production value and more relaxed pricing. Just look to successes like Battlefield 1943 (over 1MM units sold), Xbox's Castle Crashers (sold 2.6 million), and recent PS3 hit Journey, which quickly became the PSN's fastest-selling title ever.

If the Old Guard would just drop the charade that $60 is the only feasible price point, they might find an unexpectedly higher volume of purchasers to mitigate the reduced revenue per gamer. I realize that the $60 Call of Duty costs some tens of millions more to develop, market, and distribute than the $1 Angry Birds, but is there really a $59 differential there? Someone wiser than me in economics can surely model up a theory that finds a middle ground.

 


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#2 Alex Savage

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Posted 18 April 2012 - 09:35 PM

Great article... and seriously if this actually helps making the prices go down a bit, I'm not against it.
Actually ... 60$ for a game that's bugged & glitchy out of the box seems a total rip off to me and I just don't understand why it's like that.
People... I mean, the guys behind CoD/Battlefield, have they lost their sense of priorities ?!
Money first then... maybe I'll fix your issues ?

Back in the days, for most games I've played... it always was "I'll work my ass off fixing this little bug then I'll think about the money"
(This example is directly taken from Counter Strike Beta which was 100% free if you owned a copy of Half Life)

I might be going to far by saying "Capitalism is killing the game industry" but ... at some point, it truly feels like that to me.

#3 -Grimreaperx2-

Posted 19 April 2012 - 06:45 AM

This is partially why I dont play very many games. But these publishers also know that games are crack for some people and you know what people do for crack money (no joking here, im being serious).

On top of the 60 they charge, most publishers are now also making the DLC stuff. Which is great, but COD is terrible for charging out the ass for 3 guns and 5 maps. Another thing I hate about cod games is how long the dam price stays up. It took Modern Warfare 2 to drop to even just 30 dollars. For the longest time even after Black Ops was out, it was still 50. LAME!

And making up for lost profit from piracy by increasing the cost of the game? And then complain when people opt to buy a used copy instead? Please...

I figured the 60 dollar thing would come back to bite them in the ass.

#4 Bromance

Posted 19 April 2012 - 03:04 PM

I think the COD set up is the worst.. MW2 you paid $15 for a map pack, that was 2 maps from COD4... WTH.

But as stated, you pay 110 for a game (DLC plus), 60 for xbox gold to play the game, and a year later, all over again, and the old game is all but worthless.

#5 Elegy

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Posted 19 April 2012 - 03:43 PM

Great article! I will honestly pay any amount for a game if the value is there. I'm seeing companies produce more and more games with less and less value. I may not be playing Battlefield 3 anymore come the next DLC if DICE doesn't fix the game first.

#6 Nova

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Posted 20 April 2012 - 01:57 PM

I agree with Elegy, if a game as the value per $ that I look for, I will pay for it.

I have found cheap games that I can play for 10x as long as some of my expensive ones.

:) its all about what the consumer prefers but nonetheless, great article!

#7 yukyduky

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Posted 22 April 2012 - 05:08 AM

Really good article! All we can do is hope they get the hint of what's happening and make change. Maybe the wave of indie games will whack some sense into them soon.

#8 slayer99199

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Posted 22 April 2012 - 11:19 AM

Game development is an expensive proposition when you factor in development, publishing, manufacturing, distribution and marketing. The cost for doing a game like Angry Birds can't compare to a game like BF3 as it's very small, simple, has online distribution, and is on limited platforms (IOS and Android). MMORPGs, and MMOFPS games like MW3, BF3, etc...are on PC, XBox, and PS3, are huge, and have multiple distribution channels (online, retail, etc).

I've been playing shooters since Wolfenstein...and FPSs started at around $40. 20 years later they're at $60. That really isn't too bad.

The main problem I have as opposed to the old days is that if a game sucked, you could return it. Now you're just screwed.

#9 Nova

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Posted 22 April 2012 - 04:17 PM

Yeah that makes sense slayer.

I think my whole thing is that I can get more satisfaction/dollar from my 30$ RTS than like BF3.

#10 Rexperience

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Posted 22 April 2012 - 05:03 PM

Yeah that makes sense slayer.

I think my whole thing is that I can get more satisfaction/dollar from my 30$ RTS than like BF3.


Seriously..I get more fun sometimes from Counter-strike and the graphics and gameplay aren't seemingly as advanced as battlefield.

#11 dr3am5

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Posted 24 April 2012 - 04:58 AM

Great article... and seriously if this actually helps making the prices go down a bit, I'm not against it.
Actually ... 60$ for a game that's bugged & glitchy out of the box seems a total rip off to me and I just don't understand why it's like that.
People... I mean, the guys behind CoD/Battlefield, have they lost their sense of priorities ?!
Money first then... maybe I'll fix your issues ?

Back in the days, for most games I've played... it always was "I'll work my ass off fixing this little bug then I'll think about the money"
(This example is directly taken from Counter Strike Beta which was 100% free if you owned a copy of Half Life)

I might be going to far by saying "Capitalism is killing the game industry" but ... at some point, it truly feels like that to me.



Dude that is insane to event hink that. Capitalism killing the video game industry lol that is obsurd. The video game industry only got so big because of capitalism. And if anything capitalism and free markets will find a way to correct this imbalance to find a way to survive and continue to offer a good product, Because if they dont they will go bankrupt and not sell anyhting. So obviously sixty dollars isnt that high of a price because people are still willing to pay it the get the video games they want. Beleive me if the price was too high it would have been corrected already cause they wouldnt make any money and they would lower the price until they get the money they ened for the project. Point being if you dont like the 60 dollar proce dont buy the sixty dollar game. If there is enough people that find the price is too high and dont buy the game they will lowert the price. If they make enough money at 60 dollars they willl keep it 60 dollars. That is the beuty of free markets which is the only way to liuve prosperous. Any other way of thinking is insane and denies the fact that humans aren't perfect and people act in their own self interest always.

#12 Bromance

Posted 24 April 2012 - 12:58 PM

Dude that is insane to event hink that. Capitalism killing the video game industry lol that is obsurd. The video game industry only got so big because of capitalism. And if anything capitalism and free markets will find a way to correct this imbalance to find a way to survive and continue to offer a good product, Because if they dont they will go bankrupt and not sell anyhting. So obviously sixty dollars isnt that high of a price because people are still willing to pay it the get the video games they want. Beleive me if the price was too high it would have been corrected already cause they wouldnt make any money and they would lower the price until they get the money they ened for the project. Point being if you dont like the 60 dollar proce dont buy the sixty dollar game. If there is enough people that find the price is too high and dont buy the game they will lowert the price. If they make enough money at 60 dollars they willl keep it 60 dollars. That is the beuty of free markets which is the only way to liuve prosperous. Any other way of thinking is insane and denies the fact that humans aren't perfect and people act in their own self interest always.



LOL's You do economics yet? Anycase, in case you haven't noticed, PC gamers (majority anyways) don't buy the games, so they just make console games and leave PC out of it, or give us a shitty port so they really don't lose money on it. They blame piracy, but any PC user with any clue can see the 360 games are pirated the day of release too, just an excuse to lay blame else where so they don't have to say sales suck. Look at COD MW3 with the Elite, perfect current example, no DLC until you can do Elite. No time soon for PC users.

#13 AOBLXIX

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Posted 24 April 2012 - 01:27 PM

Do we remember the days of buying a game that was already completed? Or the games that the indie developers actually took the time to fix things that might have been wrong. . . in a timely manner no less.

A smaller group of developers pushing out frequent updates that are better than one huge update, vs a large group of developers who seem to be stuck in their own little world. . something is wrong here. .

#14 Rexperience

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Posted 24 April 2012 - 04:32 PM

Do we remember the days of buying a game that was already completed? Or the games that the indie developers actually took the time to fix things that might have been wrong. . . in a timely manner no less.

A smaller group of developers pushing out frequent updates that are better than one huge update, vs a large group of developers who seem to be stuck in their own little world. . something is wrong here. .


Yeah, the wrong people are controlling this. Let's start our own company ;)

#15 Bromance

Posted 24 April 2012 - 07:25 PM

Indie company's on steam are pretty epic. Nice system for updates, weather large or small..... The avenue through steam has made a lot of indie companys work well, along with the 360 store and PS3 store.

#16 Nova

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Posted 25 April 2012 - 05:55 PM

I am seeing a ton more Free To play pay to win games now :(

When in doubt get your credit card out..

#17 VinasSol

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Posted 02 May 2012 - 08:54 PM

With the era of hacking games with torrents, games that require server interaction like Battlefield 3 will become more popular than ever. And if the game server can utilize internet browsers that allow them to control all aspects of the games, then that is a win win for the game producers.

#18 INFIDEL_JIHAD

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Posted 17 May 2012 - 06:01 PM

I dunno i don't think $60 is too much to pay for a game like BF3 where i get over 200hrs easy out of the multiplay ... there's not a lot of things u can spend $60 dollars on these days & get over 200hrs out of (think about what it costs for 2 people to go out & see a 2hr movie add snacks maybe a drink? ) ... as for the games coming out to where they need patches Vs games of old that did not have a need for a patch you have to remember those old nintendo single play, intellivision, atari, gameboy, ect the were not nearly as large or intricate as what's being put out today

#19 xSteeLer

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Posted 17 May 2012 - 09:53 PM

Maybe I am in the minority, but I believe $60 games are fine.

Battlefield 3 has brought me over 300 Hours of entertainment. Is that worth $60? Yes.
While a $20-30 Blueray Movie lasts maybe 4 Hours, if you watch it twice.

If I get at least 24 Hours out of a game, I am happy.
Maybe this is just me. I could totally see how someone could not like the price of new games, but I think it is fair. (for most games)

#20 Bromajesty

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Posted 22 May 2012 - 02:33 AM

some games are worth it. Sometimes you should pay someone who puts out a top notch product what they are worth. It would be cool if we had a beta for pricing games open to the public. On the flip side , I love it when you get a great game for cheap(meaning never discounted from original price) and the game blows you away. That tells me the developer is empathetic to real gamers. So I buy everything they make regardless if it sucks. Until too titles many start to suck! But if I knew the true math on a games development it would help me to determine the games true value, once you factor in all the details.
There are some cars I would drive no matter what the year was, just because I know how much care and time was put into engineering, design etc. Regardless of what year it was made in(old school or new school) and thats the level of quality I want out of a $65 game after tax. Games should be held to that standard if they are going to cost that much. There wouldnt be such a short shelf life for game titles. Sometimes it seems like you have to hope and pray a title will be good or not redundant as the other titles (same type guns, same objectives etc). So more outside input would help insure quality gaming and is already helping fuel a gaming revolution. Assuming ownership of something is usually the first step in bringing the most creative thought processes out of people. Yes across the board fairer game prices would be great.

#21 Xashan

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Posted 22 May 2012 - 04:34 PM

I dont think the price of AAA games will change anytime soon. What shouldnt surprise me is that i still hear the same complaints that i heard in the late 80s and early 90s. Be glad you dont have to call the developer and request a 3.5 floppy by mail. But with the availability of good internet access it seems that the use of biweekly small updates that could be easily corrected rather than giant game breakers seems lost on EA/Dice. While i know many dont like the advent of seperate online passes for each player I feel that this is actually a good thing in that all pplayers will give something in support of the game. Now Gamestop will have to drop their price accordingly. Ive always thought only $5 discount (on new titles) was odd because I would buy the new copy for only that difference.

#22 Sandy106

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Posted 27 June 2012 - 07:07 PM

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:


LOL I'd just like to point out what a ridiculous argument this always has been, and always will be. When was the last time you saw Ford or GM bitching about used car sales? Home builders complaining about used home sales?

LOL, ridiculous.

I agree with what other people are saying about value per dollar though, $110 for BF3+Premium really isnt much at all if you play it for 200-300 or more hours. The thing that does piss me off though is how lazy they've been with bug fixes. It's somewhat more understandable on consoles where patches cost money to put out, but there's no reason for it on PC.

tl;dr good article but the industry is blaming all the wrong people, like usual.

#23 TheDrunkenBear

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Posted 06 July 2012 - 01:36 PM

Games with actually developer studies (MW3, BF3, COH etc etc) will always be more expansive as tens if not hundreds of people are involved in making these games whos qualiy will be always superior to games such as angry birds. But the decline in sales is mainly due to the economic recession in the US and Europe as people unfortunately first save on entertainment then on other things :/

#24 SimplyOJ

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Posted 06 July 2012 - 03:15 PM

intresting topic.
Eventho the new games are technologically way advanced compared to years ago, the content has been going backwards. You get a great looking game but you finish the single player part in a few hours and a lot of times the game is not "finished" yet and contains still a lot of glitches and bugs.
Bring out a game with content and people will pay the money for it.
I still not see a phone or tablet completely taking over consoles or PC gaming.
The free to play games can be a lot of fun, If they keep maintaining those and wont let them turn into 1 big money making machines.

#25 Joey

Posted 08 July 2012 - 05:34 AM

Just a note to people who dislike 60 dollar games, saying they are too expensive.
Can you guys stop complaining about 60 dollars seeming expensive! Here in the perfect land of Australia, physical and digital games are 80-120 AUD EVEN WHEN WE WE 1.26 TO EVERY US DOLAR (so do a few calculations that would mean a game would be around 140-160 US dollars). Further more whenever an Australian tries to make a game and get into the 4.3 billion dollar industry here in Australia, they get bought out by a chinese or US company. I'm surprised the makers of Fruit ninja are still an Australian licenced game producer. Australian gaming industry is losing money every year because games in america are CHEAP! so lastly I'd just like to say I laugh at anyone in america who says games are too expensive as they are hell cheaper then being here.

my 2 cents with a little rant :)
JoeyT2




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