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Why Games Cost $60

Soulskill posted more than 4 years ago | from the get-your-fingers-out-of-my-wallet dept.

The Almighty Buck 536

eldavojohn writes "Crispy Gamer is running a very interesting article on why games cost $60. Many games start out at this retail price — but why? Did the makers of The Beatles Rock Band game just happen upon $59.99, as did the makers of Batman Arkham Asylum? After all, those two titles surely took different amounts of man hours to develop, and result in different averages of entertainment time enjoyed by the consumer. They interview a director at Electronic Entertainment Design and Research, who breaks down the pie as $12 to retailer, $5 to discounts/returns/retail marketing, $10 toward manufacturing costs and shipping. That leaves $30 to $35 in the hands of the publishers. Though lengthy, the article looks at three forces of economics on why game publishers continuously end up in lockstep for pricing: sensible greed, consumer stupidity or evil conspiracy. When asked about the next step up to $70 or $80, Hal Halpin (president and founder of the Entertainment Consumers Association) says, 'I'm not sure that we'll see a standard $70 price point at all. To my mind, emerging technologies, subscriptions and episodic and downloadable content should all enable price drops — increasing accessibility to a much wider audience.'"

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536 comments

Its justified price (5, Insightful)

sopssa (1498795) | more than 4 years ago | (#29542659)

Many games start out at this retail price â" but why? Did the makers of The Beatles Rock Band game just happen upon $59.99, as did the makers of Batman Arkham Asylum? After all, those two titles surely took different amounts of man hours to develop, and result in different averages of entertainment time enjoyed by the consumer.

It's the same thing with movies and music. There's a certain "standard" price everyone goes with, because if they didn't, it'll affect their sales. Going a bit over the standard decreases sales, going a bit less than the standard can increase them. You have to find the fine line.

And to be honest, they $60 price isn't that much if it's a great game. You pay atleast $15+ to go the movies, probably even more if you make a night out of it. You might spend the same amount in bars too. Both of those give only a few hours of entertainment value, and to be honest aren't all that fun all the time. Good games give a lot more entertainment and fun hours. My stats for Left4Dead show 947 hours and I've probably spend *a lot* in WoW too. And dont even get me started on the civilization and settlers series.

That being said, I would probably try more games if they were cheaper. But I still will get the games I want.

$10 go toward cost of goods sold, which includes manufacturing the game disc, shipping the games to the store, and anything else directly related to production and delivery of the game package.

I think digital delivery is something that can bring this price down a lot. Yes, bandwidth does cost, but its nothing like producing tons of dvd's, packaging them, sending them all over the world and delivering to stores. And the user experience is usually a lot nicer, you can easily buy it without walking to store.

And to be honest, game development is no cheap business and it's getting even more costly all the time. Yeah you could argue that theres great indie games that have been developed at cheaper budgets, and you're right; there are. But their budgets also are $10 000 - $100 000. It means you have to get lots of sales. And indie developers really cant produce the games like Call of Duty series (specially the modern warfare ones!) and Left4Dead and Half-Life 2. There is place for indie developers, but you need professional commercial game developers too.

Taco Theme (-1, Troll)

Anonymous Coward | more than 4 years ago | (#29542697)

cocksucker! cocksucker!
I want suck a nigger's cock,
I want to fuck some cock.
I want suck some faggot's cock,
I want to rock a cock. ...

Re:Taco Theme (0, Offtopic)

oldspewey (1303305) | more than 4 years ago | (#29543159)

One time many years ago, a bunch of us were hanging out at a friend's place watching movies, drinking beer, cracking jokes, shooting the shit, and just chilling out. This was back when most of us were still living with our parents, and the guy who's house we were at - I didn't really know anything about his family or anything.

So we'd been there for a couple hours when all of a sudden his younger brother - who I didn't even know existed until that very moment - comes tearing into the room and starts running around the furniture in circles. He's panting and making really strange guttural sounds and every now and then he'd blurt out random words. It was all just really mentally jarring after the relaxed, sociable time the bunch of us has just been having.

The guy who's house we were at stood up after probably 30 seconds, scooped up his little brother by the waist - not in a pissed off way but in more of a fun, playful way - and hauled him out of the room. I heard voices in another part of the house then a minute later the guy came back, sat back down and said "sorry about that guys, Kyle has downs syndrome."

I nodded and tried to turn my attention back to the movie, but part of my brain was still going "what the fuck was that?"

The above post left me with the exact same feeling.

Re:Its justified price (4, Insightful)

omgarthas (1372603) | more than 4 years ago | (#29542725)

Yeah, Batman is a very nice game, I enjoyed it, but after 10 hours, I'm done with it and it offers no replayability (sorry spelling), on the other hand, other games (specially RTS or Tycoon series), cost 45$ and I would spend my entire life playing those if I could

most games == Pussycat Dolls (5, Insightful)

thule (9041) | more than 4 years ago | (#29543197)

Trent Reznor feels the same way about many games these days: Joystiq interviews Trent Reznor [joystiq.com]

A timeless game is well worth $45 or more. I have been finding old GBA carts that are selling for more than $45 if they are in good condition. Many of the "hardcore" games on modern systems are not nearly worth that price point. Wait a year and you will see how much the game is *really* worth.
It is amusing that game companies want to shut down used game sales. Maybe they should work on making timeless games with good content.

Re:Its justified price (3, Interesting)

skeletor935 (790212) | more than 4 years ago | (#29542735)

The thing I hate most is that for xbox360 (sure it's the same for PS3 but I don't own one so I don't know) every game is $60. Some games definitely deserve it like the huge RPG games with fantastic stories and voice acting and emersive worlds, the great multiplayer FPS games, and so on. Then there's the other games, which probably spent a quarter as much time in development than the much better games, and all of a sudden the developer is like "hurr hurr it's in high def and on the 360 it's worth $60" Games based off movies come to mind first-- usually terrible mock ups hashed together for insta-profit from the movie's success. Some cartoon graphic puzzle games next. And some blatantly terrible games.

Re:Its justified price (2, Insightful)

LordPhantom (763327) | more than 4 years ago | (#29542821)

Frankly, to some degree I think the current cost of games is a bargain, especially if you compare the price point versus development costs of games of even 5-10 years ago. Paying $60 for a 40-100 hour RPG experience complete with full score, FMV and incredible rendering that took thousands of man-hours to produce is actually pretty cheap.

Re:Its justified price (1)

Mex (191941) | more than 4 years ago | (#29542937)

Wow! Except for your personal experience on L4D (which I hear is a pretty good game), you kind of summarized exactly all the topics the article covers. Someone only read the summary ;)

Because they can (4, Funny)

winkydink (650484) | more than 4 years ago | (#29542947)

It's the same underlying reason why male dogs lick their balls.

Re:Because they can (1)

geekoid (135745) | more than 4 years ago | (#29543117)

No thumbs?

Re:Because they can (1)

navygeek (1044768) | more than 4 years ago | (#29543149)

Survey says.... "Because they can!!" Hell, if I could, I'd never have to leave the house.

Re:Its justified price (4, Interesting)

SensitiveMale (155605) | more than 4 years ago | (#29542979)

"You pay atleast $15+ to go the movies, "

I don't. Matinee prices for me or I wait for the DVD.

I won't pay $70 for a game either. I got burned by immediately paying $50 for the unplayable Splinter Cell Double Agent PC game and I swore off paying those prices. Saved me another $50 when Wolfenstein turned out to be sucky as well but for different reasons.

On the other hand, I paid $20 for Killing Floor and I've put hundreds of hours into that game unfortunately. I'll get Left4Dead when it hits $20 as well.

You suckers keep paying $50 and $60 for games and the prices will only go higher.

Re:Its justified price (0)

Anonymous Coward | more than 4 years ago | (#29543001)

Not that I think your point is wrong, but I'd point out that WoW is not the best example to use here. Not only does WoW cost LESS than the 60 dollar price point - but it brings in $15 dollar a month subscription fees, as well as multiple other fees they collect (for character transfers, faction swaps, etc.)

I'd avoid the games that have monthly fees when talking about this subject - they are a whole different beast. Yes, you can make the point that they provide continued free content and host servers for their game, but there is a reason that WoW is one of the most played (and most profitable) games out there - and it isn't because of a 60 dollar price point.

Re:Its justified price (1)

Geoffrey.landis (926948) | more than 4 years ago | (#29543005)

It's the same thing with movies and music. There's a certain "standard" price everyone goes with, because if they didn't, it'll affect their sales. Going a bit over the standard decreases sales, going a bit less than the standard can increase them.

That's close, but I think the second part of that sentence is "...and there's no reason to go less, since consumers are willing to pay $60."

Price Inflexibility (4, Interesting)

EXTomar (78739) | more than 4 years ago | (#29543033)

What is killing console games is the inflexibility in pricing structures. Although AAA release game is okay at $60, a game like "Darkest of Days" is not. But since they are stuck in the same distribution channels they are forced into this pricing structure that doesn't make sense for the game.

This is why online stores like Steam have taken off. "Plants vs Zombies" is a hell of a lot of fun and would have died at the fixed $60 price. A developer may notice their game sales are slowing down so they do a price cut weekend which is impossible to do with the classic distribution chain. Even in the citation, half of the cost instead of being consumed in the distribution chain just putting disks on shelves can be put elsewhere. I don't have much illusions the big boys with the big games will pass the savings on to us but having the flexibility is at least a start.

Re:Its justified price (0)

Anonymous Coward | more than 4 years ago | (#29543087)

My stats for Left4Dead show 947 hours and I've probably spend *a lot* in WoW too. And dont even get me started on the civilization and settlers series

You need to get out more.

I know I know, I must be new here.

Re:Its justified price (1)

Aladrin (926209) | more than 4 years ago | (#29543147)

Going under the 'standard' price can also decrease the sales since gamers will think the game isn't worth the higher price simply because you didn't try to get it at launch. There's so much momentum for that price point that it's hard to break it unless you're a blockbuster hit, which is how we got from $50 to $60 not long ago.

Re:Its justified price (1)

elfprince13 (1521333) | more than 4 years ago | (#29543155)

Who spends $15 to go to the movies? All the theaters here are $8.75 for a ticket, or less if you have a student id and go on an off night.

Re:Its justified price (2, Interesting)

geekoid (135745) | more than 4 years ago | (#29543173)

"You pay atleast $15+ to go the movies"

I pay 8-9 dollars and that is in a new cinema.

Yes, I will spend more it it's a night out, but not more on cinema ticket.

I don't go to bars. Boring places full of boring people most of whom are vapid.
At least that was my expedience when I was a bartender, many decades ago.

Of course you are basing the starting point for your argument on a false dichotomy. That video games are camparable to a night out.

You should be comparing video game price against developments and other prices in the same field.

Re:Its justified price (0)

Anonymous Coward | more than 4 years ago | (#29543217)

This is why I pirate all my games. Yaarrr! http://www.demonoid.com/ [demonoid.com]

Price Drops (1)

T-Bucket (823202) | more than 4 years ago | (#29542667)

There is no way that price drops are going to happen... The companies see it as having two options, they could drop the price, or keep it the same and make more profit. Which do you think they're going to choose???

Re:Price Drops (1, Insightful)

Anonymous Coward | more than 4 years ago | (#29542749)

dropping the price could bring in more buyers.

Re:Price Drops (1)

HaZardman27 (1521119) | more than 4 years ago | (#29543023)

This has pretty much been proven by Valve through their sales on Steam. They found that if they take, say 20% off the price of a game, it sells in great enough quantity to more than make up for the drop in price.

Re:Price Drops (5, Informative)

Ethanol-fueled (1125189) | more than 4 years ago | (#29542825)

What TFA didn't mention is that the $60 price point goes all the way back to the NES days.

I specifically remember My family shelling out (thanks!) the sixty apiece for SMB 2 and later SMB 3 and Megaman 2 when they were new. I think that the less popular or complex games costed less, but there were some real turds like Legacy of the Wizard which also went for the full sixty.

Re:Price Drops (1)

sopssa (1498795) | more than 4 years ago | (#29542965)

Exactly, and it's quite interesting thing. You can count the lesser userbase as one of the affecting factors why the games did cost so "much" then, but the entertainment value and playing hours weren't even close to what they are now with the same prices, while development costs have skyrocketed from those days. Considering some games take years to develop with multimillion dollar budgets, $60 isn't really that much now a days, considering how much entertainment some games now a days give and how much hours you can spend with them.

Re:Price Drops (0)

Anonymous Coward | more than 4 years ago | (#29543007)

I don't recall ever paying more than $40 for a new NES game. I do remember paying $80 for Street Fighter 2 when it first came out for the SNES.

Re:Price Drops (4, Insightful)

chill (34294) | more than 4 years ago | (#29542835)

Drop in at your local community college and take a course on statistics. Pay close attention to the "profit maximization" section. It'll explain the math behind the relationship between unit cost, units sold and total profit.

Fascinating stuff. If nothing else, it'll teach you to never spend more than $2 on lottery tickets, if you spend anything at all.

Re:Price Drops (0)

Anonymous Coward | more than 4 years ago | (#29543109)

Spending money on lottery tickets is based upon the hope that you'll be an outlier.

Re:Price Drops (1)

Yvan256 (722131) | more than 4 years ago | (#29543051)

Option 1. Drop the price and sell more games (more people buying less expensive games).
Option 2. Keep the price the same and make less or equal profits (the same or less people buying 60$ games, budgets are getting smaller, videogames are the first luxury items to go IMHO, it's not like your old games stopped working anyway).
Option 3. Increase the price and make less profits (less people buying more expensive games). ...

Option 4. Sue Activision Blizzard into oblivion so that people stop playing WoW and paying monthly fees and and start paying and playing other games again.

Why (-1, Troll)

Anonymous Coward | more than 4 years ago | (#29542733)

Why is sky blue? Who gives a shit? STFU and fork over.

Which is why (2, Insightful)

Monkeedude1212 (1560403) | more than 4 years ago | (#29542739)

I stopped going to Retailers for PC games, and started using a downloadable system (Steam).

And when I want a 360 game - I'll either Rent it, or one of us in our group of 5 friends will buy it and we'll rotate our games around, or on the odd Chance that it has great addictive multiplayer (Halo 3, Call of Duty, etc) We'll all buy it ourselves. But with episodic content (Like ODST) its cheap enough that we all can grab it, IF we really want it.

Re:Which is why (2, Interesting)

Saint Stephen (19450) | more than 4 years ago | (#29542797)

I like Steam because I feel too ridiculous buying a game in a Best Buy in my late 30s :-) Really, Steam is like a brown paper wrapper for Half-Life and Crysis :-)

Re:Which is why (1)

mcsqueak (1043736) | more than 4 years ago | (#29542847)

It could be "for the kids"! but I understand. I'm in my lake 20's a feel weird now going into a gaming store, but I only do so once or twice a year for the really hot Wii titles, like Metroid or Super Mario Galaxy.

Re:Which is why (1)

WillAffleckUW (858324) | more than 4 years ago | (#29542927)

Most of the Wii games I buy cost like $50. Not $60. Or I get used ones for $15.

Re:Which is why (1)

phantomlord (38815) | more than 4 years ago | (#29542975)

I'm in my early 30s and have Avoidant Personality Disorder with an increasing amount of agoraphobia. Oddly, gaming stores are one of the few places I never feel weird going to. Maybe it's because they generally deal with enough misfits, that I feel like I'm normal in comparison there. In fact, I buy the vast majority of my games in person.

Re:Which is why (1)

HaZardman27 (1521119) | more than 4 years ago | (#29543045)

You might not feel so weird if you weren't buying Wii games, you know. ^_^

Re:Which is why (1)

gencha (1020671) | more than 4 years ago | (#29543041)

There is this always Amazon.

Re:Which is why (4, Funny)

mcgrew (92797) | more than 4 years ago | (#29543161)

I like Steam because I feel too ridiculous buying a game in a Best Buy in my late 30s :-) Really, Steam is like a brown paper wrapper for Half-Life and Crysis :-)

Damn, dude, I'm 57 but I'll get off your lawn anyway.

Re:Which is why (2, Funny)

geekoid (135745) | more than 4 years ago | (#29543201)

Don't have gamer shame!

Re:Which is why (1)

Sparton (1358159) | more than 4 years ago | (#29542935)

Eh, you gotta be careful with Steam. Sometimes, the prices are equivalent or actually higher than what you'd find in Gamestop/etc.

For example, two of my friends have gotten Team Fortress 2 for $10 at Electronic Boutique (a Gamestop owned store in Canada), but the Steam price was $20 at the time. And that game is made by Valve!

That said, Steam still has lot's of sales and deals they do, but it's still not always the best choice for the frugal customer.

Re:Which is why (1)

Jeoh (1393645) | more than 4 years ago | (#29542989)

Steam is pretty good, besides completely disregarding currency exchange rates. Trying to circumvent those will get you banned as well.

...only in America (2, Informative)

Anonymous Coward | more than 4 years ago | (#29542755)

Try shopping for games in Europe. I can't speak for the other european countries, but at least here in Germany prices get converted from $US to â 1:1. We pay around 59â for most game titles, which is over $US80. It's the same for music, movies, and consumer electronics, by the way. Sucks to pay off your ass. :P

Re:...only in America (5, Funny)

omnichad (1198475) | more than 4 years ago | (#29542855)

That's to cover the costs of editing out textures and censoring.

Re:...only in America (1)

Sparton (1358159) | more than 4 years ago | (#29542973)

I wish I had funny mod points for you.

Sad thing is that even after the self-censoring, developers still sometimes get hit [slashdot.org] , and have to choose between stopping sales or spending more to fix the fix.

Re:...only in America (1)

omnichad (1198475) | more than 4 years ago | (#29543017)

Thanks. I forgot the article link.

Re:...only in America (1)

Bakkster (1529253) | more than 4 years ago | (#29543199)

Of course, we don't have VAT tax in the US, either.

Thread with free & open games (2, Interesting)

Haxamanish (1564673) | more than 4 years ago | (#29542757)

It is more fun to create a game than to play them, and a lot more fun than wincing about how much the commercial games cost...

Some place to start: Python games community [pygame.org]

Re:Thread with free & open games (1)

sopssa (1498795) | more than 4 years ago | (#29542843)

While I agree myself that it's fun to create games and play around with them (man did I have some great ideas and projects at teenage years!), but it's not at all for everyone. I like sandbox type games and I like messing around in games to see how the environment and AI responds to it. But my programming oriented mind probably affects a lot into that too.

However, most people just want to play a game.

Re:Thread with free & open games (1)

Haxamanish (1564673) | more than 4 years ago | (#29543169)

While I agree myself that it's fun to create games and play around with them (man did I have some great ideas and projects at teenage years!), but it's not at all for everyone.

Well, this is slashdot after all :P

I like sandbox type games and I like messing around in games to see how the environment and AI responds to it. But my programming oriented mind probably affects a lot into that too.

I understand that, until recently I was playing Eve Online. I still think it is a great game, but I stopped playing because I wanted to do something more creative. Not paying my subscription has proven to be a good way to force myself to do something else.

Re:Thread with free & open games (1)

WillAffleckUW (858324) | more than 4 years ago | (#29542873)

See, that's what a friend of mine did, he used one of the online free game systems and put up a Steampunk game (it's on FB) - and then people like me have been creating episodes and items for it.

My faves are my rocket skateboards and old style WW I bikes repurposed, but my son did this cool laser attack goggle device that kicks my ass every time.

Price: free.

Developers/artists/creators: free (I did it for fun and so did Ian).

Distro cost: free.

Re:Thread with free & open games (1)

HaZardman27 (1521119) | more than 4 years ago | (#29543063)

If you made movies, would you stop watching movies that weren't your own?

Let's be honest here. (4, Insightful)

FlyingSquidStudios (1031284) | more than 4 years ago | (#29542759)

Games are $60 because enough people are willing to buy games at that price to justify it. Like many other products, if games don't sell at $60, the price drops. If they thought people would be willing to buy games for $50 but not $60, games would be $50.

Re:Let's be honest here. (1)

jellomizer (103300) | more than 4 years ago | (#29543099)

And guess what it is not evil or excessive greed. Especially for VIDEO GAMES if you can't afford it then don't buy it, you won't be harmed from not buying such a product. Now if it is a product that people need to function in modern society and the price is too high then there is a problem. But if it isn't let it be priced as high they think the market can bare.

Cut Out the Middle Men (5, Interesting)

lobiusmoop (305328) | more than 4 years ago | (#29542761)

"That leaves $30 to $35 in the hands of the publishers."

So why can't we just download games for about half the street price?

Re:Cut Out the Middle Men (1, Insightful)

qoncept (599709) | more than 4 years ago | (#29542831)

Because no one is going to sell a game to you for $35 when people are obviously buying it for $60.

Oh, and what a waste of breath that article was. Summed up, "$60 because that's what they charge."

Re:Cut Out the Middle Men (2, Insightful)

cowscows (103644) | more than 4 years ago | (#29542861)

Because people will still pay $60 for them? But mostly because if the retail copies of your game are $60 but you're selling them on your website for $30, your retail partners are going to get pissed off because you're undercutting them so much. Digital distribution is definitely becoming a big thing, but there's still enough money to be made in retail that you don't want best buy refusing to stock your game.

As retail becomes increasingly less important, I think we'll see an increase in the amount of games that you can download for cheaper than the usual retail price. It'll never drop down to $30-35 for a brand new AAA game, but maybe closer to $45 or so.

Re:Cut Out the Middle Men (2, Informative)

omnichad (1198475) | more than 4 years ago | (#29542863)

Because the retailers say "Please don't do that or we won't sell your game." And you won't sell as many if it's only available online. So we're stuck with matched pricing.

Re:Cut Out the Middle Men (1)

Sparton (1358159) | more than 4 years ago | (#29543011)

So why can't we just download games for about half the street price?

Without those middlemen, many of the projects you'd want to buy won't be funded, and wouldn't exist.

We game developers need money too, you know. Somebody has to take the risk and pay us, and with AAA titles, you're not going to see many self-funded indies.

Re:Cut Out the Middle Men (1)

MobileTatsu-NJG (946591) | more than 4 years ago | (#29543125)

"That leaves $30 to $35 in the hands of the publishers."

So why can't we just download games for about half the street price?

Supply and Demand.

New games cost $59.99 (0)

Anonymous Coward | more than 4 years ago | (#29542765)

Because they have always cost $59.99

Re:New games cost $59.99 (1)

omnichad (1198475) | more than 4 years ago | (#29542899)

I remember Super Mario Bros. 3 was only $49.99 MSRP.

Re:New games cost $59.99 (1)

Yvan256 (722131) | more than 4 years ago | (#29542959)

What is this, the Hygrade Wieners defense?

Re:New games cost $59.99 (1)

HaZardman27 (1521119) | more than 4 years ago | (#29543101)

Were you not here for the previous generation of consoles (Xbox, PS2, Gamecube)? Game were only $50 then, which most PC games have stuck with.

Re:New games cost $59.99 (1)

bornyesterday (888994) | more than 4 years ago | (#29543103)

Thanks to the prodigious efforts by Big Brother and increased production rates, next year the price will drop to $69.99!

Huh? (2, Insightful)

Etrias (1121031) | more than 4 years ago | (#29542771)

To my mind, emerging technologies, subscriptions and episodic and downloadable content should all enable price drops--increasing accessibility to a much wider audience.

Oh yeah. Just ask EA how well that's going. How much has their episodic content come down?

Extra! Extra! Read here for the scoop! (2, Insightful)

tacokill (531275) | more than 4 years ago | (#29542779)

Why do games cost $60? Because that is what the market will pay.

Does this even need to be discussed? Are we really that retarded with our understanding of economics? Do we not understand the very simple concept of supply and demand?

...sometimes I wonder

Re:Extra! Extra! Read here for the scoop! (1)

Yvan256 (722131) | more than 4 years ago | (#29542919)

Do you understand the concept of supply? We're talking about data here. You can't apply supply and demand concepts when the supply is practically infinite.

Re:Extra! Extra! Read here for the scoop! (1)

HaZardman27 (1521119) | more than 4 years ago | (#29543141)

It's more than just data that we're talking about here. Supply also includes the money and man-hours that go into developing the games. According to your statement, with a "practically infinite" supply, publishers should be able to make profits while selling their games for $1 a piece. Obviously, that is just not true.

Re:Extra! Extra! Read here for the scoop! (5, Interesting)

WeatherServo9 (1393327) | more than 4 years ago | (#29543053)

Why do games cost $60? Because that is what the market will pay. Does this even need to be discussed?

I would think yes; yeah, we all know basic economics, but from someone not working in the industry how much do we know about how this price point was reached? Was this found by trial and error? Market research? Both/other? To what extent have there been deviations and what were the results? To what extent do Nintendo/Sony/MS play a role with "suggestions" about pricing? How does price set expectations about quality? What about the impact of historical prices on the perception of current prices? And whatever else I forgot...There's probably a lot of detail that can be explored about the topic that goes beyond just saying "that's what the market will pay". The article isn't great though it mentions a few points but could have been more detailed and researched.

Re:Extra! Extra! Read here for the scoop! (1)

geekoid (135745) | more than 4 years ago | (#29543221)

Do you not understand that supply and demand is just one part of a larger formula?

You really need to get your head past Econ 101.

We're already there ... (4, Informative)

NotBornYesterday (1093817) | more than 4 years ago | (#29542791)

"subscriptions and episodic and downloadable content" already drive the cost (to the consumer) of games to $70-$80. My kid gets an XBOX game for $60. Plays it. Finishes it. Pays $5 -$10 for points to download an add-on pack, or 2 or 3 or more, and next thing you know, he has invested $70 - $80 in the game. I already assume when he buys ODST, it will cost $80 before it's all said and done, and to me, that's the real cost of the game.

I think they have to keep the initial price at $60 for now because that's the point above which more consumers would say "screw it, I'll get something else". I'm pretty sure downloadable content will soon be (if it isn't already) about the only way game makers profit.

Re:We're already there ... (1)

HaZardman27 (1521119) | more than 4 years ago | (#29543153)

You should get ODST for him at Toys 'R Us then. You get a free $20 gift card, which you could use to pick up some marketplace points, thus absorbing the cost of additional content.

This is news? Sounds more like normal inflation (2, Informative)

SierraPete94 (1641111) | more than 4 years ago | (#29542803)

Surprisingly enough, game software really isn't that much more expensive today than it was 20 years ago. Seems like I plunked down $40 or so for Zork I way back in the day. So $20 increase in 25 years... 50%--hell, I'd challenge you to find many industries that are even close to that number.

Re:This is news? Sounds more like normal inflation (0)

Anonymous Coward | more than 4 years ago | (#29542867)

I think you missed the giant elephant in the room there.

What about computers and videogame consoles? My first PC, 8086 8MHz, 640KB RAM and 80MB hard drive cost me above 3000$CAD. My first console, Intellivision, was nearly 600$CAD if I remember correctly.

We've seen the price of the hardware go down by more than 50%, not up.

The fact that games have increased in price makes no sense since there's more gamers than ever before. It's just that companies like to waste their money on movie franchises and other such nonsense that make up a huge part of their so-called development costs.

Re:This is news? Sounds more like normal inflation (1)

HaZardman27 (1521119) | more than 4 years ago | (#29543189)

I believe the giant elephant you are seeing is in fact just a sofa. Even with game costs the way they are now, most games will not actually show any profits, because commercial games cost a LOT more to develop than they did back then.

entertainment hours per dollar (2, Insightful)

Lord Ender (156273) | more than 4 years ago | (#29542811)

Online multiplayer games are probably the best value in entertainment. Example: The Orange Box was $50, and contained four games. Just one of those games, TF2, has given me over 500 hours of entertainment in the past two years. Compare that $50/500hr expense to a $10 2hr movie, and you can see that almost any price could be "justified" for certain games. $60 is likely selected because it's about as much as many people can drop on an impulse purchase for a purely luxury item.

Re:entertainment hours per dollar (0)

Anonymous Coward | more than 4 years ago | (#29542905)

Yeah and I got a Tetris clone free from Apple's App Store, and I've probably played 500 hours of it. At home, in my office, in meetings, on planes, cabs, trolleys, trains, in a helicopter once, on a boat, sitting under a tree outside....

I think I got a better value than you did. Apple is right that the gaming market is going to move toward cell phones as a platform, and they are in perfect position to intercept a whole lot of users, once again.

Re:entertainment hours per dollar (1)

HaZardman27 (1521119) | more than 4 years ago | (#29543219)

This philosophy completely leaves "hardcore" gamers behind. We don't want to play Tetris for 500 hours; we want to capture flags, shoot aliens, and throw fireballs.

All my online games are free (1)

WillAffleckUW (858324) | more than 4 years ago | (#29542823)

And many games for the iPhone are pretty darned cheap.

At some point, game producers will start cranking out cheap English mods of Bollywood dance games and Chinese puzzle and combat games and take over the US market with games that sell for $10 a pop total.

Barriers exist to crumble.

HD assets aren't cheap (0)

Anonymous Coward | more than 4 years ago | (#29542851)

The answer is incredibly simple, actually: Since developers are mainly working on HD games that end up on the PS360, bypassing half the market (the Wii), they've got a smaller pool to fish from. Add that to the fact that the cost of HD games have skyrocketed since the last generation, and can run away in spectacular fashion if not monitored carefully (example: Grand Theft Auto IV cost $100 million, while Halo 3 cost $30 million to develop and $10 million to advertise a year before that). The obvious result of being burned at both ends financially in this scenario is that the audience will have to pay more to make up the difference. Whether such a model is sustainable remains to be seen, though.

artificial price point (5, Insightful)

jollyreaper (513215) | more than 4 years ago | (#29542859)

Why does the CD soundtrack to a $150 million movie cost $17.50 and the DVD goes for $14? It's because those are the price points they got the public to swallow. VHS movies back in the day used to go for $75 or some ridiculous number and only the video stores bought them -- who would have thought private individuals would want to own movies? But eventually the price points dropped and there you are.

Back in the day, Sierra games came with order forms for other Sierra games. Those crappy little DOS games were selling for $79.99. The stores typically had the prices lower but not by much. The entire time I was growing up, the price points for AAA titles for the top systems would be anywhere from $40 to $60. Usually $50 was the sweet spot. I recall Street Fighter having some of the most insane markups. I think SFII topped out at $80 for the SNES. Then you could also pay another $100 a piece for the special controllers.

The two things that strike me now are 1) games were really goddamn expensive back in the day and 2) I'm surprised that they haven't been able to jack that price harder considering inflation and all.

I agree with the article about how crazy it seems for simpler games selling for the same price as ones you know have to be ridiculously expensive to produce.

Serious answer (2, Informative)

fishbowl (7759) | more than 4 years ago | (#29542865)

Like any other retail product, the price is a function of what the market will bear.

There are some interesting social phenomena that affect the demand curve, that allow (or even *require*) a product to be priced arbitrarily higher than the marginal cost of production and distribution, because in some marketplaces, lower priced goods are regarded, probably unconsciously, by consumers as inferior.

It is also the case that when pricing a product with respect to a competitor's product, it is advantageous to price the product at the highest price possible while still being perceived as a better value than the target competition. I've seen reproducible studies that show the same product from the same supplier, if priced significantly lower, can be less popular.

Retail pricing is a bizarre non-linear non-deterministic function. It boils down to: If you aren't willing to pay the retail price of a product, and aren't able or willing to negotiate a lower price from a given supplier, then don't buy it.

What about inflation? (0)

Anonymous Coward | more than 4 years ago | (#29542877)

I was thinking about this yesterday: When I started gaming on Nintendo almost 20 years ago the games cost $50. I am surprised the price has _remained_ at where it is currently.

Re:What about inflation? (0)

Anonymous Coward | more than 4 years ago | (#29543187)

There are so many variables going into game profitability.

On the cost side: games take much more time to produce, salaries keep going up, and general costs involved in manufacturing and delivering the product (worker salaries, fuel, etc.) are all going up. Nowadays, you need development kits for all the consoles too, on top of licensing fees.

On the savings/profit side: computer games can come out on disc instead of eight floppies. Console games come out on discs instead of cartridges (which must really have cost a bit.) Computer games rarely have printed manuals anymore, and DLC/expansion packs have taken over. Also, many games can be released cross-platform, and the gaming base is huger than it was in the Nintendo days.

So I guess it wouldn't surprise me that much if somebody said they were still capable of making a killing at $40/50 for games on release given the new market efficiencies. On the other hand, there's so much more competition for attention amongst games now, maybe the advantage in the bigger gaming base isn't so much...

A better way to manage downloaded games? (2, Informative)

2obvious4u (871996) | more than 4 years ago | (#29542891)

I got turned off to downloading games after I downloaded Castle Crashers for the XBOX 360 and then got the red ring. Now the only person who can play the full version of the game is me. I bought the full game for my kids to play not for me to play, but they are locked out. I've tried unlocking it but nothing works.

Until the DRM is removed from downloaded games its not practical. Any of the kids can pick a game up off the shelf and play it, but if I'm not logged in my kids can't play the games I've bought for them. I don't want them to mess with my account and I don't want to pay to download the games again. I really don't want to spend hours on the phone with tech support to "reunlock" a game I already bought and paid for.

Re:A better way to manage downloaded games? (1)

hibiki_r (649814) | more than 4 years ago | (#29543133)

This was the state of affairs last year, unless you called customer service and waited about 3 weeks for someone with the power to make those changes to come back to you. Since, they've released an a license migration process that will make that work:

http://www.xbox.com/en-US/support/systemuse/xbox360/licensemigration/ [xbox.com]

You can only do it once a year, and it's a bit of a hassle, but it should help you out with Castle Crashers.

There's an easy answer (1)

g051051 (71145) | more than 4 years ago | (#29542895)

They cost $60 because that's what people are willing to pay. Supply and demand at work. However, I personally don't care what new games (and other forms of entertainment) cost. I refuse to pay more than $30, and that's only for items I really want to play. I usually won't even consider buying a game for more than $20. It's just not important to me to play a game on the first day it's out, or even the first year it's out. If the price never comes down into my range, I simply won't ever buy it.

No $70 standard pricepoint? (1)

meerling (1487879) | more than 4 years ago | (#29542897)

He obviously isn't listening to what the boss at EA has been saying about pricing...

In Game Ads. (1, Interesting)

jameskojiro (705701) | more than 4 years ago | (#29542925)

If every instance of an ad in a game would cut 25 cents from the consumer cost of the game, I would say got for it!

It would be nice to see if Sargent Johnson drinks Coke or Pepsi and if Gordon Freeman likes McDonalds or Wendy's.

The Left-Digit Effect (2, Interesting)

Triela (773061) | more than 4 years ago | (#29542983)

I think $59.99 may be a cap price for a while.

The left-digit effect: http://www.sciencedaily.com/releases/2009/02/090223221526.htm [sciencedaily.com]

Although arbitrary, I'd say it's common for consumers to think of "round" price points like $50 and $100 when it comes to entertainment (games, a night at the movies, dinner out, etc). The left-digit effect would make $59.99 the highest price to still "feel" like it belongs to $50, whereas the left-digit change of $60.00 would remind consumers they're "approaching" what they might consider an off-putting number.

Always been this way (3, Interesting)

D3 (31029) | more than 4 years ago | (#29542993)

Relative to the 1970's and 80's the prices now are a real bargain. I recall Pac-Man for the Atari 2600 being something like $50 at first.

Re:Always been this way (1)

MaineCoon (12585) | more than 4 years ago | (#29543163)

I remembering buying some SNES carts for $60 to $70 (like Killer Instinct) 15 years ago.

The article also doesnt cover the fact that Microsoft and Sony have licensing fees and development costs are higher (expensive devkits and software required in addition to regular hardware and software). These are the reasons why PC games are $10 cheaper.

As the move to downloadable games, you wont see significant drops in prices - hosting and bandwidth costs to deliver the goods still exist, and inflation continues. Additionally, market exposure is significantly less, so sales will be lower on digital-only titles. This means $50 will be the new 'cheap' (from the developers perspective) even for downloadable-only titles.

They cost the same back in the 70's and 80's (2, Insightful)

Kagato (116051) | more than 4 years ago | (#29543029)

Back in 1979 Atari was selling games at the $45+ price point. Same thing with Sega and Nintendo in the 80's, $49-59. In the 90's, $49-59. Today? $49-59.

DVDs (2, Insightful)

mcgrew (92797) | more than 4 years ago | (#29543047)

$12 to retailer, $5 to discounts/returns/retail marketing, $10 toward manufacturing costs and shipping. That leaves $30 to $35 in the hands of the publishers

So why can I buy DVDs from $5 to $20? manufacturing and shipping costs for these two items should be the same. And I've never seen a game at discount, have you? Nor have I ever seen a game as heavily marketed as a DVD.

Same reason (1)

kmac06 (608921) | more than 4 years ago | (#29543069)

It's the same reason every movie at a theater costs the same, regardless of the budget.

Huh? (1)

Bluesman (104513) | more than 4 years ago | (#29543097)

Games are $20. You just have to wait a few years. I'm just now enjoying Final Fantasy X, but still. The only way I'd pay $60 for a game is if the title starts with Starcraft.

This sounds familiar (1)

shoptroll (544006) | more than 4 years ago | (#29543115)

Haven't read TFA but this stood out at me from the summary:

"'I'm not sure that we'll see a standard $70 price point at all. To my mind, emerging technologies, subscriptions and episodic and downloadable content should all enable price drops -- increasing accessibility to a much wider audience.'"

Well if it worked for AT&T and Apple, I'm sure it'll work for the games industry. Decrease the initial investment cost, charge a regular subscription fee (DLC can serve this purpose too) and profit. No ???? needed.

Of course, it should be pointed out that PC and Wii games have stayed at $50. Just sayin'.

Article seems like BS justification to me. (5, Informative)

Marful (861873) | more than 4 years ago | (#29543151)

The article's pricing justification seems like complete BS to me. Just looking at the claimed "retail + shipping" costs tell me that the values are completely inflated.


$10 to manufacture and ship? WTF?

It costs approximately $0.75* to manufacture the DVD, print it's label, print the wrap that goes in the amaray case and package it. The packaging is approximately $0.55-$1.50* more (depending on how much junk / crap they stuff inside plus the manual).

Then once packaged the product gets bulk shipped. Claiming $7.75 for shipping per product would mean that a case of 20 unites would cost $155 to ground ship. That's a pretty absurd number. $7.75 is the cost to me if I were to ground ship each package individually to a different location.


No, this article is nothing but BS justification for game prices. The real reason why games cost exactly $59.99 has nothing to do with costs or logistics and revolves entirely around price point.

$59.99 is exactly the price point that industry wants per game, regardless of actual cost/development.


*Note: I work for a company that replicates DVD's and print the packaging and assemble. Thus I know the real costs for the packaging.

Re:Article seems like BS justification to me. (1)

Marful (861873) | more than 4 years ago | (#29543181)

$7.75 is the cost to me if I were to ground ship each package individually to a different location.

Just checked my UPS rates... It's actually less that $5 to ground ship a software box or game title from San Diego to New York City...

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